EXW Incoterms: What Ex Works Means
for E-Commerce Sellers (2026)
Your supplier quoted "EXW Factory" and the price looks amazing. It should. That price covers the product and nothing else. Every single logistics cost is yours.
Quick Answer:
EXW (Ex Works) is an Incoterms 2020 rule where the seller makes goods available at their premises. The buyer handles everything from that point: loading, inland transport to port, export customs clearance, ocean freight, cargo insurance, import customs, duties, and last-mile delivery. EXW produces the lowest product quote but the highest logistics burden. For e-commerce sellers importing from China, FOB or DDP almost always results in a lower total landed cost because the seller or carrier handles Chinese-side logistics more efficiently than a foreign buyer can.
What Is EXW (Ex Works)?
EXW is one of 11 Incoterms published by the International Chamber of Commerce (ICC). It places the maximum obligation on the buyer and the minimum obligation on the seller.
Under EXW, the seller's only job is to make the goods available at their premises. That premises is usually a factory, warehouse, or office. The seller does not load the goods onto a truck. The seller does not arrange transport. The seller does not handle export customs. The seller does nothing beyond setting the goods aside for you to collect.
Everything after that is the buyer's responsibility:
- Loading goods onto a vehicle at the seller's location
- Inland transport from factory to the port
- Export customs clearance in the origin country
- International freight (air or ocean freight)
- Cargo insurance
- Import customs clearance in the destination country
- Import duties, taxes, and fees
- Last-mile delivery to your warehouse
EXW is the exact opposite of DDP (Delivered Duty Paid), where the carrier handles everything from origin to destination. For a full explanation of DDP, see our DDP shipping guide.
Key Takeaway: EXW means you do everything. The seller just makes the goods available at their door. If that sounds like a lot, it is.
Why EXW Looks Cheap But Usually Is Not
When you compare supplier quotes, EXW always has the lowest number. That is by design. The EXW price strips out every logistics cost that other terms include.
Here is a real comparison for a 500 kg shipment of phone accessories from a factory in Dongguan, China to a warehouse in Los Angeles:
| Cost Component | EXW (you pay) | FOB (supplier includes) | DDP (carrier includes) |
|---|---|---|---|
| Product cost (500 kg) | $2,500 | $2,500 | $2,500 |
| Loading at factory | $30 | Included | Included |
| Trucking to Shenzhen port | $120 | Included | Included |
| Export customs | $80 | Included | Included |
| Ocean freight | $650 | $650 (you pay) | Included |
| Cargo insurance | $15 | $15 (you pay) | Included |
| US port charges | $350 | $350 (you pay) | Included |
| Customs broker | $200 | $200 (you pay) | Included |
| Import duties (8%) | $200 | $200 (you pay) | Included |
| Customs bond | $75 | $75 (you pay) | Included |
| ISF filing | $50 | $50 (you pay) | Included |
| Trucking to LA warehouse | $400 | $400 (you pay) | Included |
| Total landed cost | $4,670 | $4,440 | $4,200 |
The EXW product price was $230 less than FOB and $1,700 less than DDP. But the total landed cost was $230 higher than FOB and $470 higher than DDP.
Why? Because your Chinese supplier negotiates local trucking, port fees, and export clearance at rates you cannot match as a foreign buyer. And a DDP carrier handles the entire chain with volume-based discounts across every step.
Key Takeaway: EXW is the cheapest quote but rarely the cheapest option. Always compare total landed cost, not product price.
Want to see what DDP actually costs for your shipment? Post it on AiDeliv and carriers compete with all-inclusive quotes.
Get DDP Rates →EXW vs FOB vs DDP: Which Incoterm Should You Use?
| Factor | EXW | FOB | DDP |
|---|---|---|---|
| Seller/supplier handles | Nothing beyond making goods available | Product + inland transport + export clearance + loading | Nothing (carrier handles all logistics) |
| You arrange | Everything | Freight + insurance + customs + duties + delivery | Nothing |
| You need a Chinese logistics agent | Yes (for pickup and export) | No | No |
| You need a US customs broker | Yes | Yes | No |
| Risk starts | At the factory door | When goods are on the vessel | At delivery to your warehouse |
| Number of vendors | 5-7 | 3-5 | 1 |
| Cost transparency | Very low | Medium | High |
| Total landed cost | Usually highest | Middle | Often lowest (through competition) |
| Best for | Buyers with local agents in China | Experienced importers | Most e-commerce sellers |
When EXW Might Make Sense
There are limited situations where EXW works:
- You have your own logistics agent or office in China that can handle pickup and export
- You are buying from a very small factory that genuinely cannot arrange transport or export clearance
- You are consolidating goods from multiple factories into one shipment and need to control the entire process
- You are a freight forwarder yourself and have Chinese-side operations
When EXW Is a Bad Idea
For most e-commerce sellers, EXW creates problems:
- You have no one in China to pick up the goods and manage export customs
- You pay premium rates for Chinese inland trucking because you have no local relationships
- Export clearance mistakes can delay your shipment by days or weeks
- You carry risk from the moment goods leave the factory, including during Chinese domestic transit
- The combined cost of managing everything separately almost always exceeds FOB or DDP
The practical advice: If your supplier only offers EXW, ask them to quote FOB instead. Most factories can arrange transport to port and export clearance. If they truly cannot, find a different supplier or use a DDP carrier who handles pickup from the factory as part of the service.
