hi how are you today I hope you're doing well and I hope you're having an amazing
day today I'm gonna share with you a short video to explain the risk of using
ex-work factory shipping term EWW FOB DDP are three most commonly used
Incoterms but a lot of people especially beginning amazon fba sellers don't know
there is risk involved of using ex work factory terms
what about DDP yes there are cases where the supplier quote you DDP where they
are supposed to be responsible all the way from tying on to your destination
but you end up having to pay tax and duty I call it DDP trap this is a short
video because the entire training is on the power sourcing course membership area
I've made a commitment to the members who bought to the sourcing course I'm
going to continue to add training materials to the membership area and
continue to help each one of them so that everybody who trusted me can be
super successful if you are still on the fence of buying the sourcing course I
strongly encourage you to take the advantage of the coupon code is going to expire soon so let me share some of the training material with you enjoy we
get this my friend after this lesson you will never be confused ever of the ex
work fob or DDP and you will know exactly the pros and cons of using each
term the EX work Factory FOB and DDP are three most popular shipping terms these
are also called Incoterms international commmerce terms once you understand the
differences the pros and cons of using each term you will feel much confident
of negotiating with the supplier on using each one of the term let me sling
now let's look at the ex work Factory if you are getting the quote from the
supplier is ex work Factory that from the point of pickup from the
supplier factory all the way to final delivery you are hundred percent
responsible for the shipping cost you pay this entire weight this entire blue
highlighted session it doesn't matter how much the origin charges it doesn't
matter how much is the in between charges it doesn't really matter how
much is the destination charge you're 100% responsible so what is the pros of
using ex work what is the cons of using ex work the pro is control imagine if
you're a big buyer for example you're moving several containers or months you
want you to leave it up to yourself to negotiate the best shipping rate with
your freight forwarder through this entire shipping process and you have a
lot of a buying leverage - so you don't want to leave this portion this big
chunk of money to your supplier what you want it to focus is to ask them give you
the cheapest the bottom line ex work factory price and then you take charge
hundred percent on the shipping cost now the come there are two costs in
terms of ex work number one is you have to do all the work obviously you don't
mind to do the work trying to negotiate the best price but the problem is a lot
of a beginning sellers they don't know how to negotiate the best shipping
rate especially when they have to deal with these origin charges destination
charges it's very intimidating another Con of using EX work factory is the export
risk what I'm saying is sometimes if you're buying a product that is
belongs to a regulated commodity the local government could have a very tight
control on how this product is going to be exported so if you are using ex
factory term your freight forwarder that you appointed from your side may not be
able to represent you to do the export clearance under the ex
factory shipping term buyer is responsible for paying for the entire
trip from moment you pick up from the factory all the way to final delivery
destination you are also responsible for all the risk involved with the shipment
the supplier is washing their hands from the moment you pick it up from the
factory if you had a trouble at the origin custom you couldn't have the
product exported from the local custom then the risk is on you okay let's go
over the pros and cons of using FOB or a DDP then we can come back and talk
about how we're going to mitigate the risk of using each shipping term so yes
I explain the pros and cons of using ex work FOB and DDP and also the DDP trap
and how to avoid it but most importantly I teach you how to use the best shipping
term based on the stage of your business if you're just starting what to do if
you are growing your business what to do and as your business mature what you do
so you can take advantage fully of each shipping term to give you the best
return on your money so that is today's a short video I hope you enjoy it
regardless I wish you a brilliant day I'll see you soon