EXW (Ex Works) is one of the international trade terms defined by Incoterms. This article explains what EXW means, the responsibilities of buyers and sellers, its advantages and disadvantages, and provides practical examples for importing goods from China.
EXW vs. FOB Comparison
| Item | EXW (Ex Works) | FOB (Free On Board) |
|---|---|---|
| Delivery Point | Factory / Warehouse | Port of Departure (China) |
| Inland Transportation in China | Buyer | Seller |
| Buyer | Seller |
Advantages of EXW
- Factory prices are generally lower.
- You can choose your own shipping or freight forwarding company.
- Better control over transportation costs.
- Greater flexibility in managing logistics.
- Ideal for experienced importers.
Disadvantages of EXW
- The buyer is responsible for the entire shipping process.
- A professional freight forwarder or shipping company is usually required.
- There is a higher risk if you are unfamiliar with import procedures and documentation.
- The buyer assumes responsibility and risk from the moment the goods are collected at the factory.
Important Considerations
- Don't focus only on the EXW factory price.
- Calculate the total import cost before making a purchasing decision.
- Choose reliable and trustworthy suppliers.
- Inspect product quality carefully before placing an order.
- Prepare all required documents and information in advance.
