May 13, 2016 by Andrew Minalto - 246 Comments

CNF, CIF, FOB & EXW Explained!

It’s time for our weekly Reader’s Question post! And this time I’m actually doing an update on an older post as it seems that many people are still confused about the various terms used when importing products from China!

CNF, CIF, FOB, Ex-Works – what does it all mean? And most importantly – which of these shipping methods is most cost effective?

Let’s find out!

Hi Andrew!

My congratulations, your blog is very, very helpful (the most helpful information I have found in one blog so thank you for that!).

But I still have a couple of questions which I hope you’ll be able to help me with.

For about two months I’ve been dealing and negotiating with a Chinese fabric supplier. I’m going to order 500m from various designs and the final price we’ve agreed is $3.37/m CNF London. The price is good so I would like to proceed and organise shipping.

But I’m completely lost on where to start…

What exactly does CNF London mean?

Could you explain to me how it works, step by step, from beginning to end? First I pay for my goods, and then what happens after that?

The supplier suggested that we use a smaller price on the invoice than what I’m actually paying to lower the cost of import tax and duty. Do you think this is a good idea? To me it sounds like fraud but I wanted to get the advice of someone with as much knowledge as yourself.

I would need to pay $1685 for my 500m of fabrics. What about the rest of the costs? How much are taxes and duties in the UK? And when do I need to pay them?

Does CNF London mean I have to collect my goods from a port in London? I live in London so this won’t be a huge difficulty, I’m just confused about how it works.

I am sorry for asking so many questions but when I think about all of these things it turns into a bit of a nightmare! I hope you can help clarify some of it for me.

Kind regards and many thanks!
Malwina

Okay, let’s start with the basics. When dealing with suppliers from China, you’ll often be offered 4 types of pricing:

FOB – Free on Board (or Freight on Board). This basically means that the cost of delivering the goods to the nearest port is included but YOU, as the buyer, are responsible for the shipping from there and all other fees associated with getting the goods to your country/address.

EXW (Ex-Works) – also sometimes referred to as the Ex-Factory price. This basically means the cost of the product and nothing else! No shipping costs or export fees in China are included in this price, never mind local port and custom fees or delivery to your door.

CIF – Cost, Insurance and Freight. In this case, the price also includes sea freight charges and insurance to deliver the goods to YOUR nearest port. But only to the port – from that point onwards, you take the shipment into your hands.

CNF – Cost & Freight (or Cost, no Insurance, Freight). Similar to CIF only this time insurance is not included.

If your supplier quoted you a CNF London price, this means that the price includes shipping of the goods via sea freight to London port. When the goods arrive, you’ll have to organise customs clearance and delivery to your home/office/warehouse.

While the CNF price can look very attractive, keep in mind that there will be other costs involved when your goods arrive in London, such as:

  • Customs clearance fee
  • Value Added Tax
  • Import Duty
  • Port security charge
  • Fuel surcharge
  • Docking charge
  • Warehouse storage fee
  • Etc.

So the CNF price is really just the tip of the iceberg and does not show you the true, FINAL price you’ll pay for the products you’re importing.

Also, as you’re new to importing, it will take extra time and be a lot of hassle for you to organise everything at London’s port.

If your supplier quoted you an Ex-Works price, this means that there will be LOTS of hidden charges in China + the actual freight charge + all the additional charges I already covered under CNF. This really is NOT the way to do business! You’ll never know for sure how much your import will cost in total, so please NEVER deal with Ex-Works prices!!!

A much better alternative to CNF, FOB, CIF and Ex-Works is to use a freight forwarding agent for your shipments from China. These companies will take care of EVERYTHING mentioned above and will deliver the goods to your door without you having to mess around with the customs clearance procedure.

You usually receive an invoice from them once your goods have arrived with all taxes, customs & port fees clearly listed.

I highly recommend you use such a company, at least for your first few importing deals. These freight forwarding companies are very affordable and can actually work out cheaper than if you try to do it all on your own.

My recommendation for UK customers is Woodland Global – a freight forwarder with great customer service, weekly shipments from China and very competitive prices. Get in touch with them to find out exactly how much your order will cost delivered to your door, after all the fees and taxes.

When contacting a freight forwarding company, make sure you ask for a Door to Door price. This is very important as otherwise you can end up with a host of additional charges when your goods arrive in the UK.

As for declaring a lesser value on the invoice to avoid/minimise taxes – BAD, BAD idea! It’s nothing but fraud, never mind the fact that you won’t even be able to get such a shipment through customs as you’ll have to provide a payment receipt to prove the value of your goods.

And furthermore, you wouldn’t be able to properly book such shipments from an accounting point of view as your payments to suppliers wouldn’t match the tax invoices you pay in the UK.

So just keep it safe and play by the rules!

To sum it up – when you deal with suppliers in China, ALWAYS ask for a FOB price! This means product’s cost + local charges in China to the nearest port.

Then you ask your supplier for order dimensions (weight & size) and contact a freight forwarder for a door to door quote. Lastly – don’t forget about insurance! It usually costs just £20-£30 and will protect your shipment against loss and damage.

Thanks,
Andrew

246 Comments
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  1. Hi Andrew,

    Good day! I am a newbie into this and I would like to find out if you by any chance know any or could you recommend a forwarding company who delivers door-to-door to Philippines. The goods will be purchased from Alibaba.com (from China) which I need to get delivered to my doorstep in Philippines.

    Thank you!
    Vince

    1. Andrew Minalto

      Hi Vince,

      Contact this company:

      https://www.woodlandgroup.com

      Thanks,
      Andrew

  2. Hi Andrew,

    Thank you very much for the post!

    I’m from Spain and I want to import some python leather bags from China throughout Alibaba and I have no idea about shipment methods. The supplier gave me the price of goods and then the price for shippment with DHL. I would like a door to door service but I dont know what kind of trade term it is… FOB, CIF?
    I dont want to get my package stopped in the port even thought I should pay the import duty and VAT, but where or to who do I have to pay for it?

    As you can see Im completely lost! I will appreciate your help,

    Thank you,

    Lara

    1. Andrew Minalto

      Hi Lara,

      Thanks for your comment.

      IF supplier gave you shipping price/quote for DHL, that means the goods will be shipped via DHL courier, door to door and you don’t have to worry about customs clearance process as DHL will doit for you.

      Andrew

  3. Ravi kashyap

    Thank you for the valuable information Andrew.

    Many thanks

    Ravi

    1. Andrew Minalto

      You’re welcome Ravi!

  4. Mohammed Abdul Aziz

    Hi Andrew,

    Many thanks for great explanation for Shipment terms…

    Best of luck.
    Aziz.

    1. Andrew Minalto

      You’re welcome Aziz! 🙂

  5. Hello Andrew,,,
    I am just a beginner in import business, i wanted to import mobile ph accessories like mobile cover,data cables etc from china to India,, i am negotiating with chines supplier through alibaba portal they are giving me f.o.b. price by air courier like DHL,FedEx,is this including the coustom duty,VAT,insurance, import duty etc, and this will include door to door service ,,or i have to pay all this when it reach to New Delhi, kindly explain it,and if i am importing any item so i need import
    & export license?
    Regards
    Rahman

    1. Andrew Minalto

      Hi Rahman,

      Shipping costs will almost NEVER include VAT, import duty and other local taxes you may need to pay at destination.

      So no – it is just to cover shipping costs.

      Thanks,
      Andrew

      1. Thanks Andrew,,,, but should i need import export license for that?

        1. Andrew Minalto

          No, you don’t.

  6. Don’t FOB and CIF sound same? What’s the difference?

    1. Andrew Minalto

      No, it’s not.

      FOB just means products are being delivered to nearest port in China while CIF will include Shipping to your port + insurance.

      Thanks,
      Andrew

  7. Hi Andrew,
    For door to door service, is actually from wh shipper to wh receiver? or it could be from port to door if im using FoB?
    thanks a tons!

    1. Andrew Minalto

      It can be from Prot to Door if you’re using FOB, yes.

      That’s actually what we usually do.

      Andrew

  8. Thank you for the very informative explanation! In June, I had a shipment sent by air from China to Texas to the Amazon warehouse. I asked for door to door service and paid the air freight charges. My contract says FOB. I just received, three months later, a charge for Duty for $311 that my supplier said FEDEX charged them and we now owe them.

