EXW (Ex Works) is the Incoterms rule with the minimum possible obligation for the seller: the goods are simply made available at the seller's premises — the factory gate or warehouse door — not loaded, not export-cleared. From that point, everything is the buyer's problem and expense: loading, inland transport, export clearance, international freight, insurance, import clearance, duties, and final delivery.
EXW is one of the rules published by the International Chamber of Commerce in Incoterms 2020, usable for any mode of transport — and it is the term behind most of the suspiciously low prices in supplier quotes.
How does EXW split responsibilities?
EXW vs. FCA vs. FOB
At the other end of the spectrum sits DDP, where the seller carries everything to the buyer's door — EXW and DDP are the two bookends of the Incoterms ladder.
Why the cheapest quote is usually EXW
An EXW price contains nothing but the product, which is exactly why it looks so good next to an FOB or CIF quote from a competing factory. The comparison only becomes honest at full landed cost: add loading, inland haulage, export clearance, freight, insurance, duties, and destination charges to every quote, on the same basis, and the "cheapest" supplier frequently stops being cheapest.
What do brands get wrong with EXW?
- Agreeing to export-clear in a country where they can't. Under EXW the buyer handles export formalities in the seller's country — but many countries effectively require a local exporter of record. The standard fix is simple: buy FCA instead.
- The loading grey zone. The seller isn't obliged to load, yet in practice always does — at the buyer's risk. A forklift accident at the supplier's dock is, absurdly, the buyer's loss under strict EXW. Put loading responsibility in the contract explicitly.
- The seller's VAT trap. To zero-rate an export sale, the seller needs proof the goods left the country — proof that under EXW sits in the buyer's hands. Missing export evidence can force the seller to charge domestic VAT, souring the deal for both sides. Agree upfront how export documentation will be shared.
- Underestimating the coordination load. EXW hands the buyer the entire chain — pickup scheduling, export brokers, freight, insurance, import. Without a forwarder and a destination setup already in place, the discount is paid back in delays and fees.
FAQ
Who pays for shipping under EXW?
The buyer pays for everything: loading at the seller's premises, transport to the port or terminal, export clearance, international freight, insurance, import duties and taxes, and delivery to the final destination. The seller's only job is to have the goods ready and packaged.
Who handles export clearance under EXW?
The buyer — in the seller's country, which is the rule's biggest practical weakness. Because many jurisdictions require a locally established exporter, the ICC recommends FCA instead of EXW for most international transactions.
What is the difference between EXW and FOB?
Under EXW the seller merely makes goods available at its premises, unloaded and not export-cleared. Under FOB the seller transports the goods to the port, clears them for export, and loads them on board the vessel — risk and cost transfer there instead of at the factory gate.
An EXW deal hands you the supplier's driveway-to-your-door problem: export clearance, freight, insurance, import, and every fee in between. eBrands runs that chain for brands entering Europe and the US — imports, registrations, and compliance included, as your Merchant of Record — see how it works for physical-goods brands.
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