Incoterms for ecommerce in Europe, who pays, who clears, who carries the risk
One three-letter term decides who pays the freight, who clears customs, who owes the import duty and where the risk passes from seller to buyer. Get the Incoterm wrong and the cost lands where you did not plan, or, on imported parcels, your customer is stopped for a charge at the door. Here is how the common terms work for European ecommerce, and how to pick the one that fits your lane.
The difference
The right Incoterm, no surprise charge at the door
Incoterms are the shorthand that splits cost and responsibility between a seller and a buyer in a sales contract. When you buy stock from abroad or ship parcels into the EU, the choice is not paperwork trivia: it sets your landed cost, decides who clears customs and pays the duty, and, between businesses, fixes who carries the risk in transit. When you sell to EU consumers, the law keeps that risk with you until the parcel arrives. Filter the directory by country, carrier and VAT/IOSS support, then confirm the customs step with each partner.
See who can trade on your terms
Filter the directory by countries served, carriers and VAT/IOSS support, then ask partners whether they can handle the customs step your term needs, whether that is delivering duty-paid to the customer's door or clearing your inbound stock on import, so the term you quote is one your fulfilment can support.
Landed cost you can predict
The term decides which duties, taxes and freight fall to you rather than the buyer. Ask each partner how they handle that step and what it costs, so the cost is priced in up front, not sprung on you or your customer later.
How to choose an Incoterm
- 01
Map your lane and buyer
Set out where goods ship from and to, and who the receiver is: your own fulfilment centre on an inbound import, or the end customer on a cross-border sale. The right term differs for each.
- 02
Decide who should carry duty and clearance
For parcels imported into the EU for consumers, delivering duty-paid (DDP) keeps the customer from being stopped for a charge; since July 2026 that includes a €3 customs duty per item on parcels of €150 or less, as well as the VAT. For inbound stock, decide whether you or the supplier clears and pays import duty.
- 03
Match to a partner who supports it
Filter the directory by country, carrier and VAT/IOSS support, then request an intro so the partner can confirm its customs setup and quote landed cost and clearance against your real lane rather than assumed. Your brand stays anonymous until the partner accepts.
- 01
Cost split
The Incoterm draws the line between which freight, insurance, duty and handling the seller pays and which the buyer picks up, so both sides know the true price of the movement.
- 02
Customs responsibility
It sets which party must handle export and import clearance and pay the duty and import VAT. Customs law then decides who can act as declarant, so a seller outside the EU usually needs an EU customs representative to deliver duty-paid.
- 03
Risk transfer
In a business sale it sets the exact point at which risk of loss or damage passes from seller to buyer, which decides who bears the loss if the goods do not arrive intact. Only CIF and CIP oblige the seller to insure.
Trade on terms your fulfilment can deliver
Start from the directory, or publish a store profile and let the matching score European partners on your countries, platforms, volume and needs, then confirm in an intro how each one handles the customs step your Incoterm requires.
What is Incoterms?
Incoterms, short for International Commercial Terms, are a set of standard three-letter rules published by the International Chamber of Commerce that define, in a contract of sale, exactly how cost and responsibility are split between the seller and the buyer. Each term answers three questions: who pays for carriage and related charges, who is responsible for export and import customs clearance, and at what point the risk of loss or damage passes from one party to the other. For European ecommerce the terms most often discussed are DDP (Delivered Duty Paid), where the seller delivers to the buyer with all duties and taxes paid so the customer pays nothing on arrival; DAP (Delivered at Place), where the seller delivers but the buyer is responsible for import duty and taxes; and, on the inbound side, terms such as FCA, FOB and EXW that decide how much of the journey and clearance a supplier handles before the goods become the brand's responsibility. The choice is commercially significant rather than administrative: it sets landed cost, determines whether an end customer is stopped for an unexpected charge at the door, and, in a business sale, fixes who bears the loss if goods go missing in transit. Getting the term right, and working with a fulfilment partner whose customs and carrier capability can support it, is what turns a quoted price into the price that is actually paid. Incoterms are revised periodically; the current set is Incoterms 2020.