    I thought if it was door to door, that all charges were included in the cost of the shipping that we sent with the payment on the order.

    Your answer from March 21, 2017 at 6:23 am about this seems to confirm this:
    “If goods are sent via courier, you don’t have to worry about FOB, CIF etc. etc. It simply does not apply to courier shipments.”

    Could you elaborate on this? By courier, did you mean freight forwarder, or is a courier FEDEX?

    Thank you,
    Terri Smith

    1. Andrew Minalto

      Hi Terri,

      Import duties, taxes, VAT are almost NEVER included in ANY shipping forms/quotes.

      So if supplier used their own Fedex account, fully serviced account (this means that all taxes are also accounted for them), then yes – you could owe you them that money now.

      Usually though you would have to pay these taxes, at your end, when you receive goods. So ask supplier for some kind of proof that they have indeed been billed for your taxes.

      Andrew

  9. Hi Andrew

    I thought I had outgrown my current source, but now with all these extra cost’s in mind, I may decide to stick with what I know best.

    I love love love your articles, they have helped so much. Thank you x

    1. Andrew Minalto

      You’re welcome Marie! 🙂

  10. It’s really helpful to unknown person like me.

    Thanks.

    1. Andrew Minalto

      You’re welcome Hasan! 🙂

  11. Thanks Andrew this is so much worth and also sharing the knowledge is the one of the most greatest thing that some can do , and you did it !!!

    1. Andrew Minalto

      You’re welcome! 🙂

  12. thank you Andrew!

    1. Andrew Minalto

      You’re welcome Kristine! 🙂

  13. Kristine KRDCO

    Hi Andrew,

    Thanks for this straight to the point post! It is really helpful specially for newbies like me.

    I will be importing from Alibaba , china with FOB price . The supplier already sent me quote for door to door delivery, but i want to know if it is better to hire freight forwarder.

    Can you suggest good and affordable freight forwarder for Australia door to door delivery?

    Thank you so much!

    1. Andrew Minalto

      Hi Kristine,

      Yes, you should use your own, trust and reliable FF, like this one:

      https://www.woodlandgroup.com

      Thanks,
      Andrew

  14. Hi Andrew,

    Iam new to this kind of business and Iam really frustrated!
    Iam not an USA citizen but I want to start importing goods from China and sell them in amazon FBA USA.
    Will I pay taxes too ? Or any other fees rather than the shipping and Amazon fees?

    Thank you

    1. Andrew Minalto

      Hi Dina,

      Yes, you’ll need to pay import duty upon importing goods and then Sales tax in the USA.

      This is a complex topic – I recommend you search on Google about this and learn all the aspects of doing business in the USA using FBA.

      Andrew

  15. Martin O'Hagan

    Hi Andrew,
    I am talking to Chinese supplier about purchasing a couple of engineering machines. He quoted me CIF. So that means cost of the product+insurance+ freight all inclusive – right?
    If I want to use a freight forwarder as you are suggesting. That means I need to ask the supplier for EXW – right?
    Thanks in advance
    Martin

    1. Andrew Minalto

      Hi Martin,

      That’s right, yes. But don’t forget that CIF price won’t include any local/port feee, customs clearance, local delivery etc. which can be a huge sum. So I always recommend using a freight forwarder – get a door to door quote. It can be EXW price for a try door to door but more often I go with FOB – this means that supplier sends goods to the nearest port, where freight forwarder takes over.

      FOB means that charges to port will be included while EXW – not.

      Andrew

  16. Hey Andrew,

    I a new FBA seller and have found my product and I am banging my head against my desk trying to figure out this shipping process. I am looking to ship 500 units to my house using dhl or ups Express delivery. I was given a quote of “EXW hangzhou +.50 / unit for fedex shipping”. If I am using Fedex to ship my products, why would EXW be needed? They are light units under 1lb. I am just trying to get from point A which is China to point B the east coast in the United States. Since this is my first time, I would like to know the easiest way possible and it seems to me I cannot find that answer,

    Thank you for your time.

    1. Andrew Minalto

      Hi Madison,

      EXW price means – just product price, without any local Chinese exporting/customs fees, no shipping to you.

      You want to ask supplier to get a courier shipping quote for you so that you know exactly how much it will cost.

      BUT to be honest – a 500 lb shipment will be very expensive via courier methods… if it makes financial sense to you, you can do it of course but usually with order that heavy/big you would want to use a sea freight service.

      Thanks,
      Andrew

  17. Hey Andrew –

    Am trying to ship my stage piano keybaord from China to the US and am totally banging my head against the wall trying to figure out how to get it done.

    One key question is this – I’m currently in Shanghai but will be moving back to Los Angeles – both are port cities. if I was able to do FOB to the port of Los Angeles, would I be able to go personally pick it up from the port? I assume I would still need to pay some sort of customs fees, but since I live near the port, if I was able to drive over and pick it up directly I feel that FOB would be sufficient (as opposed to FF).

    Thanks for your help!

    1. Andrew Minalto

      Hi Jeff,

      Yes, you should be able to pick up the shipment on your own from the warehouse in LA but yes, you’ll still need someone to do customs clearance for you + you’ll have to pay various port fees too.

      Andrew

      1. Do you have any recommendations for customs clearance services? Do you have any idea what to expect the customs cost for these goods (approx $2000 value) to be?

        1. Andrew Minalto

          No, sorry, don’t have anyone to recommend for this.

  18. Hi Andrew..I am currently importing 300 items from China and my supplier from Alibaba is going to send the shipment via FedEx Express shipping to my home in Dallas,Texas,USA. In Alibaba trade assurance system, he has created the contract with trade term CIF. Is this okay? He is a gold supplier,assessed supplier and has 6 year history so I have a belief that I won’t be scammed. This is my first ever order from Alibaba. Please advise if CIF Incoterm applied to Air express shipping as well ?

    1. Andrew Minalto

      Hi Sanj,

      Not sure to be honest – usually CIF, FOB etc. are used for sea freight shipments.

      For couriers, “air” or “air express” is usually used.

      You should ask your supplier about this.

      Thanks,
      Andrew

  19. Very helpful…
    simple and clear…
    Regards,

    1. Andrew Minalto

      You’re welcome Essam! 🙂

  20. Ken Fletcher

    Andrew
    Thanks for the information supplied.

    1. Andrew Minalto

      You’re welcome Ken!

  21. thanks

  22. Hi Andrew,

    Further to my last comment, your blog does clarify that fob has the product shipped to the nearest port to the buyer and then the buyer is responsible for any charges associated with getting the products delivered to the door. But what about CIF comma what are the charges associated once the products are delivered to the nearest port to the buyer?

    Thank you,
    Kris

  23. Hi Andrew,

    Thank you for your blog Andrew, it is very informative. It is sincerely appreciated the time you take to share the knowledge you have.

    I am in Canada and am looking at importing medical instruments and the supplier or the manufacturer has quoted me prices based on CIF. Looking at the different options, insurance Freight seems very good, or am I just not seeing it right?

    If CIF means the manufacturer would be sending the products to the nearest port to me, for instance Toronto. Am I just two arrange moving the product from the port to my door? In this case do I need a freight forwarding company? Or do I just go to my nearest port and pick up the order?

    Your help and guidance in this is sincerely appreciated.

    Thank you,
    Kris

    1. Andrew Minalto

      Hi Kris,

      I’m afraid it’s not that simple.

      Technically yes, that’s how it works BUT the problem is all the fees you’ll be facing at the port – you’ll have to pay various handling, storage, un-loading, customs clearance and other fees. They can run into hundreds for even small shipments. And you never really know how much exactly you’ll have to pay in those fees.

      So, for that reason, I recommend that you work with a freight forwarder who can offer you door to door delivery, with a set, all inclusive price so you know exactly how much it will cost you to get those goods delivered to your address, including all port fees. Find a freight forwarder and work with them.

      Andrew

      1. Maria Keenan

        Is it best/cheaper to do FOB and get the freight forwarder to send it to my door or is it better to get CIF and then get the freight forwarder to deliver to my door?

        1. Andrew Minalto

          Hi Maria,

          FOB is better, yes, if you work with a good freight forwarder company, like Woodland Global.

          Some companies will always try to over-charge you on all kinds of fees, so always get a final door to door price quote that includes everything BEFORE you start the order process.

