Incoterms for Wholesale: EU & International Delivery Terms

Incoterms for wholesale are a practical way to define responsibilities when goods move from a brand or distributor to a retailer. For Nordic and European businesses, the selected delivery term can affect the quote a buyer sees, freight arrangements, border formalities and the point at which transit risk moves from seller to buyer. ^[1]

The right term is not automatically the cheapest or the most customer-friendly one. It should match the route, the transport mode, the buyer’s ability to import goods and the operating model your team can support repeatedly.

What are Incoterms for wholesale?

Incoterms are standardised trade terms published by the International Chamber of Commerce (ICC) that allocate delivery obligations, specified costs and risk between a seller and a buyer. The current ruleset is Incoterms® 2020. ^[1]

In a wholesale context, the buyer may be a retailer, distributor or another commercial importer. The terms help both parties understand questions such as:

• Who arranges collection or delivery?
• Who completes export customs clearance?
• Who contracts and pays for the main transport leg?
• At which point does risk of loss or damage transfer?
• Who completes import customs clearance and pays import charges?

They are important, but they are not a complete retailer or distributor agreement. Incoterms do not determine ownership or title transfer, payment terms or VAT treatment; those matters need their own clear contract wording and professional advice where appropriate. ^[1]

A complete reference should name the rule, the exact place or port, and the version. For example: “DAP Stockholm, Incoterms® 2020.” “DAP Sweden” leaves room for interpretation about the actual delivery point. ^[1]

A parcel passing between two hands on a route from a warehouse to a storefront

Which Incoterms are most useful for EU and international wholesale?

For most wholesale orders shipped by road, air, rail or parcel carrier, start with the rules designed for any mode of transport: EXW, FCA, CPT, CIP, DAP and DDP. ^[1]

EXW: Ex Works

Under EXW (Ex Works), the seller makes goods available at its premises or another named place. The buyer takes on the transport and export process from that point. ^[1]

EXW can look simple for a seller, but it may be awkward where the seller needs reliable evidence of export, controls collection, or must support a buyer that is unfamiliar with export formalities.

FCA: Free Carrier

FCA (Free Carrier) requires the seller to deliver goods to a carrier or another party nominated by the buyer at a named place, with export clearance handled by the seller. ^[1]

FCA may be a more workable alternative to EXW for export-oriented wholesale because it gives the seller a defined handover point and export responsibility.

For FCA, be precise about the named place. Delivery mechanics differ when handover occurs at the seller’s premises rather than a carrier terminal or another location. ^[1]

CPT and CIP: seller pays carriage, risk moves earlier

With CPT (Carriage Paid To), the seller arranges and pays carriage to the named destination, but risk transfers when the goods are handed to the first carrier. CIP (Carriage and Insurance Paid To) works similarly, with the seller also arranging insurance under the rule’s requirements. ^[1]

Paying freight to a destination does not necessarily mean the seller carries transit risk until arrival. Reflect that distinction in the contract, insurance arrangements and claims process. ^[1]

DAP and DDP: delivered options

DAP (Delivered at Place) means the seller brings goods to the named destination, ready for unloading. The buyer handles import clearance, import charges and unloading. ^[2]

DDP (Delivered Duty Paid) places the import-clearance and import-charge obligations on the seller. ^[2]

DDP can offer a simple buyer experience, but it can also require the seller to manage destination-market customs, tax, registrations, agents and documentation. Do not choose DDP merely because a buyer requests “delivered pricing”; verify what the route and market require.

FOB and CIF: for sea and inland waterway transport

FOB (Free On Board) and CIF (Cost, Insurance and Freight) are maritime rules intended for sea and inland waterway transport. FOB transfers risk once goods are on board the vessel. CIF also requires the seller to arrange freight and insurance to the named port of destination, while risk transfers at shipment rather than arrival. ^[1]

They should not be treated as universal shorthand for international delivery. For road, air, rail and parcel shipments, use a rule suited to any mode of transport instead. ^[1]

For route planning beyond the delivery clause, see this guide to cross-border shipping for EU B2B orders.

Who pays freight, insurance and customs under each Incoterm?

The matrix below is a working summary of the ICC rules. “Seller” and “buyer” describe the default allocation under the rule; a commercial agreement can allocate extra services separately, but should not use that as a substitute for a clear Incoterm. ^[1][2]

A cargo crate traveling along a route with a ship, truck and destination warehouse

How do Incoterms affect wholesale landed cost and margin?

Wholesale landed cost is the combined cost of getting goods to the agreed delivery point, including applicable transport, border and handling costs. An Incoterm changes who bears particular elements of that cost; it does not make them disappear.

Consider a Nordic brand shipping a wholesale order to a retailer in a market reached through an external customs border.