Also called: International Commercial Terms, delivery terms, shipping terms
Choosing the right Incoterm for ecommerce
Who pays freight, who clears customs, who carries duty and risk, and how the choice reshapes landed cost and the doorstep experience.
Who carries the cost, and who carries the risk
Incoterms are the standard three-letter rules that, once written into a sales contract, define exactly where the seller's responsibility ends and the buyer's begins. They answer four practical questions on a consignment: who arranges and pays for the freight, who clears customs on each side, who pays the import duty and tax, and at what point the risk of loss or damage transfers. That last point matters more than people expect: if goods are damaged in transit between businesses, the Incoterm decides whose problem it is. For a brand importing stock, agreeing the wrong term with a supplier can leave you unexpectedly responsible for freight and clearance you assumed were included, or exposed to risk while goods are still on the water. Reading the term as a division of responsibilities, not jargon, is what lets you compare two supplier quotes on a genuine like-for-like basis.
DAP, DDP and the doorstep experience
For imported parcels sold to end customers, the labels DAP and DDP are often used, though Incoterms were written for sales between businesses. Under Delivered At Place, the goods arrive but the buyer pays the import duty and tax, which, for a consumer, means a courier asking for money before they can have their parcel. Under Delivered Duty Paid, you cover those charges so the customer pays nothing on arrival. The difference is invisible on a spec sheet but decisive at the doorstep: DAP is cheaper for you but leaves the customer a bill at the door; DDP means you prepay the VAT and, since July 2026, a €3 customs duty per item on parcels of €150 or less, in return for a clean, domestic-feeling delivery. Stock already held in an EU warehouse needs no customs clearance for sales to other EU countries. The right choice depends on your margins, your markets and how price-sensitive your customers are. Understanding how each term changes both your landed cost and the buyer's experience is what turns Incoterms from a compliance detail into a lever you set deliberately.
Common questions
What are Incoterms?
Incoterms are standard three-letter rules that split cost and responsibility on a shipment between seller and buyer. Each term sets who pays freight, who clears export and import customs, who owes the duty, and where the risk of loss passes. They are published by the International Chamber of Commerce; the current set is Incoterms 2020.
What is the difference between DDP and DAP?
Under DDP, Delivered Duty Paid, the seller delivers to the buyer with all duties and import taxes already paid, so the customer pays nothing on arrival. Under DAP, Delivered at Place, the seller delivers but the buyer is responsible for the import duty and taxes. For parcels shipped into the EU to consumers, DDP avoids a surprise charge at the door; stock already held in the EU meets no customs on sales within it.
Which Incoterm is best for ecommerce sales to EU customers?
For parcels imported into the EU for consumers, prepaying the import charges, usually called DDP, is often preferred because the customer is not asked to pay duty or VAT to the carrier. For parcels of €150 or less that means charging VAT at checkout through IOSS and, since July 2026, prepaying a €3 customs duty per item. If your stock is already in the EU, sales to EU customers involve no customs at all. Ask partners how they handle this.
Which Incoterm should I use for inbound stock?
For stock coming into a European fulfilment centre, common choices are FCA or FOB, where the supplier clears export and you or your forwarder handle the main freight and import; EXW, where you also clear export in the supplier's country; or DDP, where the supplier acts as importer. For containers the ICC points to FCA rather than FOB. The right one depends on who has the stronger freight and customs capability on that lane, so ask partners whether they can advise and clear on your route.
Do Incoterms cover VAT and IOSS?
Incoterms decide who is responsible for import duty and clearance, which is closely tied to who accounts for import VAT, but they do not replace a VAT or IOSS registration. You still need the right tax setup to collect and remit VAT on EU sales; the Incoterm decides which party bears it, not whether it is due, and under IOSS the VAT is charged at checkout rather than at the border.
Who is responsible if goods are lost in transit?
Between businesses, the Incoterm fixes the exact point at which risk passes from seller to buyer, and whoever holds the risk then bears the loss. Only CIF and CIP oblige the seller to insure, so your cargo cover needs to match the term. When you sell to EU consumers, the law generally keeps the risk with you until they have the parcel.