          Thanks,
          Andrew

  24. hy Andrew,

    again.
    I would like to ask your support in shipping methods to Australia.
    Which the best (cheapest) way? …and about cost; from Europe.

    thank you

    John

    1. Andrew Minalto

      Hi John,

      It depends on the order size and weight.

  25. hy Andrew,

    the information is useful, which you shared.

    thank you

    John

    1. Andrew Minalto

      You’re welcome John! 🙂

  26. Neither I or the chines companies I contacted were able to find a forwarding agent to Ghana that did door to door. The best that they could find was CIF. DO you know any forwarding companies that may do this ?

    1. Andrew Minalto

      No, sorry.

  27. Hi Andrew,
    The suppliers I have been talking to always suggest using well known couriers when exporting from China to the USA, I know this is more expensive but as they are only small quantities, is it more secure using FedEx/UPS etc so that I don’t have to worry about FOB or EXW for the mean time? Thanks, Aaron

    1. Andrew Minalto

      Hi Aaron,

      Thanks for your comment.

      Yes, for small quantities/orders, there are no real alternatives to using a courier. Sea freight and Air freight are only cost effective with bigger orders so just stick with couriers for now and keep it simple.

      Thanks,
      Andrew

  28. Hi Andrew,

    I am in contact with supplier from china and want to buy some kids clothing into UK. it won’t be much, around 200-300 items and cost is around 1200$ EXW terms.
    If I ask them to ship it through courier, what other charges should I expect on top of items price?
    customs?
    shipping?
    would you be able to tell roughly cost of it or who should I ask.
    its the first time I’m trying to buy from china and my head is melting by now 🙁
    Thank you for you help

    1. Andrew Minalto

      Hi Darius,

      If you’re planning to do an importing deal, you should learn a bit more about how it works.

      I have plenty of articles/posts about this process on my blog, so just start reading 🙂

      here’s the list of all posts:

      https://andrewminalto.com/start-ebay-business/

      Thanks,
      Andrew

  29. Hi Andrew

    I am importing a small first time order from China to the value of £750.00. The supplier is sending the goods via FEDEX door to door (this is included in the shipping charges). But there are no trade terms stated on the invoice i. e FOB CIF or CNF, other than our address in the UK. There was originally CNF on the invoice but this was removed and our UK address was added to the additional notes sction and not under trade terms, s this a problem, or should there a trade/Incoterm on there?

    Also we were going to pay for the goods via Alibaba secure payment (Escrow) either by TT or by credit card. What would you advise?

    Many thanks
    Jan

    1. Andrew Minalto

      If goods are sent via courier, you don’t have to worry about FOB, CIF etc. etc. It simply does not apply to courier shipments.

      Trade Assurance – pay with a credit card.

      Thanks,
      Andrew

      1. Thankyou for that.

        1. Andrew Minalto

          You’re welcome Janis!

  30. Hi Andrew
    Im Mehul from India and am planning to import a machine from china. We are in the last phase of our deal and the supplier says that they would send the machine on FOB and after that we would have to handle the remaining process to get the machine delivered at my factory.
    Would you please let me know what should i do to complete the rest of the process to get the machine on indian port and then to my factory.
    As im first time importer from china, i would like to know the things to keep in mind while completing the deal?
    Thank You.

    1. Andrew Minalto

      Hi Mehul,

      Find a local freight forwarding company in India who can assist you with shipping, customs clearance procedure, port fees etc. etc.

      I wouldn’t recommend doing it all on your own if it’s your first importing deal. You may end up over-paying a lot in various fees.

      So yes, find a freight forwarded company and work with them on this shipment.

      Thanks,
      Andrew

  31. Andrew

    I do a lot of shipping from china to the US. However, I found UPS,DHL and fedex to be very expensive. A representative from both ups and DHL recommended using a shipper/forwarder from China. Unfortunately, I’ve been underwhelmed by their attention to details, processing time and cost. Can you recommend a good/great option whom may also be more affordable and reasonably priced in door to door shipping from china via sea or air?

    Thanks

    1. Andrew Minalto

      Hi Derrick,

      Thanks for your comment.

      Have you used Woodland Global before? They’re great to work with, very affordable (at least in the UK), so you may want to give them a try:

      http://www.woodland-group.com/division/woodland-global

      Thanks,
      Andrew

  32. Hi I have just made my first order on alibaba through secure payment. My order total was $136 and included free shipping via DHL express. Now what I am wanting to find out is if I should expect any further charges to pay once the goods are in the UK? if so based on my order total what would be the total expected cost. At present I have made payment via alipay secure payment and waiting for verification of my payment. As you can tell I am a complete newbie to this and through the best way to gain some confidence from ordering from China is to take the first plunge!

    1. Andrew Minalto

      Hi Abdul,

      Please check this post for more info on import taxes:

      https://andrewminalto.com/import-duty-vat-threshold/

      Thanks,
      Andrew

  33. Hi! Andrew, my name is Rocco Milo, I am in Whitby, Ontario, Canada., and I am already in contact with a company in China, as is my first time do it importing and I assuming the procedure will be the same to UK by a freight forwarding company.

    Can you please let me know your opinion if will work the same or something different.

    My regards,

    1. Andrew Minalto

      Hi Rocco,

      Yes, basically it will be same thing if using a freight forwarder company.

      Thanks,
      Andrew

  34. Dear Andrew,

    Would like to say THANKS
    Very impressive and easier way to learn from your goodself .

    Noor.

    1. Andrew Minalto

      You’re welcome! 🙂

  35. Do you have any recommendations for FF going from China to the US?
    Thanks,
    Jason

    1. Andrew Minalto

      Hi Jason,

      Woodland Global operates Worldwide, including the US:

      http://www.woodland-group.com/contact-us/north-america/america

      Thanks,
      Andrew

  36. Very Informative.
    Thankyou!

    1. Andrew Minalto

      You’re welcome Rameez!

  37. This was the quickest and most helpful way to explain these matters! Really appreciate it.
    Thank you so much. Be blessed.

    1. Andrew Minalto

      You’re welcome!

  38. Hi Andrew,

    Thank you for being informative.
    Would a freight forwarder help consolidate items to ship through courier?
    For example if there’s 200 items total and each at least weighs 1lb or less.

    1. Andrew Minalto

      Hi Jess,

      You mean 200 items from different suppliers?

      They can probably do this but it will be expensive.

      And a 200lb shipment via courier will be very expensive by default. So you should rather consider sea freight or at least air freight options.

      Thanks,
      Andrew

  39. Great advice. .

  40. Russell Choudhury

    Hi great article very useful.

    I just am confused between difference between FOB and door to door.

    In door to door does the Freight forwarder pick the shipment up from the factory?

    In FOB does the supplier ship to the port then the FF takes over at the port. Or does the supplier put it onto the ship?

    Also why do you recommend getting fob price and then using door to door?

    1. Andrew Minalto

      Hi Russel,

      Thanks for your comment.

      The classic Door to Door would be when freight forwarder picks up shipment from the factory and then delivers to your door. You would ask for EXW price from supplier in this case.

      The problem is that FF charges will be quite high for picking up goods from supplier hence I recommend that you get FOB price from supplier – this means that shippment goes to port where FF takes over. So you need to know from which ports FF operates and then give that info to supplier to get FOB price for that port.

      This way supplier covers charges for goods to be delivered to port and they will be cheaper than FF’s charges.

      Hope this clears it up!

      Thanks,
      Andrew

  41. Julian Dixon

    Thanks for your article… are there any freight forwarders/agents you might recommend to get goods to Sweden from China? Thx Jules

    1. Andrew Minalto

      Hi Jules,

      I can recommend same Woodland Global:

      http://www.woodland-group.com/contact-us/europe/sweden

      Thanks,
      Andrew

  42. Stanley Lim

    Dear Andrew,

    I find your article very helpful. I am planning to order from various suppliers over Alibaba.com and have a couple of questions I would like to seek your advice.

    1) Would it be more costly if I were to get all my suppliers to individually arrange door to door shipping of the goods to my address?

    2) If I decide to use a Forwarding agent for door to door shipping, would it be wiser to ask my product suppliers for ex-warehouse quotes instead of FOB? Since all the shipping cost would be handled by the forwarding agent?

    Thanks

    1. Andrew Minalto

      Hi Stanley,

      1) Yes, it would be MUCH more expensive.

      2) You would still want FOB prices arranged to same port for all suppliers. Port where your freight forwarder can consolidate this shipment.

