When we quote a chair programme, one of the first questions is the Incoterm — usually a choice between FOB and DDP. Buyers sometimes treat this as freight jargon. It is not. It decides who clears customs, who is the importer of record, who pays the duty, and who is left holding a problem if the goods are held. The wrong choice can quietly erase the price you negotiated.
FOB: we get it on the ship, you take it from there
Under FOB (Free On Board), we handle export packing, inland trucking to the port, export clearance and loading the vessel. Once the chairs are on board, responsibility shifts to you: you arrange and pay the ocean freight, insurance, import customs, duties and final delivery, and you are the importer of record. FOB gives you control and visibility of every downstream cost — and it makes you responsible for the tariff, which in the current US environment is not a number to wave off. Most experienced importers with their own freight forwarder prefer FOB because they can shop the freight and own the customs relationship.
DDP: we deliver to your door, duty paid
Under DDP (Delivered Duty Paid), we carry everything to the named destination — ocean freight, import clearance, import duties and taxes, and delivery — and we are effectively the party clearing the goods. The appeal is a single landed price: you know the all-in cost at your door on day one, with no customs paperwork on your side. The catch is that you are trusting the supplier to handle import compliance in your country correctly, and any duty estimate built into the price carries a risk premium. DDP suits buyers without an import desk who want simplicity and a fixed number.
The tariff line nobody likes to model
The reason this choice has teeth right now is the duty itself. Office and gaming chairs carry an ordinary import duty in the US, and on top of that sit the additional tariffs that have moved several times in recent years — the number is not small and it is not stable. Under FOB you are the importer of record, so that whole tariff lands on you, and if you quoted your retail price off the FOB figure alone you have understated your cost by a serious margin. Under DDP we carry it, but we have to estimate it forward and price in the risk that it changes between order and arrival. Neither term makes the duty disappear; it only decides who carries it and who carries the risk of it moving. The buyers who get burned are the ones who compared an FOB number against a budget that never had the tariff in it. Put the duty in the model first, then choose the term.
The trade-off, stated plainly
Here is the honest comparison. FOB usually shows a lower headline price, because the duty and destination costs are not in it — but those costs are real and they land on you, and if you have not modelled the tariff your "cheap" FOB chair is not cheap. DDP shows a higher, scarier number that is actually your true landed cost, with the supplier carrying the customs risk and pricing it in. Neither is a trick. FOB rewards a buyer who runs their own logistics and wants to control duty; DDP rewards a buyer who values one predictable figure and does not want to be importer of record. The mistake is comparing an FOB quote from one supplier against a DDP quote from another as if they were the same number — they are not.
How we handle it
We quote both when it helps, and we are explicit about what each one excludes so you are comparing like with like. For a first-time US buyer without a forwarder, we often start DDP for simplicity, then move to FOB once you have your own customs relationship and want to control the freight and duty yourself — the same way many buyers start on our ODM platform before moving to full OEM. We will tell you honestly which term is cheaper for your situation rather than pushing the one that is easier for us.
Tell us your destination port or door, your forwarder situation, and whether you want to be importer of record, and we will quote the Incoterm that actually fits. Reach us at the contact form or mail@ajjx.net.