A must-read for foreign trade beginners! The most comprehensive guide to precautions and transportation terms. In foreign trade, pay attention to mindset, processes, clients, compliance, and avoiding pitfalls, international transportation terms EXW, FOB, CIF, DDP, etc.

At the beginning, the most important thing is not to immediately take the orders, but to lay a solid foundation.

Foreign trade is a slow-burning industry. Customer development, communication, ordering, and payment—this entire process may take a long time, so don't rush.

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1. Basic processes to understand

The foreign trade process is like a line:

Customer inquiry → Quotation → Negotiation → Production → Delivery → Payment → After-sales

Basic terms and payment methods must be clear:

EXW (Ex Works)

Understanding method: The seller places the goods at the factory gate, and the buyer comes to pick them up.

Seller: Only responsible for delivering the goods.

Buyer: Responsible for all subsequent transportation, insurance, customs clearance, and costs.

Newbie Reminder: Most factories quote EXW prices, which may seem cheap, but the subsequent costs are all on you.

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FOB (Free On Board)

Understanding method: The seller delivers the goods to the port, helps you load the ship, and completes customs clearance.

Seller: Responsible for domestic exports to the ship.

Buyer: Responsible for all transportation, insurance, and import customs clearance after the goods are loaded on board.

Common choice: Many foreign trade people prefer FOB because the seller handles the matters of the exporting country, and then the buyer can simply find a freight forwarder to take over.

FCA (Free Carrier)

Understanding method: One step more than EXW, the seller is responsible for export customs clearance and delivering the goods to the carrier designated by the buyer.

Seller: Customs clearance + delivery to the carrier.

Buyer: Responsible for all matters after the carrier takes over.

Note: It is easy to confuse with FOB, be sure to confirm "where the goods are delivered and who is responsible."

CPT (Carriage Paid To)

Understanding method: The seller helps you transport the goods to the import port, but the risk has already been transferred to the buyer.

Seller: Responsible for export customs clearance + shipping costs.

Buyer: Responsible for unloading, insurance, and import customs clearance.

CIP (Carriage and Insurance Paid To)

Understanding method: Same as CPT, but the seller also needs to help you buy insurance.

Difference: CIP applies to all modes of transportation, while CIF is only suitable for maritime transport.

DAT (Delivered At Terminal)

Understanding method: The seller is responsible for delivering the goods to the import port and unloading them.

Buyer: Responsible from the moment the goods are unloaded, including duties and customs clearance.

DAP (Delivered At Place)

Understanding method: The seller is responsible for delivering the goods to the buyer's designated location (warehouse/factory), and the buyer is responsible for customs clearance and unloading.

Convenient for buyers, but sellers bear more risk.

DDP (Delivered Duty Paid)

Understanding method: The most worry-free! The seller is responsible for all costs + risks until the goods are delivered to the buyer's doorstep.

Buyer: Only responsible for unloading.

Note: Although it is the most convenient, the price is usually higher because sellers tend to choose logistics they are familiar with, which may not necessarily be the cheapest.

FAS (Free Alongside Ship)

Understanding method: The seller is only responsible for delivering the goods to the port next to the ship, and the loading onto the ship is the buyer's responsibility.

The difference between FAS and FOB: FOB sellers help with loading the ship, while FAS does not.

CFR (Cost and Freight)

Understanding method: The seller is responsible for the freight to the destination port, but once the goods are on board, the risk is transferred to the buyer.

Similar to CPT, but CFR only applies to water transport.

CIF (Cost, Insurance and Freight)

Understanding method: Like CFR, but the seller also needs to help the buyer purchase insurance.

CIF is only suitable for water transport, equivalent to the maritime version of CIP.

Summary -

EXW is the cheapest, but the buyer has the most trouble.

FOB is the most commonly used option, with clear responsibilities, and both the buyer and seller manage half.

DDP is the most worry-free, but the price is the highest. It's best for beginners to compare more.

Remember: CFR/CIF is only suitable for sea transportation, CPT/CIP is applicable to all modes of transport.

EXW: The seller only places the goods at the factory gate.

FOB: Seller delivers on board the ship.

CFR/CIF: The seller pays to the port (CIF also helps buy insurance).

DDP: Seller fully covers, delivered to your doorstep.

2. Products must be familiar

Familiar with product information, specifications, uses, and advantages can be explained clearly.

When a customer asks a question, being able to answer it shows professionalism.

3. Customer Development and Communication

Don't just rely on the platform; learn to actively find clients (Google, LinkedIn, customs data)

Emails should be concise and professional: clear subject, avoid sending spam emails.

Pay attention to time differences and politeness, respect customers' communication habits.

IV. Compliance and Risk Control

Does the product require certification (FDA, CE, RoHS, etc.)

Payment method security: Small orders require advance payment, large orders should preferably use letters of credit/wire transfer.

The contract must be signed; do not rely solely on verbal promises.

Logistics must be confirmed in advance: costs, timeliness, channels

5. Common Misunderstandings for Newcomers

Too reliant on the platform, not actively developing clients Blindly cutting prices, ultimately losing money Lack of understanding of the rules, insufficient professionalism, clients do not trust Not following up with clients, easily intercepted by others

New foreign trade beginners should maintain a steady mindset, learn more, understand the process, become familiar with the products, control risks, and actively seek customers.

Don't be afraid of rejection; accumulating clients is the core.

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