      Andrew

  43. Hi Andrew

    I am looking at starting a new business and importing Baby clothes from China to Zurich (Switzerland).
    I have been quoted a price of $5800 FOB, my question is which company should I use to ship the items to Zurich (Switzerland) and what other costs would be involved in getting the Baby clothes to Zurich (Switzerland).

    If you know any companies I should get quotes form, their names would be appreciated.

    Thanks

    1. Andrew Minalto

      Hi Angela,

      Contact WG, they can take care of all this for you:

      http://www.woodland-group.com/contact-us/europe/switzerland

      Thanks,
      Andrew

  44. Hi Andrew

    I am looking at starting a new business and importing sweets from Dubai to Nottingham UK.
    I have been quoted a price of $4600 FOB, my question is which company should I use to ship the items to UK and what other costs would be involved in getting the pallet to Nottingham.

    If you know any companies I should get quotes form, their names would be appreciated.

    1. Andrew Minalto

      Hi Yogesh,

      Yes, get in touch with this company to organise shipping, customs clearance etc.:

      http://www.woodland-group.com

      Thanks,
      Andrew

  45. Andrew, thank you very much for your expertise and help.
    Q: If I am shipping a container with auto parts from, lets say, from Los Angeles to X port in the Middle East and the shipping company quote me a price CIF that means that my buyer will have to take care of the container from then on including customs clearance ?
    Once again thank you VERY much.

    1. Andrew Minalto

      Yes, that’s correct Rey.

  46. Hi there mate, I want to order bicycles from china, and they offer FOB it means I will need to pay VAT and import, anti dumping duty, customs clearance and etc? what is cleared by FOB

    1. Andrew Minalto

      Yes, correct.

      FOB price only covers cost of goods and delivering them to the port.

      1. so basicly its the same as CNF?

        1. Andrew Minalto

          No.

          CNF includes shipping charges.

          FOB does not include shipping charges.

          1. Sergej

            It means CNF is better then FOB?

          2. Andrew Minalto

            Not better, not worse – they’re 2 different things.

  47. Awesome advice. Thanks AM

    1. Andrew Minalto

      You’re welcome Sean!

  48. Hello Andrew,

    You seem to offer extremely helpful advice so I wonder if you could offer me some advice with an import problem that I believe relates to this thread.

    I have imported a plastic bathroom product for a number of years. I pay the company in China for the goods and shipping by bank transfer and they then send the goods to my door via airfreight using a well known courier. The courier then send me a vat and duty invoice which I pay.

    The duty has always been (roughly) 6.5% of the costs of the goods and the VAT 20% of the cost of the goods. So for example if the goods were £1000GBP then I would expect duty of £65 and vat of £200.

    On a recent order though the delivery arrived, the cost of the goods was £3500GBP so I was expecting to pay roughly £228 duty and £700 Vat £928 total. When the invoice arrived though it was for £606.85 duty and £2254.15 Vat a total of £2861.00

    I queried the invoice with the courier and initially the told me they had made an error with the paperwork and refunded me £331.76 duty but told me I needed to reclaim the VAT myself. They have since emailed me and told me that all my previous invoices were only charged VAT and Duty on the goods as the seller had not declared the cost of delivery. It said the Commercial invoice from China confirms the value of the goods however the Customs declaration document does not show the AWB/ Frt Charges. This information was not provided on the official document therefore this has not been taken into consideration when calculating the duty vat element due. As a consequence you have been underpaying duty and vat on previous orders???

    I have since had further orders and im only be charged VAT and Duty on the cost of the goods still. So im confused, was that one invoice correct and all the others wrong or has someone at the courier or sender changed something for that one delivery which has made the invoice so high. I hope you can point me in the right direction as I have not paid the courier the extra money as I believed it was wrong but they are now threatening me with court action. One extra thing I noticed was the very high invoice has FOB Shanghai on the commercial invoice but this does not appear on any previous commercial invoices. The same box has ‘Terms S’ in it.

    I look forward to your reply.

    Kind Regards

    Paul

    1. Andrew Minalto

      Hi Paul,

      I don’t know really what to suggest as it is a very specific case…

      You do have to pay VAT on shipping though so if you haven’t done it previously, it could be that you under-paid all the time. I don’t know though legally how they can now charge you for all previous orders.

      I can’t really help much with this, you’ll have to sort this out with courier company and Customs.

      Andrew

  49. Hi Andrew your website is really useful, thank you!
    I have a client that want to buy some non-latex sponges to Argentina, as per your article the best would be to find me a freight forwarding agent, I would like to ask you if should I consider any other permit/license or anything in order to export this good since it touches the skin? (I’m in China for many years but I’m new in this field)
    I would really appreciate your opinion, thank you very much in advance!

    Kind regards,
    Laura

    1. Andrew Minalto

      Hi Laura,

      I’m sorry but I don’t have specific knowledge on these products and exporting them to Argentina.

      You’ll have to do your own research on this, especially if this is your business.

      Thanks,
      Andrew

  50. Austin Addo

    Hello Andrew,

    Is the fob dependent on the importing country? When I am in Israel and I am importing an item from China, will the fob differ from another importer importing from Sierra Leone?

    My opinion is that fob depends on the exporter but please enlighten me further.

    Thanks

    1. Andrew Minalto

      Hi Austin,

      No, FOB does not change because of destination country as shipping costs are not included in FOB price.

      Andrew

  51. Hi. Hopefully you can help me too.
    I had ordered a shipment from China to Southampton CIF.
    Appointed freight forwarder as quote was good. I understand I need to pay tax and vat, customs clearance and my agents delivery charges. Now I found out I will need to pay an additional £127 for arriving fees. When I questioned that I was advised that shipment is going into London Gateway instead. According to another company I shouldn’t be charged that much. My question is what additional charges are there with CIF? I feel that my freight forwarding company whants to make money on me 🙁

    1. Andrew Minalto

      Hi Agnes,

      Those fees vary greatly depending on port shipment size and shipping company.

      I can’t give you any exact numbers I’m afraid.

      Andrew

  52. Hey Andrew

    I am getting ready to import fencing materials to US , Who would be a good freight forwarder to use to import here?

    Thank You in Advance.

    1. Andrew Minalto

      Hi Tony,

      Same Woodland Global I recommend also works in the US:

      http://www.woodland-group.com/division/woodland-global

      Thanks,
      Andrew

  53. wish I had read this before. I have imported from china by air freight – no problems. However 1 order has gone cif and arrives next week in Folkestone. Just received an unexpected £700 list of fees. Plus goods will start to incur warehouse fees. Can I just abandon the goods with no further liability as its not worth the cost to get them ? or am I now liable and stuck paying far more than the goods are worth ?.

    1. Andrew Minalto

      Hi Darren,

      Yes, this is very typical…

      But I don’t know what happens if you simply abandon goods and don’t proceed with payments etc. Theoretically, if you haven’t signed any contracts with freight forwarder, you shouldn’t be in trouble but I’m not sure as I have never done it.

      You may try asking freight forwarder about this – be honest, tell them that you did not expect such extra costs and that it’s not cost effective for you to proceed with it. See what they say.

      Andrew

  54. This is honestly one of the most useful things I have found from a quick Google search. Thank you! Would love to hear more about working with the freight forwarder. I.e. What info must I provide them and what should I expect back?

    1. Andrew Minalto

      Thanks Susie!

      I will have a shipping post tomorrow that goes into more detail on this.

      Thanks,
      Andrew

      1. “I will have a shipping post tomorrow that goes into more detail on this.”

        Hi Andrew could you provide a link please?

  55. Hello Andrew,

    Thanks a lot for this information. You’ve saved me from loosing my money. Let me look for a freight forwarding company right away.

    1. Andrew Minalto

      You’re welcome! 🙂

  56. John Edwards

    Fantastic post MORE and more in-depth detail on how to really succeed on eBay!

    Nice one Andrew.

    1. Andrew Minalto

      Thanks John!

  57. Hi Andrew, great thread and info on here, I wonder if you could offer some advise, we’re a company that has arranged a freighter to ship 2.56cbmtrs of product to Australia, value of goods £3000. The customer was quoted – we can quote to Sydney port only . There was no reference to CFR or CIF just as quoted.

    The customer is being charge around £1000 for handling docs and goods by two different companies, one handling disembarkation and the other I believe handling customs and paperwork, It does seem very expensive.

