EXW (Ex Works) meaning: what the buyer pays and handles
EXW gives the lowest-looking factory price and the most work for the buyer.
Definition
EXW (Ex Works)EXW, or Ex Works, is an Incoterms 2020 rule under which the seller delivers by placing the goods at the buyer’s disposal at its own premises or another named place, not loaded and not cleared for export. From that point the buyer bears the costs and risks of loading, export formalities, transport, import clearance and delivery.
What EXW means for a brand owner buying from a factory
Under EXW the factory’s job ends when the goods are ready at its gate. Your forwarder collects them, and you are responsible for loading, export customs, freight to your country, import customs, duties and delivery. Because so little is included, EXW quotes look cheaper than FOB or DDP quotes for the same goods.
The practical problem is export clearance. Export formalities usually have to be handled by someone in the seller’s country, so in practice the buyer still depends on the seller or a local forwarder to do them. Loading is another grey area: under EXW the seller has no obligation to load, but the goods usually leave on the factory’s forklift. If something is damaged during loading, the question of who bears it can become a dispute. Insurance is a further gap, because the goods travel at your risk from the first moment. Check that your cover starts at the factory gate, not at the port.
ICC guidance suggests FCA in many cases where parties choose EXW, because FCA keeps the seller responsible for export clearance and, at its premises, for loading. Whichever you pick, compare quotes on full landed cost, not on the factory price.
This is general information based on the Incoterms 2020 rules published by the ICC. Logistics terms are agreed during supplier selection in our manufacturing stage.
Related terms
Incoterms
ICC trade terms that set where delivery happens and how risk and costs split between buyer and seller.
FOB (Free on Board)
The seller delivers goods on board the vessel at the port of shipment; the buyer handles the rest.
DDP (Delivered Duty Paid)
The seller delivers to the named destination, cleared for import with duties paid.
Landed cost
The full cost of a product once it reaches your warehouse, including freight, duties and fees.
Frequently asked questions
Is EXW cheaper than FOB?
The quoted price is usually lower, because the seller includes less. The total cost to you may be similar or higher once you pay for local pickup, export clearance and handling at origin yourself.
Who loads the goods under EXW?
Under the rule, the seller is not obliged to load. In practice the seller often does. If loading matters to you, say who loads and at whose risk in the contract, or use FCA.
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