• With FCA, the brand may price the goods to the agreed carrier handover point. The retailer then arranges main transport, import customs clearance, broker services, import duties and applicable import taxes.
• With DAP, the brand includes delivery to the retailer’s named location in its operational plan and commercial price. The retailer still manages import clearance and import charges, and unloads the goods. ^[2]
• With DDP, the brand takes on those import-side delivery obligations too. Its price and process must account for freight, customs brokerage, duties, import taxes where applicable, destination requirements and exception handling. ^[2]

The same product can therefore have a different practical margin and a different buyer cost depending on the term, destination and shipment profile. Assess the selling price, ordering currency, order size and delivery destination together rather than setting freight policy in isolation. For related pricing choices, read the guide to B2B multi-currency pricing.

Landed-cost checklist before accepting an order

Review these inputs for each route or customer policy:

• product price and invoicing currency;
• packaging, collection and domestic handling;
• main carriage and any fuel, remote-area or delivery surcharges;
• insurance and the party expected to make a cargo claim;
• export customs clearance documentation;
• import customs responsibilities, broker fees, duties and import VAT where relevant;
• destination handling, appointment and unloading requirements;
• returns route and the cost of failed delivery or refusal.

Tax treatment depends on the specific supply, parties and movement of goods. An Incoterm can support a well-designed process, but it does not determine VAT treatment by itself. ^[1] Use the delivery term alongside a documented approach to EU VAT compliance for wholesale.

Should a wholesaler use DAP or DDP for retailer and distributor orders?

DAP can fit where the buyer can act as importer and manage import clearance, while DDP is for situations where the seller is prepared to manage the import-side delivery obligations. Neither is universally preferable. ^[2]

DAP can suit established distributors that have local importing capability, customs support and a clear process for duties and import VAT. It gives the seller control of carriage to an agreed destination while keeping the buyer responsible for import formalities. ^[2]

DDP may be commercially attractive where a retailer wants a more delivered service. Use it only after checking that the seller can lawfully and practically complete the required import activity in the destination market.

The decision should be agreed at account level, not improvised by a sales representative on a one-off quote. A distributor with a strong import setup may use a different term from a smaller retailer even when both buy the same range.

A forked delivery route leading to a retailer warehouse and a distributor warehouse

Do Incoterms determine VAT, ownership and payment terms?

No. Incoterms do not determine VAT, ownership transfer or payment terms. They allocate delivery tasks, costs and risk in relation to the movement of goods. ^[1]

Your wholesale agreement should separately state:

• when title or ownership transfers;
• the invoicing currency and any currency conversion approach;
• payment due date, credit approval and consequences of late payment;
• the intended VAT treatment and supporting information required from the buyer;
• customs valuation inputs where relevant;
• product acceptance, returns and damage-claim procedures;
• governing law and dispute-resolution process.

A freight term is not a tax conclusion, and a carrier booking is not a complete import strategy.

What should a wholesale delivery clause document?

A delivery clause should let a new operations colleague, buyer or freight forwarder understand the agreed process without relying on an email thread. Include:

1. The named Incoterm and rules version — for example, “FCA Gothenburg warehouse, Incoterms® 2020.”
2. A precise named place or port — including the delivery point, not just a country. ^[1]
3. Transport mode and handover method — particularly where collection or consolidation is involved.
4. Export and import formalities — identify who is responsible for clearance, data and supporting documents.
5. Freight and insurance arrangements — including the intended insurance level and claims contact.
6. Delivery window, packaging and unloading — state whether bookings, tail-lift service or unloading equipment are needed.
7. Charges excluded from the product price — make duties, taxes, brokerage and surcharges visible where they are not included.
8. Risk and claims process — record inspection expectations, evidence requirements and notification timing.
9. Delay and exception handling — cover carrier delays, customs holds, missing documents and refused deliveries.

Use the term as one part of the wider contract, alongside this wholesale terms and conditions checklist.

How should Incoterms appear in wholesale quotes, orders and invoices?

Use the same approved wording across retailer agreements, distributor contracts, price lists, quotes, order confirmations, shipping instructions and invoices. Consistency makes it less likely that a buyer sees DAP in a quote, receives an invoice that implies another arrangement, and then disputes an import charge at delivery.

Build a simple acceptance check before an order is released:

1. Confirm the customer’s approved delivery term and precise named place.
2. Validate delivery country, billing country, currency and freight treatment.
3. Check whether the route involves export or import clearance and whether customer customs data is complete.
4. Confirm the relevant charges are included, excluded or separately itemised as agreed.
5. Send the confirmed term to the warehouse, carrier and finance workflow.

A centralised B2B system can help make this repeatable. Brandgate’s branded B2B storefront, retailer onboarding, multi-currency catalogues, VAT-aware invoicing and order-to-invoice workflow can keep the selected delivery term visible from order capture through invoicing.

If delivery terms are currently scattered between spreadsheets, emails and invoice notes, map your standard routes first, then make the chosen wording a required field in your order process. Book a demo to see how Brandgate can support a more consistent wholesale order-to-invoice workflow.