Blog · · 2 min read
EXW, FOB or CIF? Incoterms explained for salon and spa furniture buyers
When you buy furniture from abroad, the delivery term in your quotation decides who arranges and pays for each step of the journey, and the moment the risk of loss passes to you. Incoterms 2020, published by the International Chamber of Commerce (ICC), are the standard way to state this. Here are the three terms we most often quote.
What does EXW (Ex Works) mean?
Under EXW the seller delivers by making the goods available at its own premises, such as the factory or workshop. The goods are not loaded onto any vehicle. The buyer loads them onto its own collecting vehicle at its own cost and risk. The ICC also notes that export clearance falls to the buyer, which is the main difference from FCA, where the seller completes export clearance.
EXW gives you the most control, and the most work. It suits buyers who already have a freight forwarder in the seller's country.
What does FOB (Free on Board) mean?
Under FOB the seller delivers the goods on board the vessel at the named port of shipment, and the risk passes to the buyer once they are on board. The seller completes export formalities. FOB can only be used for sea and inland waterway transport. The ICC points out that FOB dates from before containers existed and that FCA is generally better suited to containerised cargo, because the goods can be handed over at a terminal or the seller's premises.
What does CIF (Cost, Insurance and Freight) mean?
Under CIF the seller contracts and pays for the sea freight to the agreed port of destination and must insure the goods. Two points surprise first-time buyers. First, the risk still passes to the buyer once the goods are on the vessel at the port of shipment, even though the seller pays the freight. Second, the seller only has to provide minimum insurance cover (Institute Cargo Clauses C), so buyers of fragile goods may want to ask for wider cover. The seller handles export clearance and the buyer handles import clearance. CIF is for sea and inland waterway transport only.
Which term should you choose for furniture?
- If you are importing for the first time and want a simple price to your port, ask for CIF, and ask about the insurance cover.
- If you work with a freight forwarder and want to compare freight prices yourself, FOB or EXW gives you that control.
- For container shipments, ask whether FCA would suit you better than FOB, as the ICC recommends.
- Whatever you choose, make sure the quotation names the place or port and the Incoterms 2020 version.
We quote EXW, FOB or CIF for salon and spa furniture and can discuss delivery to your site. Read more in our export information, or send your layout for a quotation.
Sources
Free layout
Need a delivery price for your country?
PDF, DWG or a phone photo of a sketch — all fine. Replies within 24 hours.