What Is DDP (Delivered Duty Paid)?
DDP (Delivered Duty Paid) means the seller delivers goods to your door, cleared for import, with all duties and taxes paid. This is the maximum obligation for the seller - you just receive the goods.
In simple terms: Price includes everything. Goods arrive at your warehouse ready to use.
Who Pays for What Under DDP
| Cost/Risk | Seller | Buyer |
|---|---|---|
| Export packaging | ✓ | |
| Export customs clearance | ✓ | |
| Freight (all modes) | ✓ | |
| Cargo insurance | ✓ | |
| Import customs clearance | ✓ | |
| Import duties and taxes | ✓ | |
| Delivery to final destination | ✓ | |
| Unloading at destination | ✓ (unless agreed) |
Risk transfer: At buyer's premises, after delivery.
Pros and Cons of DDP
Advantages:
- Simplest for buyer - one price, no surprises
- No customs paperwork for you to handle
- Predictable landed cost - easy budgeting
- Risk stays with seller until delivery
Disadvantages:
- Higher quoted price - seller builds in margin
- Less control over logistics and timing
- VAT/GST handling - may need adjustment for your books
- Duty classification risk - seller may use wrong codes
When to Use DDP
Good for:
- First-time importers who want simplicity
- Small/medium orders where convenience beats cost
- Sellers who have logistics experience in your country
- When predictable landed cost is priority
Consider alternatives when:
- Order is large (savings from self-managed logistics)
- You need import documentation control
- You have an established freight forwarder
- VAT/duty recovery is important for your business
Cost comparison example:
| Term | Quoted Price | Your Costs | Total |
|---|---|---|---|
| FOB | $10,000 | $2,500 (freight, duty) | $12,500 |
| DDP | $13,500 | $0 | $13,500 |
DDP often costs 5-15% more than managing logistics yourself, but saves significant time and complexity.