![]() You can also make your own decisions as buyer regarding customs clearance – whether or not to use a broker to help with the import/export process, for example. You might decide to employ a freight forwarder to make all the arrangements on your behalf, or contract individual transport companies to move the goods as needed. You can be confident that the seller isn’t adding a margin or markup to the cost of transport. The exact cost of goods, and of all elements of transporting them, are clear – which should mean there are no surprises.īuyer is in control of shipping arrangements and costsīecause you’ll set up all the transportation arrangements yourself you can compare the market to be sure you’re getting the best deal available. ![]() Using EXW terms means that as buyer, you have complete control of your shipment. The cost, and in most cases, risks associated with moving the goods from their origin to the UK, fall to the buyer. It’s important to be really clear on the export documentation you will be able to obtain from the seller, and make sure you familiarise yourself with local customs regulations, to avoid issues. That means that any additional costs incurred when clearing customs, for example, will fall to the buyer. Under Ex Works terms, the buyer bears all of the risk involved in the shipment. Payments can be arranged online for convenience, and the service is FCA regulated – just like your normal bank. TransferWise offers international payments using the real, mid-market exchange rate, and just a low upfront fee – which can mean they’re up to eight times cheaper than using a UK high street bank. Instead of using your bank to arrange payments to international suppliers and service providers, you could be much better off choosing a specialist in international payments like TransferWise. Not only are there upfront fees to consider, it’s common for banks to add a markup to the exchange rate they offer customers, which can mean you lose out every time you make an international payment. Importing Ex Works is likely to involve making several international payments – and these cross border transactions can be costly. You might also consider employing the services of a customs broker, to help complete all the paperwork needed to get your purchase through customs smoothly. That can mean that, as well as paying your supplier, you’ll have to arrange and pay for things like air or sea freight, and local haulage. If you’re buying goods from abroad under EXW terms, you’ll be responsible for all of the costs involved in setting up shipping and customs clearance. The seller is then obliged to provide the documents required for export processes, for example, although they can charge for doing so. Usually this will mean that the buyer makes separate arrangements to have the products collected and shipped, including completing customs clearance. It means that the seller simply makes the goods available, at their warehouse for example, and the buyer is then responsible for arranging everything else. ![]() Of all Incoterms used, Ex Works places the highest possible obligation on the buyer, and the lowest possible obligation on the seller. This Incoterm puts the full obligation for things like arranging and paying for shipping, and dealing with customs clearance, on the buyer.ĮXW is often used when obtaining a quotation for a price of goods, to express the pure cost of goods without any costs included. Having an agreed definition of these terms reduces the risk of suppliers and buyers misunderstanding or misinterpreting what each other wants or needs, when it comes to international procurement of goods.Įx Works, also known as Ex Works (named place of delivery), or EXW, can be used in relation to any form of transport. Incoterms or International Commercial Terms, are trade terms defined by the International Chamber of Commerce, used to communicate the tasks and costs involved in international shipping. Read on to learn more about what Ex Works actually means, and the advantages and disadvantages of using this Incoterm when buying goods from abroad. They’re only a few letters long, but using the wrong Incoterm when buying goods from a supplier based overseas can be an extremely costly mistake.
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