Delivered Duty Paid (DDP)
An Incoterm where the seller bears all costs and risks of delivering goods to the buyer's named destination, including import duties and taxes.
Delivered Duty Paid (DDP) places the maximum obligation on the seller. Under DDP terms, the supplier is responsible for everything: manufacturing, export clearance, ocean freight, insurance, import customs clearance, payment of duties and taxes, and delivery to your specified address. You receive the goods at your door with no additional logistics to manage.
DDP sounds ideal but comes with significant trade-offs. First, suppliers bake substantial markups into all of the logistics and customs costs they handle. Second, you lose visibility into the customs process, which can be problematic if issues arise. Third, many overseas suppliers lack the expertise to navigate US customs regulations efficiently, increasing the risk of delays or compliance problems.
DDP is most commonly used for small sample shipments, trade show deliveries, or when working with trading companies (as opposed to factories) that have established logistics networks. It is rarely the most cost-effective option for production orders. Some e-commerce fulfillment models use DDP for direct-to-consumer cross-border shipments where the seller wants to guarantee the buyer will not face unexpected duties at delivery.
Why it matters
Use DDP only for samples or very small shipments. For production orders, FOB with your own freight forwarder and customs broker will nearly always be cheaper and give you more control.
Practical Tip
Use DDP only for samples or very small shipments. For production orders, FOB with your own freight forwarder and customs broker will nearly always be cheaper and give you more control.
You'll hear this when…
When requesting quotes
“"Please provide your best DDP price for 500 units shipped to Los Angeles."”
When reviewing shipping documents
“"The bill of lading shows the goods were transferred under Delivered Duty Paid (DDP) terms at the port of Shenzhen."”
When negotiating payment
“"We'd like to confirm whether your quoted price is on Delivered Duty Paid (DDP) basis before finalizing the purchase order."”
Related Terms
Delivered at Place
DAPAn Incoterm where the seller delivers goods to a named destination, ready for unloading. The buyer is responsible for import clearance, duties, and unloading.
Free on Board
FOBAn Incoterm where the seller delivers goods on board the vessel at the named port of shipment. Risk transfers from seller to buyer once goods pass the ship's rail.
Ex Works
EXWAn Incoterm where the seller makes goods available at their premises. The buyer bears all costs and risks from the factory door onward, including export clearance.
Incoterms
A set of 11 internationally recognized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities, costs, and risks between buyers and sellers in international transactions.
Customs Broker
A licensed professional authorized to clear goods through customs on behalf of importers. In the US, customs brokers must hold a federal license and are responsible for correctly classifying goods, calculating duties, and ensuring regulatory compliance.
Landed Cost
The total cost of a product delivered to your warehouse, including the product price, shipping, insurance, customs duties, customs broker fees, and drayage. The true cost you must use for pricing and margin calculations.
This term appears in every Bottlecap report.
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