At a Glance
- Level of obligation
- Maximum seller obligation
- Transfer of risk
- On delivery at the destination
- Seller pays
- Everything, including import and customs
- Buyer pays
- Unloading only (optional)
What DDP means for sellers
Under DDP the seller takes on: all export formalities in the country of origin, all transport costs, insurance, transit documents (TIR, for example), import clearance in the country of destination, import duties and taxes (VAT, for instance), and the transport risk up to delivery. This is the most extensive obligation of all the Incoterms and presumes thorough knowledge of the customs rules in the importing country.
Risks and drawbacks of DDP
DDP sounds convenient for the buyer, but it carries risks for the seller: unfamiliar customs rules, unexpected import duties and liability for customs delays. Many exporters avoid DDP because they have no customs registration of their own in the importing country and must engage local agents. That drives up both costs and risks.
DDP in e-commerce
In international e-commerce (particularly from China and the USA) DDP is frequently offered to give customers an all-inclusive experience. Platforms such as Amazon enable DDP deliveries for marketplaces. Consumers do not have to pay customs charges on receipt – which lifts conversion noticeably.