    Is it common to have two companies handling the unloading and customs charges.

    Any thoughts or advise on this would be very welcome, our window to sort this out is narrow, by thursday latest.

    1. Andrew Minalto

      Hi Paul,

      Yes, it’s common that two companies are involved in this process.

      £1000 does sound like a total rip-off, I agree. This is exactly why I always recommend getting a door to door quote as these companies I think are taking advantage of small clients/individuals and simply over-charging them.

      I don’t know even what you can do about this right now as you don’t have time to look for better deal probably as port storage fees will eat up your savings anyway. Best advice I can give is to next time use a good freight forwarder and deal with complete door to door service.

      Andrew

  58. Hi Andrew!

    This is a great blog. Wish I knew it before.

    Can you tell me how does a CIF invoice/informa write or any sample? The one my supplier is giving is not accepted by my bank.

    Thanks in advance.

    1. Andrew Minalto

      Hi Mahmud,

      Your bank probably can give you advice on what needs to be changed.

      Usually pro-forma invoice has all the buyer details, seller details, payment information, shipping information etc.

      Andrew

  59. Hi–

    Can someone elaborate please that if terms are CIF Regina, should Destination Delivery Charges at Vancouver Port be covered by shipper? Or will importer be responsible for this?

    Thanks
    Solomon

    1. Andrew Minalto

      Sorry, which charges you’re referring to?

  60. ahamed ibrahim

    Hi Andrew,

    I am happy to see you are answering for many new business people. i really appreciate your answers and god bless you.
    i am also a beginner in importing. i am living in Australia . i have got few reliable cashew kernels suppliers/manufacturers from India who could be my supplier for importing cashew kernels into Australia . i really wanted to do import cashew kernels to Australia but i haven’t got an idea of how to start and getting an order from the buyers in Australia. when i made the calculation to see my profit after all expenses , my selling price for a kilo of cashew is a dollar more than competitive importers in Australia.
    how could i approach the buyers with this competitive price ?
    do i need any kind of “lab test certificates” for Australia before importing (like sgs, bicon,bio sanitary etc )?
    kindly please answer my doubts and very well appreciated
    Thank you.
    Regards,
    ahamed ibrahim

    1. Andrew Minalto

      Hi Ahmed,

      Yes, as far as I know you will need various certificates to import such food items into Australia.

      As for the price – well, your competitors probably import in much larger quantities and get lower price this way. Price will also of course depend on supplier/product quality, shipping costs etc.

      Andrew

  61. Hi man,i really appreciate the work you do,your advices are so very helpful and god bless you,regard’s

    1. Andrew Minalto

      Thanks!

  62. Hi

    I want to purchase 200 bajot tables from India and have a supplier. However he says he will send them to Southampton Docks. I don’t know anything about import tax or what I need to do, or if I need to do anything regarding these goods coming into the country. Please advise

    1. Andrew Minalto

      Please contact a freight forwarder who can help you with customs clearance and shipping goods straight to your door:

      http://www.woodland-group.com

      Thanks,
      Andrew

  63. amanda Daniels

    Hi Andrew, Unbelievable that i still have a question after all of that information.But here goes. I am importing equipment from China and have been quoted a CIF amount to the LA port. I realize i will be responsible for freight forwarding to my location, but my question is. Who pays Duty and Taxes and customs fees at the port of LA? Is that on my or my shipper in a CIF price quote. Thanks so much in advance,
    Amanda

    1. Andrew Minalto

      Hi Amanda,

      CIF price means – cost, insurance and freight. YOU are still liable for any taxes and custom fees so you’ll pay these.

      Andrew

  64. Hello Andrew,

    Thanx for sharing your valuable information to all the wonderful people here.

    Your blog, if ever to be described in one word, “Fantastic”.

    Keep up the good work. Hope to get more information from you in future.

    Thanx

    1. Andrew Minalto

      You’re welcome Ruman! 🙂

  65. Hi Andrew!

    I just want to say a big THANK YOU! for sharing all this information. I find your blog most helpful for putting ideas in practice. All the best!

    1. Andrew Minalto

      You’re welcome Otilia! 🙂

  66. Hi Andrew,
    i am planning to import Hospital scrubs from Pakistan to Canada.i don`t have experience and this is first time.Please let me know which term is best for me if i will use sea or air, i am going to start my own business.Please guide me i really appreciate you to guide me,

    Best regards,
    Imran

    1. Andrew Minalto

      it’s best to go with FOB terms Imran so you don’t have to pay any additional fees in Pakistan.

      And then simply work out delivery/customs clearance fees with the freight forwarder you’ll be using.

      Thanks,
      Andrew

  67. Hoo boy, just when I thought opening my little side business to sell handmade things at craft fairs was going to be easy and fun…

    I’m in the middle of negotiating with a supplier in China for 25 picture frames, which will cost me $200 (USD). I hadn’t even considered import taxes and customs and….I’m literally sitting here gobsmacked.

    So, if the supplier has agreed/offered FOB, I have a couple of questions that I hope you can answer.
    1. Do you have any recommendations for a freight forwarding agent in the United States?
    2. I live surprisingly close to one of the biggest US sea ports, but it’s on the east coast. However, if the goods were (somehow) to arrive there, would I be able to go pick them up and deal with customs at the port?

    I know these are such noob questions, but the artwork I plan on making and selling requires a specialized frame which I can’t find on eBay, Amazon, etc. for less than $20 apiece. I wanted to keep my overhead low so I can keep my prices low enough to be of interest to the kind of people who go to craft fairs/shows and farmers markets. I _could_ sell them without the frames, but they wouldn’t be as nice.

    Sigh. I’m beginning to wonder if I’ve bitten off more than I can chew…

    1. Andrew Minalto

      Hi Jazz,

      Importing just 25 picture frames from China won’t make any sense. You’ll pay LOTS of extra money for shipping, taxes etc. – it’s simply not worth it. You would have to buy at least 100-200 frames o even consider it.

      So my advice would be to look for a USA based wholesaler (on Google, WholesaleCentral.com) to buy these frames locally, in small bulk.

      At least in the beginning.

      If you can get them @ $20 a piece, that will still be cheaper than importing 25 pieces from China.

      But with some more research you should be able to find a wholesaler who can do these cheaper for you.

      Thanks,
      Andrew

  68. thank you exllant information
    so much helpful

    1. Andrew Minalto

      You’re welcome Jay! 🙂

  69. What does EXW mean?

    “if you choose exw term, you can easily know which forwarder’s solution is good.”

    Thank you

    1. Andrew Minalto

      Hi Richard,

      EXW (Ex Works) price means that it’s basic product price AT the factory. You would have to pay/organise shipping from there to port, insurance, freight etc. etc.

      Thanks,
      Andrew

  70. Hi Andrew,

    Thanks much for dedicating your time answering our questions, very much appreciated. I have a quick question for you: If a supplier from China tells me “The EXW unit price is $4.35/pc. And shipping fee to the USA is 60USD. So total price = $4.35*30 + $60 = $190.5.” What would this mean to you? Are they pretty much stating that the goods will come to my door? Their site shows a chart with the express shipping method via DHL, FedEx, or Postal Service and their corresponding shipping time. I found the following formula on another site which makes it a little more confusing to me I’m not certain how accurate they are though:

    EXW is a basic price
    EXW + handling = FOB
    FOB + freight cost = C&F to any place that you may wish.

    Thanks!

    Lucie

    1. Andrew Minalto

      Hi Lucie,

      What shipping method you’ll be using for that order? Courier? Sea freight?

      Let me know.

      Andrew

      1. I would definitely prefer courier (DHL or FedEx).

        Lucie

        1. Andrew Minalto

          If it’s courier, they will take care of customs clearance procedure for you and you just need to pay their invoice which will include import duty, VAT & admin fee.

          Andrew

          1. Ok, thanks much Andrew!

            Lucie

          2. Andrew Minalto

            No worries! 🙂

  71. Hi Andrew,
    I am totally new to this industry, I have a simple question
    I am planning to order iPhone cases from China and requesting the seller To ship directly to Amazon UK warehouse. What is the best Trade terms I should select, as I do want to incur any type of additional cost

    Regards
    Krishna

    1. Andrew Minalto

      Hi Krishna,

      It’s not that simple – you can’t simply send such shipments to FBA.

