Sourcing Guides

Incoterms Explained: FOB, CIF, EXW and What They Mean for You

Shipping terms materially affect your landed cost and risk exposure — here's a plain-language breakdown of the three most common terms in electronics sourcing.

Published March 9, 2026 · Sourcing Guides

EXW (Ex Works)

The buyer takes responsibility for freight from the factory door onward, including export clearance — offers the lowest quoted unit price but requires the buyer (or their freight forwarder) to manage the full logistics chain.

FOB (Free on Board)

The factory handles export clearance and loading onto the vessel; the buyer arranges and pays for ocean freight from that point — the most common term in electronics sourcing, balancing factory responsibility with buyer control over freight.

CIF (Cost, Insurance, Freight)

The factory arranges and pays for freight and insurance to your destination port, bundled into a single quoted price — convenient for buyers without an established freight forwarder relationship, though often at a premium versus arranging freight independently.

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