The DDP condition is one of the 11 conditions in the Incoterms 2010 system of delivery terms. So, what do we need to know about the DDP term? Let's find out with Giaiphapdonggoi.net!
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1. What is the DDP condition?
DDP stands for "Delivery Duty Paid" which is a delivery agreement whereby the seller assumes all responsibility, risks and costs associated with the carriage of the goods until the delivery of the goods. the buyer receives or delivers the goods to the agreed place. Under this agreement the seller must pay all shipping costs, import and export taxes, insurance and any other costs incurred in transit to the agreed destination in the buyer's country.
What is the DDP condition?
The risks to the seller are great and include VAT and storage costs if unexpected delays occur.
DDP benefits the buyer as the seller bears most of the responsibility and shipping costs.
2. Obligations of the DDP . condition
DDP is a shipping agreement that places maximum responsibility on the seller. In addition to shipping fees, the seller is also responsible for arranging import clearance, payment of import duties and taxes. The risk then passes to the buyer when the goods are delivered to the buyer at the port of destination. Buyer and seller must agree on most payment details and state the name of the destination before completing the transaction.
DDP was developed by the International Chamber of Commerce (ICC) seeking to standardize shipping globally. Therefore, DDP is commonly used in international shipping transactions. The benefit of DDP is in favor of the buyer as they will bear less responsibility and less costs during the shipping process so this places a lot of burden on the seller.
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3. Responsibilities of the seller and the buyer
Responsibilities of the seller and the buyer
For the seller
The seller arranges transportation through any form of transport and is responsible for paying the costs of that carrier and clearing customs in the buyer's country, including obtaining appropriate approval from the competent authorities in that country. In addition, the seller may need to obtain an import permit, but the seller is not responsible for unloading the goods.
The seller's responsibilities include providing the goods, making the sales contract and related documents, packing the goods for export, arranging for customs clearance, meeting all import and export requirements. import and customs and pay all transportation costs including final delivery to the agreed destination.
The seller must arrange proof of delivery and pay the costs of all inspections and must notify the buyer when the goods have been delivered to the agreed place. In a DDP transaction, the seller bears the costs if the goods are damaged or lost during transit.
For buyers
Payment according to the agreed contract.
Responsible for the goods when the goods have been delivered to the designated place.
4. Why is DDP used?
To protect buyers
DDP keeps buyers from being scammed. Since the seller bears all the risks and costs of shipping the product, it is in their best interest to make sure the customer actually gets what they ordered. The time and cost involved in shipping DDP is too much of a burden for scammers to even consider using it.
To ensure safe delivery across countries
A lot can happen when shipping packages halfway around the world. Each country has its own laws on transportation, import taxes and shipping charges. DDP makes merchants diligent to only send packages on the best and safest routes.
To ensure safe delivery by air or by sea
Depending on the type of product and where it is sold, safe delivery by air or by sea can be difficult. This ensures the seller doesn't take the money and run away.
Hold the seller responsible for international fees
If the buyer has to pay customs fees, it is likely that the sale will not happen because they do not know the cost of these fees. With merchants paying international fees, DDP allows for a smoother buying experience because buyers don't have to worry about paying fees.
5. Notes for sellers
While DDP is a popular choice for sellers, it comes with a hefty fee. To determine if DDP shipping is right for your business, calculate the fees you will have to pay and whether you will make a profit from your sales. Seller is responsible for all of these fees:
Transport fee
Shipping products by sea or by air can be expensive. You'll want to take the time to calculate the cost of shipping products internationally. Click here