      Please read importing guide on FBA website.

      Thanks,
      Andrew

      1. Hi Andrew,
        Thanks for the quick response, sorry I missed word [not] in my previous query
        I don’t want to incur any type of additional cost

        Regards
        Krishna

  72. Hi Andrew

    I am about to start importing copper from china to the uk and I am curious about shipping terms.

    Something isn’t adding up when reading your blog though I will explain,

    FOB – Free on Board (or Freight on Board). This basically means that the cost of delivering the goods to the nearest port is included but YOU, as the buyer, are responsible for the shipping from there and all other fees associated with getting the goods to your country/address.

    Then,

    Hi Riaz,
    FOB just means goods loaded onto ship and carriage paid to your nearest port, that’s it. Nothing else.
    Customs clearance fees, VAT, import duty and delivery to your address is NOT included in FOB price.
    Thanks,
    Andrew

    To me these look like 2 different answers ? Does FOB include shipping to my country ?

    In the first answer it says it doesn’t, but in the 2nd answer it says it does ?

    Your help is appreciated

    Regards

    Derek

    1. Andrew Minalto

      Hi Derek,

      Yes, my bad there – I got mixed it up myself for a very simple reason that very often, if goods are small, Chinese suppliers actually include sea freight cost in FOB price.

      But by standard definition – FOB does not include sea freight cost.

      Also, usually suppliers state PORT of unloading – so for example – FOB Shanghai. This means that FOB price includes delivery to Shanghai port only. Ports located in different locations may incur additional charges.

      Thanks,
      Andrew

  73. Rico Coballes

    Hi Andrew,
    First I would like to thank you so much for all the informative answers to all the questions posted, its a big help to everyone like me who aspires to start an import business.
    Got a few questions hope you find yourself available to answer.
    I want to import rice from Thailand to UK and not sure where to start, I’ve gone through HMRC website on how to start imports and so on but would like to ask you a favor to guide me through. First what license should I apply before doing this import, secondly how can I guarantee that the exact order I’ve asked is what supposed to be in a container and not less.
    Thank you so much.

    Regards,
    Rico

    1. Andrew Minalto

      Hi Rico,

      Thanks for your email.

      I’m sorry but I have no experience whatsoever with importing food items from outside EU so I don’t know what kind of certificates/permissions you’ll need to import rice from Thailand.

      You should probably check trading standards website for more info on this.

      Thanks,
      Andrew

  74. Hi Andrew,

    You’re unaware but your advice has saved me SO much time over the past few months!

    I’m currently negotiating a deal however i’m unsure as to which payment method to go with.

    T/T, D/P, D/A and all the rest! wheres good old paypal when you need it 😉

    Eagerly awaiting your reply,

    All the best,
    Joe

    1. Andrew Minalto

      Hi Joe,

      Great to hear that! 🙂

      PayPal is usually my number one choice.

      If that’s not possible, do the order via Alibaba – so you get trade assurance protection.

      Last resort is direct bank transfer but of course then you don’t get any protection whatsoever so be very careful with this and only use bank payment if you’re 110% confident in the supplier you’re dealing with.

      Thanks,
      Andrew

  75. Hi Andrew,

    Greetings for the day

    Came across your blog and found it to be very informative. Thank you for this initiative.

    I have a query regarding CNF and hope you could help me understand it. My supplier from china in a mail replied- ” CNF 4.8 USD PER SET BY LCL , not BY AIR”. I couldnt understand what does it mean.

    Request if you can make me understand it.

    Thanks in advance.

    Regards,
    Umang

    1. Andrew Minalto

      Hi Umang,

      It means you pay CNF – $4.8 USD per set (of whatever you order there) via LCL – which stands for less than container load via sea freight.

      So $4.8 per set, cost of product and freight via sea freight, in a mixed container.

      Thanks,
      Andrew

      1. Hello Andrew,

        Greetings for the day

        So what I am understanding is USD4.8 include the freight also along with the product.

        Thanks a lot,
        Umang

        1. Andrew Minalto

          yes, correct.

  76. Hi Andrew, Thanks for all the explanations! Really informative!

    But, I also have a few small questions. It’s about smaller freight compared to the others (based on the blog comments).

    I am ordering just a few hundred pieces of a certain product from a supplier in china. These pieces don’t weigh that much and they are small in size too. The total weight will be around 25KG. They will send two boxes of the size: 50w x 80h x 60h (This is one box and sizes are in centimeters).

    My question is, do you recommend a “freight forwarding company” for this amount of KG and packages?

    Or do you recommend a courier service? In that case I would opt for the incoterm CIF at the supplier and then let a courier service pick up the goods from the port and transort it to my doorstep.

    Last question. Does it matter (in my case) if the supplier sends it by air or by sea, price wise? (Assuming ithe incoterm is CIF).

    1. Andrew Minalto

      Hi David,

      For a 25kg package you want to use nothing but a courier service! Air freight and sea freight won’t be cost effective for such small shipments as you’ll actually pay more in various fees than for the shipment itself.

      So just go with the courier, FOB price and ask supplier to find cheapest courier for you. Then they just charge courier shipping price in your invoice, together with product cost.

      Thanks,
      Andrew

  77. Hi Andrew,

    Do you have any tips for great freight forwarders from China to USA?

    Thanks,
    Monika

    1. Andrew Minalto

      Hi Monika,

      Same WG that I recommend in Uk works in USA too:

      http://www.woodland-group.com

      Thanks,
      Andrew

  78. hi Andrew,please help me for my basic questions, FOB price means the cost of delivering to the nearest port,the nearest post means whom? the supplier or the buyer port and then the freight and insurance charges are bared by the importer,is it so. CIF means cost freight and insurance will be not charged to the importer is that statement okay and delivered to which port ? and please let me know what are the cost included in FOB,

    1. Andrew Minalto

      Yes, FOB means product plus delivery to nearest port (supplier’s port).

      and yes, CIF means that sea freight and insurance is included, to buyers country port.

  79. Hi Andrew

    I appreciate your blog here!

    I am trying to purchase a kitchen equipment from China and I’ve been quoted a price of $1600 CIF (Kolkata).

    I do understand what that means for me, but what exactly are the costs that I am going to end up incurring ?

    1. Andrew Minalto

      Is this for personal use? Or bulk purchase?

  80. Hi Andrew

    I am also new to importing from China, and I was wondering if you could help me

    I am importing 10 scooters, and the dimensions are per piece (individually packaged):

    Carton size: 58*45*27CM,1PCS/CTN, G.W:15.5KG

    The supplier has quoted me the CIF price of 295 USD, but from the comments I have read online, there may be a lot of hidden costs involved. I was also quoted the FOB price of 525 USD for the same shipment, so I was wondering if it would be better?

    The goods would be shipped to the port of London, so it isn’t far for me to go get them myself when they arrive, but I was wondering if there was a difference between CIF and FOB that would prevent me from doing so?

    Also, if I were to use a freight forwarding company, would they have problems with collection based on me using CIF over FOB?

    1. Andrew Minalto

      Hi Hsin,

      Yes, I would recommend you go with the FOB price when possible as otherwise you will be hit with various extra charges. freight forwarders can do either way of course but at added cost.

      Thanks,
      Andrew

      1. Thanks Andrew

        This is what my supplier emailed me:

        You don’t need to pay any additional cost. The CIF price include local charge and shipping fee to London port.

        So I guess she is lying?

        1. Andrew Minalto

          sorry, I thought it was ex-works price because it was cheaper than FOB.

          CIF does include include everything up to London port, yes BUT why it’s cheaper than FOB?

          It does not make sense…

          1. Yes, that was what I was initially concerned by

            My supplier quoted me the higher FOB price first with one shipping company, but as I asked a lot of questions about additional costs and freight forwarding services, she then said she found another company that can do the shipping at the cheaper CIF price

            Is this unheard of?

            I can easily find details online for the FOB company SHENZHEN JOINT A SUPPLY CHAIN CO.,LTD, but so far, nothing for the CIF company
            Shenzhen HYD Logistics Ltd. – the supplier has given me their contact details, so I am waiting for their response to see if there is something dodgy going on (seems to be a lot of shipping companies in Shenzhen)

          2. Andrew Minalto

            The price difference seems way too high to me…

            I would start questioning how legit that supplier is, it could be that they are up to something and just lowered the price to get your order in. Not saying it’s the case 100% but it does look suspicious to me.

