Incoterms Explained: FOB, CIF, and EXW for Wellness Device Importers
Three letters on a quote change who is responsible for what, and when. Here is a plain-English walkthrough of the Incoterms you will actually encounter.
A quote listing "FOB Shenzhen" versus "CIF Los Angeles" is not just a pricing detail — it changes who arranges and pays for freight, who carries risk at each stage, and what your landed cost actually includes. Here is what the terms you will most often encounter actually mean.
EXW (Ex Works)
The supplier makes the goods available at their own facility, and you (or your freight forwarder) handle everything from there — export clearance, main freight, import clearance, final delivery. It is the lowest quoted price because it includes the least, not because it is the cheapest total cost — factor in that you are managing (or paying someone to manage) the entire logistics chain from the factory door onward.
FOB (Free on Board)
The supplier handles delivery to the port and export clearance; responsibility transfers to you once goods are loaded onto the vessel. This is the most common term for wholesale orders in this category — it is a reasonable middle ground where the supplier handles what they have direct control over (their own country's export process) and you handle the international shipping and import side, typically through your own freight forwarder.
CIF (Cost, Insurance, and Freight)
The supplier arranges and pays for main freight and insurance to your destination port; you handle import clearance and delivery from there. This can simplify things if you do not yet have an established freight forwarder relationship, though it is worth confirming the insurance coverage level rather than assuming it matches what you would arrange yourself.
Which one should you ask for?
If you already have a reliable freight forwarder and want direct control over shipping costs and carrier choice, FOB is usually the most practical default. If you are placing a first, smaller order and do not want to coordinate freight yourself, CIF trades some cost transparency for simplicity. EXW is worth considering mainly if you are consolidating shipments from multiple suppliers through your own logistics provider.
One thing to always confirm regardless of term
Ask which named port or location the term applies to specifically (e.g. "FOB Shenzhen" not just "FOB") — the term alone does not tell you where responsibility actually transfers without a location attached to it.