EXW Responsibilities Breakdown
Seller's Obligations Under EXW
| Obligation | What It Means |
|---|---|
| A1: General | Provide goods and commercial invoice per contract |
| A2: Delivery | Make goods available at the named place (factory/warehouse) |
| A3: Risk transfer | Risk passes to buyer at the point of delivery (seller's premises) |
| A4: Transport | No obligation to arrange any transport |
| A5: Insurance | No obligation to provide insurance |
| A6: Delivery document | Provide proof that goods were made available |
| A7: Export clearance | No obligation (buyer handles export clearance) |
| A8: Checking and packaging | Package goods for transport if notified of destination before contract |
| A9: Cost allocation | Pay only costs until goods are made available |
| A10: Notices | Notify buyer that goods are ready for collection |
Buyer's Obligations Under EXW
| Obligation | What It Means |
|---|---|
| B1: General | Pay the price agreed in the contract |
| B2: Taking delivery | Collect goods from the seller's premises |
| B3: Risk transfer | Bear all risk from the moment goods are available at seller's premises |
| B4: Transport | Arrange and pay for ALL transport (inland, international, last-mile) |
| B5: Insurance | Arrange all cargo insurance (no obligation, but strongly recommended) |
| B6: Proof of delivery | Accept delivery document from seller |
| B7: Export and import clearance | Handle BOTH export (in China) AND import (in destination country) clearance |
| B8: Inspection | Pay for any pre-shipment inspection |
| B9: Cost allocation | Pay ALL costs from the point of collection |
| B10: Notices | Give seller notice of collection date and any specific requirements |
Note the critical difference from FOB: under EXW, the BUYER handles export clearance in China. This is a major headache for foreign buyers without a Chinese agent.
Common Mistakes with EXW
Mistake 1: Accepting EXW because the price looks lowest.
Compare total landed cost, not product price. EXW at $5.00/unit with $2.50 in logistics costs is more expensive than DDP at $7.00/unit.
Mistake 2: Not having a Chinese agent for export clearance.
Under EXW, you handle export customs in China. As a foreign entity without a Chinese business license, you cannot file export declarations directly. You need a Chinese customs agent, which costs $50-150 per shipment and adds coordination complexity.
Mistake 3: Ignoring the loading clause.
Under strict EXW rules, the seller is not even required to load goods onto your truck. In practice, most factories will load, but technically it is your responsibility. Clarify this in writing before you ship.
Mistake 4: Carrying risk during Chinese domestic transit.
Under EXW, if the truck from the factory to the port gets into an accident, you bear the loss. Under FOB, that risk stays with the seller until the goods are on the vessel.
Mistake 5: Paying retail rates for Chinese trucking.
Your Chinese supplier ships goods to port every week and has negotiated rates. You are a one-time buyer paying spot rates that are 30-50% higher. This alone can wipe out any savings from the lower EXW product price.
DDP carriers on AiDeliv handle pickup from your supplier's factory, export, freight, customs, and delivery. One price. No Chinese agents needed.
Run a DDP Auction →Frequently Asked Questions
What does EXW mean in shipping?
EXW stands for Ex Works. The seller makes goods available at their premises (factory or warehouse). The buyer handles everything from that point: loading, inland transport, export clearance, freight, insurance, import customs, duties, and delivery. It places maximum responsibility on the buyer.
Is EXW the cheapest Incoterm?
EXW produces the lowest product price, but it rarely produces the lowest total landed cost. The buyer must arrange every logistics step separately, often at higher rates than the seller or a carrier can negotiate. For most e-commerce importers, FOB or DDP results in a lower total cost.
What is the difference between EXW and FOB?
Under EXW, the buyer handles everything from the factory door, including Chinese inland transport and export customs. Under FOB, the seller handles inland transport, export clearance, and loading onto the vessel. FOB removes the two biggest headaches of EXW: managing Chinese logistics and export paperwork. For a comparison of all major terms, see our DDP vs DAP vs FOB guide.
Why do some suppliers only offer EXW?
Some smaller factories lack export licenses or logistics capabilities. Others use EXW strategically because the low headline price attracts buyers. In either case, ask if they can quote FOB instead. Most suppliers with any export experience can arrange transport to port and clear customs.
Can I use DDP instead of EXW?
Yes. Under DDP, a carrier handles everything from factory pickup in China to delivery at your warehouse or fulfillment center, including customs and duties. On AiDeliv, you can post your shipment and carriers compete with DDP quotes through a reverse auction. See our DDP shipping guide for details.
Related Incoterms and Resources
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