DDP vs. FOB: What Your Supplier Quote Is Really Telling You

The cheapest quote in your inbox is rarely the cheapest product on your shelf. The difference comes down to the shipping term, or Incoterm, written next to the price. If you don't know which one you're looking at, you can't compare quotes fairly.

FOB: the price stops at the port

FOB (Free On Board) means the supplier covers production and getting the goods onto a ship at the origin port. Everything after that is yours: ocean or air freight, insurance, customs brokerage, import duties, port fees, and the final trucking leg to your warehouse.

FOB quotes look attractive because they leave out a large share of the real cost. For many consumer products, freight and duties add 15 to 40 percent on top of the FOB price, and that range swings with tariffs and freight rates.

DDP: the price includes everything

DDP (Delivered Duty Paid) means the seller delivers the goods to your door with freight, customs clearance, and duties already paid. The per-unit price is your landed cost. There is no customs broker to hire and no surprise invoice when the container arrives.

How to compare quotes

• Convert every quote to a landed cost per unit before comparing.
• Ask what freight method the quote assumes and how long transit takes.
• Check which duty rate applies to your product's HTS code; it can change the math entirely.
• Account for your own time. Coordinating forwarders and brokers is real work.

Every Merchin quote is DDP and shows both air and ocean options side by side, so the number you approve is the number you pay.