Ex Works (EXW)
An 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.
Ex Works (EXW) places the minimum obligation on the seller. The supplier simply makes the finished goods available at their factory or warehouse. Every cost and risk after that point -- loading, inland transport to the port, export customs clearance, ocean freight, insurance, import clearance, and delivery -- falls on the buyer.
While EXW might seem like it would yield the lowest product price, it is generally not recommended for international trade. The main problem is that EXW requires the buyer (a foreign party) to handle export customs clearance in the seller's country. In practice, this is extremely difficult. In China, for example, a foreign company cannot directly clear goods for export; you would need a licensed export agent, adding complexity and cost.
EXW is more commonly used for domestic transactions or within the EU where customs clearance between countries is not required. For international purchases from Asia, FOB is almost always a better choice. The supplier is better positioned to handle inland transport and export formalities in their own country, and FOB pricing typically reflects this efficiency.
Why it matters
Avoid EXW for imports from Asia. You would need to handle export customs in the supplier's country, which is impractical for most foreign buyers. Use FOB instead.
Practical Tip
Avoid EXW for imports from Asia. You would need to handle export customs in the supplier's country, which is impractical for most foreign buyers. Use FOB instead.
You'll hear this when…
When requesting quotes
“"Please provide your best EXW price for 500 units shipped to Los Angeles."”
When reviewing shipping documents
“"The bill of lading shows the goods were transferred under Ex Works (EXW) terms at the port of Shenzhen."”
When negotiating payment
“"We'd like to confirm whether your quoted price is on Ex Works (EXW) basis before finalizing the purchase order."”
Related Terms
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.
Free Carrier
FCAAn Incoterm where the seller delivers goods, cleared for export, to a carrier nominated by the buyer at a named place. Risk transfers at the point of handoff to the carrier.
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.
Port of Loading
POLThe port where goods are loaded onto the ocean vessel at the origin country. The choice of POL affects freight costs, transit times, and under FOB terms, is where risk typically transfers from seller to buyer.
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