Ex Works (EXW) | BETA (2024)

FAQs

What does EXW mean on a quote? ›

EXW stands for Ex Works, an Incoterm whereby the buyer of a shipped product pays for the goods when they are delivered to a specified location. FOB, or Free on Board, instead shifts the responsibility of the goods to the buyer as soon as they are loaded onboard the ship.

EXW stands for Ex Works and is one of the 11 Incoterms® rules. It places minimum responsibility on the seller, who makes the goods available at a location, usually the seller's premises or another named place such as a factory or warehouse. The seller does not need to load goods or clear them for export.

EXW, short for “Ex Works,” places most responsibility with the buyer. The seller is expected to have the goods ready for collection at the agreed place of delivery (commonly the seller's factory, mill, plant or warehouse).

Ex Works assigns the buyer with the risk for loss and damage to the goods during loading. Though the seller normally loads the merchandise as common procedure, under Ex Works, it is the buyer who's at risk if the goods are damaged during loading.

Key Takeaways. Ex Works (EXW) is a shipping arrangement in which a seller makes a product available at a specific location, but the buyer has to pay the transport costs.

Example of EX Works

For instance, suppose Business A has 100 generators to export to Business B. A charges $400 per generator plus shipping charges, whereas B offers $300 without shipping costs. If the importer can find a cheaper shipping cost deal than what A is offering, they mostly opt to handle it by themselves.

Supplier Relationships: If you have a strong, established relationship with your supplier and trust their handling of the goods, you may be more inclined to choose EXW. FOB can be a better option if you are less certain about the supplier's capabilities.

It is a widely used international shipping term. The ex-works price includes the value of all the materials used and all other costs related to its production, minus any internal taxes, which are, or may be, repaid when the product obtained is exported.

EXW and Delivered Duty Paid (DDP) are two Incoterms on opposite sides of the spectrum. Under DDP, the seller has the maximum obligation, while under EXW, the buyer has the maximum obligation. DDP requires the seller to deliver goods from the seller's warehouse to the buyer's final destination.

What does EXW stand for in Amazon? ›

EXW – Ex Works

Ex Works is a trade term that means the buyer of the manufactured products is responsible for the shipping process from the moment it leaves the factory to when it arrives at its destination. Responsibilities include transfer fees, shipping cost, insurance, customs, etc.

“Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller's premises or at another named place (i.e., works, factory, warehouse, etc.).

It is a widely used international shipping term. The ex-works price includes the value of all the materials used and all other costs related to its production, minus any internal taxes, which are, or may be, repaid when the product obtained is exported.

In an EXW shipment, the buyer is responsible for all transportation charges and must collect the goods from the seller. In a FOB shipment, the seller is responsible for exporting and paying the costs to load the cargo onto the vessel.

To buyers, the EXW agreement can also bring benefits. As the shipping costs and responsibilities are on the buyers' side, they can control the entire shipping process to ensure the products are safe. The shipping method is favorable to subsequent local transportation.