          3. Thanks for your advice

            They are an ali baba supplier, so I have been as cautious as I can, doing as much research as I can. They appear to have been manufacturing for 5 years and are gold suppliers, they have their own company website, and the details on the PI they want me to pay is for their company HSBC bank account based in Hong Kong

            I have been toing and froing with this supplier for the past month, mainly because they were shut for 2 weeks due to the Chinese New Year, and I have conveyed interest in putting a larger order in if this one goes well

            I have emailed the supplier again for more details of this CIF courier, so fingers crossed

            Thanks again

  81. Thanks Andrew; very helpful article. I plan to visit your site again researching similar topics and gain familiarity with others you decipher.
    Best,
    Ira

    1. Andrew Minalto

      You’re welcome Ira! 🙂

  82. Hi Andrew,
    I’m still a little fuzzy on some of the shipping options from China to the USA.
    I’m about to start pitching local big box retailer managers with my product and I would like to have my numbers as accurate as possible before I configure my pricing for them.
    I have negotiated with two or three suppliers in China for my best possible price but I’m still leery about any surprise fees at the port.
    Is it possible for you to tell me:
    Is it accurate to say that suppliers in China get better rates for shipping then I would get on my own?
    When discussing FOB vs. CNF (or CIF), which one will be more beneficial monetarily for myself here in the USA?
    What fees will I have to pay at the port for an FOB shipment vs. the fees I will have to pay for the other 2?
    When discussing CNF vs CIF, is it really worth paying extra for the insurance?
    Is this insurance for damage to the goods, or for the goods just completely disappearing?
    Can I actually transport goods on a maritime freight ship without insurance?

    I have seen you mention on here, and I have heard others mention elsewhere, that the first few times I should get a freight forwarding company to handle my shipment. My confusion on this is the following:
    The consensus is that I should let them handle it first few times, but whether they handle it 3 times or 25 times, wouldn’t I have to handle it on my own at some point? Why not just tackle that hassle the very first time in order to save money?
    Does the freight forwarding company only handle the shipment upon its arrival at my destination port in my local city?
    I would certainly prefer someone to do the work for me but I am working on an extreme shoestring budget with no wiggle room to spare.

    Another question I have is about air freight, for what types of products which you recommend air freight and how much more expensive have you found that it is over maritime freight?
    Thanks for all your help!

    1. Andrew Minalto

      Hi Joe,

      There are too many questions to answer them in this comment reply.

      But I can definitely recommend you using a freight forwarder (who can also help you with all these questions) and no – actually you can save some money by using a freight forwarder VS doing it yourself as you’ll get better shipping rates, faster customs clearance (which also costs money for extra days goods are at port) and delivery of goods to your door.

      Thanks,
      Andrew

  83. Hi, Nice Blog! I was wondering if anyone planning to export from India, does he need to pay the VAT in India? For Example If i m exporting Rice from India to UK, What taxes i m bound to pay? please help me understand this, i appreciate.
    Regards,
    Jigar

    1. Andrew Minalto

      Hi Jigar,

      I’m not familiar with tax system in India so you’ll have to find out whatever you have to pay any export taxes in India when exporting to UK.

      Thanks,
      Andrew

  84. Hi,
    is there difference between ‘CIF’ and ‘FOB Destination’?

    1. Andrew Minalto

      CIF stands for Cost, Insurance and Freight.

      FOB Destination is usually used as term to describe destination port for that FOB shippment.

      1. Does it means that FOB Destination is the same at CFR?

        I am also very confused with the term FOB Destination since according to the Incoterms FOB is the port of origin, not a destination…

        Really like your blog!

        1. Andrew Minalto

          with FOB terms it’s port of origin, yes as FOB does not cover the actual shipping cost.

          But sometimes suppliers use FOB as all inclusive pricing too, especially with small orders where sea freight costs just say $50 to them. In that case they could mention Destination port too.

          You really need to chat with your supplier and clear the air on what they mean by FOB exactly.

          Andrew

  85. Hey Andrew,
    im trying to buy something from china through Alibaba and want it shipped to New York and not have to deal with anything other than receiving it at my door. What would be the best way to do that?

    1. Andrew Minalto

      Hi Will,

      How big the shipment will be?

      if it’s a small package, you can simply use any courier service and they’ll take care of everything and deliver goods right to your door.

      If it’s a larger, sea freight or air freight shipment, you’ll want to use a freight forwarder for Door to Door service, such Woodland Global.

      They can collect goods from supplier in China, ship over to USA, do customs clearance and deliver goods to any address you want.

      Thanks,
      Andrew

  86. martin richardson

    hi andrew, having read most of the post here, is was wondering if you could advise on this, i ordered and paid for a timber grab and rotator to fit a small 3 ton excavator, i paid fob, $540… which very roughly is £380. i am now looking at charges of £393 to pay just to collect it from port..lcl terminal handling£70… uk documentation £90….uk handling £25…. uk warehousing£19.73… customs clearance£55…. deferment fee£30 ….import duty and v.a.t£104.68… this has all come from CMI, CARGO MOVERS INTERNATIONAL LTD in essex…. having found the commodity code for item it turns out there will be no duty to pay, could you clarify maybe , as i am not a buisiness and do not intend to sell the item, just use it myself to help with lifting MY firewood to keep our three woodburners fed at our home , is v.a.t applicable? the thing is you cann read to much information or listen to avise and help by different people and it becomes to bloody confusing!! HELP …. we have establihed there is no duty to be paid, is there v.a.t? and am i right in noting all these charges seem extorionate?! is there a goverment ombudsman who can determine if all these charges are fair!!! PLEASE HELP… many . regards martin. p.s my half pallet is due at port 24/1/15 after three different due dates!! at felixstowe. cheers

    1. Andrew Minalto

      Hi Martin,

      These fees seem about right. That’s why sea freight is usually used for bigger orders, not just one item as port & related fees are almost fixed.

      You’ll still have to pay VAT though ,even if import duty is 0%.

      Thanks,
      Andrew

  87. Hi Andrew,

    Fabulous blog! Thank you. Question – when importing from China, is it safer to go with CIF or CNF? Wouldn’t it be better to have insurance?Thanks

    1. Andrew Minalto

      Yes, of course – it’s always better to have insurance.

  88. Thank you for your prompt reply. I am actually exporting to Mumbi. I was quoted $8078 /MT-FOB. Therefore does that mean $8078 per metric ton for a container to be exported?

    1. Great thanks Andrew.

    2. Andrew Minalto

      not sure on that one, I haven’t imported anything weighting tonnes before…

      You should probably just ask your supplier to clarify this.

      Thanks,
      Andrew

  89. Thanks for your blog I benefited a lot
    just have question regarding shipping, I am starting export business From Indonesia to USA. Exporting seeds such as clove, black paper. Any advice with shipping company.

    1. Andrew Minalto

      I’m sure there are many local freight forwarders working in Indonesia – just contact several and get quotes to compare.

      Andrew

  90. Hello Andrew, looking at importing clothes from china. first time at this what is the smallest amount a company like woodland global will consider working with?
    thanks scott

    1. Andrew Minalto

      Hi Scott,

      There are no minimum order really – WG can do the shipment no matter how small it is. Of course, you have to keep in mind fixed admin costs and such so sending few kgs won’t be worthwhile.

      Thanks,
      Andrew

  91. Hi Andrew,

    Nice blog!
    I am new to importing and procurement. Trying to get answer for a very basic question. If i want to purchase an equipment worth 1000 USD, cant I raise an underpriced PO for 500 USD, make the supplier invoice me for 500 USD alone. And pay the remaining 500 USD to my supplier through other channel like black money. How will the customs in this case find out that my PO is underpriced?

    Regards,
    Ray

    1. Andrew Minalto

      I’m sorry Ray but I won’t even comment on such illegal activities.

  92. Alfredo Moya

    Hi Andrew

    I am hoping to import some goods from China (alibaba) to the United States. I would like to start my business on ebay. Which it will be the best way to bring product to my home. .

    1. Andrew Minalto

      Hi Alfredo,

      Thanks for your comment.

      Please check out my Importing from China guide for more details on this.

      Thanks,
      Andrew

  93. I’m about to purchase a new forklift from Jcb UK for the amount of £75k, I would like to export it to the gulf (Saudi Arabia). I’m doing this on a individual basis so have no company entity setup.
    How best to to make this deal efficient? Will I be charged UK taxes, vat, etc. Should I let the buyer deal with the shipping?
    Should I go for the fob or other or other option? Should I arrange the insurance separately? Any advice, guidelines would be much appreciated.

    1. Andrew Minalto

      Do you buy it for re-selling in Saudi Arabia?

  94. Hi Andrew
    Great post
    there are some questions in my mind
    i were to buy stuffs worth 40.000USD
    20″ container
    what payment method is best for me?

    is it possible if i use escrow or e-credit?

    1. Andrew Minalto

      Hi Eric,

      Yes, Escrow should be taken for amount like that. Some companies will also accept letter of credit from your bank, for orders of that size.

      Thanks,
      Andrew

  95. Great post. I was looking online for information on how to deal with customs to Canada and I stumbled upon your blog. You answered questions I haven’t even thought of yet. Thanks a lot.

    1. Andrew Minalto

      You’re welcome Wes! 🙂

  96. Hi Andrew

    I am hoping to import some goods from Lagos to the UK by L C L

    Do you know of a company ?

    Regards Mike

    1. Andrew Minalto

      Hi Mike,

      Try contacting Woodland Global.

      Maybe they can help you.

      Thanks,
      Andrew

  97. Hi Andrew,
    Hope all is well! What a brilliant blog! I’m from Toronto, Canada! I have a new connection to export scrap metal to India (used railway lines, copper wire and Raw copper).. Can you step me through the process? I would definitely appreciate that.. It would really help me out..
    Thank you in advance!
    Conrad

    1. Andrew Minalto

      Hi Conrad,

      Thanks for your comment.

      Unfortunately I can’ help you with a detailed guidon that as:

      1) I’m not in Canada;
      2) I have never exported anything to India;
      3) I have no experience in scar metal business.

      Good luck anyway!

      Thanks,
      Andrew

  98. Hi Andrew

    Quick question : a CIF HK price for a chinese fabric does include the full chinese VAT ( 17%) or it s possible to get without VAT ?

    1. Andrew Minalto

      Hi Guillaume,

      Exported goods from China are VAT free so you don’t have to pay Chinese VAT on these goods.

      Thanks,
      Andrew

      1. Thanks . Yes on finished goods it s (allmost) VAT free ( tax refund depend the type of product) .
        However in my case it s pure raw material .
        So you think even in that case , exporting a raw material from China is VAT free ?

        Thanks

        1. Andrew Minalto

          I have never had to pay VAT on any kind of goods/materials imported from China.

          I mean Chinese VAT, not EU one.

  99. Hi Andrew,

    looking for some answers to what is included in FOB price I have come accross your blog. Various people have different views on what is included in FOB price. I would like an expert view as to if Custom Clearance and any other charges are included in FOB or is it just the transportation charges?

    From Free on Board, I perceive as goods are free of every exepenses at origin port? or am I just singing from a completely wrong swing!?

    Thanks in advance for clarifying.

    Riaz

    1. Andrew Minalto

      Hi Riaz,

      FOB just means goods packed, sent to nearest port, that’s it.

      Shipping costs, customs clearance fees, VAT, import duty and delivery to your address is NOT included in FOB price.

      Thanks,
      Andrew

      1. Hi Andrew,
        Beg your pardon, but the answer you gave to the previous questioner from this one is inconsistent and looks downright wrong. He wants goods shipped from S. Korea to Kolkata, and you say FOB will cover freight cost to Kolkata. That may be the receiver’s nearest port, but it is not the shipper’s. Granted a shipper has discretion to choose among ports and isn’t forced to pick the closest one, but aren’t they restricted to the port of loading, and to a domestic port? There is no such thing as FOB (foreign) port of delivery.
        You are doing a lot to dispel the confusion around international trade, don’t get me wrong, I just want to understand the situation myself.
        Jon

        1. Andrew Minalto

          Hi Jon,

          Thanks for correcting me on this one, you’re correct.

          FOB price does not include actual shipping costs.

          Thanks,
          Andrew

  100. […] the sound of it, you have purchased goods on FOB basis which means that the goods are loaded onto the ship in China but you take care of customs clearance […]

  101. Hi Andrew,
    Very helpful blog.
    I am attempting to import some surgical items from South Korea to Nepal We also import from Malaysia and China. Our nearest sea port is Kolkata, India. We can take charge of the goods from Kolkata. Can you please advise me the freight forwarder that would be the most affordable for shipment of the goods.

    Thank you.

    1. Andrew Minalto

      Hi There,

      If you only need goods delivered to your port, then just ask supplier to arrange FOB terms for you when you buy goods and this will include shipping to your nearest port.

      Thanks,
      Andrew

  102. W. Rory Burnlees

    Hi Andrew , great blog. Also getting into some trading , I want to bring textiles from Chaing Mai to Spain , can I use a UK frieght forwarder or must it be Spanish , if so do you know of a good company preferably Barcelona ? ,

    Thanks,

    1. Andrew Minalto

      You can use a UK freight forwarder, sure but probably it will be easier for you to work with a local company.

      I can’t recommend any specific companies but I’m sure you can find many freight forwarders in Barcelona, just do a Google search, check local yellow pages etc.

      Thanks,
      Andrew

  103. hi Andrew am from Nigeria a first time importer from China.I will like you to advice me on which freight forwarder should I use.
    so my goods will be delivered directly to my company.the products am buying are industrial chemicals like iron oxide,titanium dioxide,ammonia,biocide etc
    I will appreciate your advice
    thanks

    1. Andrew Minalto

      Hi Kalu,

      Thanks for your comment.

      I haven’t sent any goods to Nigeria so unfortunately can’t help you out with this.

      You want to look in your local yellow pages/business pages or attend a trade show related to importing and find freight forwarder this way.

      Sorry about that.

      Andrew

  104. Pepukayi Chidanyika

    Hi Andrew,i am from Zimbabwe,Harare,i have just stumbled upon your blog as I was looking for information on purchasing goods from China. Your response to Malvina has provided all the answers to the questions I had but I would like you to advice me on reputable freight forwarding agents to bring my goods to zimbabwe. I would like to import brick molding machines and its my first time.so would like to avoid all the hassles and just get the goods on my door step. Your advice will be greatly appreciated. Thanks.

    Pepukayi

    1. Andrew Minalto

      Hi Pepukayi,

      Just check your local yellow pages in Zimbabwe and there you’ll find contacts for local importing/freight forwarding companies.

      Thanks,
      Andrew

    2. charlie2015

      Hi Andrew.

      I am thinking of starting a new venture and would be really grateful for your advice, you seem to have a lot of knowledge in importing.

      Can I give you a random figure of a made up order for a rough guide to see what extra costs one might expect on a simple order.

      Say a £5,000 order of bathrobes before CIF, to the UK Southampton,
      say each item £5.

      Thank you in advance..
      Charlie.

      What rough estimate would I be placing on an order like this?

      1. Andrew Minalto

        Hi Charlie,

        You mean shipping costs?

        What’s the weight and size of this order?

        1. Hi Andrew,

          Here is the reply from the manufacturer below ;

          ctn size: 66*44*32ctn
          pcs/ctn: 20pcs
          gross weight: about 17kg/ctn
          1000pcs, it need 50 ctns.total gross weight is about 850kg.
          china tax is17% , you will see the invoice.

          Look forward to your reply..

          1. Andrew Minalto

            China tax? What China tax is that?

            As for exact shipping costs, you should contact a freight forwarder such as Woodland Global and ask them for exact door to door quote.

            Thanks,
            Andrew

          2. Charlie

            So there is no China Tax?

          3. Andrew Minalto

            no, we as importers don’t pay any taxes in China.

        2. Hi Andrew,

          I’m about to ship some goods from China FOB. They’re going to Amazon who as you know are quite strict about pellet specs. I’ve given the specs to my supplier but they say they don’t use pallets and I’ll have to get my forwarder to do this.

          Is palletisation normally included in an a FOB price or is this something the forwarder would usually do?

          1. Andrew Minalto

            Hi Chris,

            Will you ship directly to Amazon?

            have you seen this post?

            https://andrewminalto.com/from-china-to-fba/

            Thanks,
            Andrew

          2. Hi Andrew,

            That’s a great post. I’ve contacted those companies for a quote.

            Many thanks,

            Chris

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