DDP meaning: Delivered Duty Paid explained, with risks and costs

What does DDP mean?

DDP stands for Delivered Duty Paid, an Incoterms 2020 rule under which the seller delivers the goods to a named place in your country, cleared for import, with all freight, duties and taxes already paid. It is the rule that puts the most work and the most risk on the seller. Incoterms are published by the International Chamber of Commerce (ICC) and work for any mode of transport: sea, air, rail, road or courier. You can read how the full set fits together in our Incoterms explained guide.

A DDP quote always names the destination, such as DDP Toronto warehouse or DDP Los Angeles, 123 Main Street. The goods are delivered when they are at your disposal on the arriving vehicle, ready to be unloaded. Unloading is on you.

Who pays what under DDP?

The key phrase is built into your price. The seller does not pay these costs out of generosity. Freight, duty, brokerage and delivery are added to the unit price, plus a margin for the supplier and its forwarder.

Where does risk pass under DDP?

Risk passes from seller to buyer at the named destination, when the goods are ready to be unloaded. Until then, loss or damage on the ship, at the port, in customs or on the truck is the seller's problem. Under FOB, by contrast, risk passes once the goods are on board the vessel in China.

DDP vs DAP: what is the difference?

DAP (Delivered at Place) is the sister rule. In both, the seller organizes and pays for transport to your named place and carries the risk until arrival. The only difference is import: under DDP the seller clears customs and pays duties and taxes, under DAP you do.

For a foreign seller, clearing goods in a country where it has no entity is hard. That is why many experienced importers prefer DAP: you keep control of the entry, the HS code and the declared value. Our view: if you plan to resell, you usually want your name on the customs entry.

DDP vs FOB: which is better when importing from China?

They sit at opposite ends. Under FOB the supplier stops at the ship in China and you handle everything after. Under DDP the supplier handles everything to your door. Neither is automatically better.

• FOB gives you control and clarity. You see freight, duty and fees as separate lines, you choose your forwarder and broker, and you hold the customs paperwork.
• DDP gives you convenience. One price, one invoice, no broker to find. That helps with first orders, samples and small parcels.
• FOB is easier to compare. Ask three suppliers for FOB quotes and you compare like with like. DDP quotes hide what each supplier assumed for duty and freight.

Read FOB vs EXW for the other common starting point, and our landed cost guide to turn any quote into a per-unit cost.

Why do Alibaba suppliers offer DDP shipping?

Many Chinese suppliers and forwarders sell door-to-door packages because buyers ask for them and because they make money on them. The usual reasons:

• Buyers want simplicity. New importers do not know what a customs broker or a bond is, and a DDP price looks easy.
• Forwarders have bulk rates. Consolidated shipments with a forwarder's own contracts and brokers can price the freight and clearance below what a small buyer would pay alone.
• It is a sales tool. A single all-in price hides the cost breakdown, so it is harder for you to compare against another supplier.
• Some forwarders take a shortcut. The cheapest packages sometimes declare a lower value than the real price. That is the risk covered next.

What are the hidden risks of DDP from China?

• Undervalued declarations. The duty is a percentage of the declared value. If an agent declares $1.50 for goods you paid $6.00 for, goods can be held, penalties can follow, and the paperwork does not match your purchase records. The importer of record is the legal party, but delays and seizures hit your stock and your selling dates.
• You may not be the importer of record. Customs benefits belong to the importer of record, such as refunds or exclusions. For example, the IEEPA tariffs were struck down in February 2026 and refunds go to importers of record, which under DDP is often not you.
• You cannot use your own broker or check the HS code. The agent picks the classification. A wrong one can mean wrong duty on later shipments.
• Unclear tariff changes. Duty rates move. If your DDP price is fixed and the tariff rises mid-order, the contract should say who absorbs it. Many suppliers add a surcharge or stop shipping.
• Hard to prove your cost basis. For income tax, resale and insurance claims you need an accurate invoice and entry summary.

Who pays the 2026 tariffs on China goods?

Whoever is the importer of record pays them at entry, and under DDP the seller then recovers that cost from you in the price. As of October 2026, US imports from China pay the normal duty for the HTS code plus Section 301 tariffs (7.5% or 25% on most goods, and a 12.5% Section 301 forced-labor tariff since July 24, 2026). The IEEPA tariffs were struck down by the Supreme Court on February 20, 2026. See our tariffs on China imports page for the current table.

Does de minimis still exist for small DDP parcels?

No. As of October 2026, the US has suspended the $800 de minimis exemption for all countries, so low-value shipments need a customs entry and pay duty. CBP's rule for postal shipments took effect on July 24, 2026. A DDP parcel now carries duty on a $20 item too, and a quote that says “duty free” for the US deserves a question. Check the Federal Register notice and CBP guidance listed under sources. Our shipping from China guide covers the US and Canada rules.

When does DDP make sense for a small seller?

• Samples and first small orders, where learning customs costs more than the order is worth.
• Air or courier shipments of a few boxes, where the courier acts as your clearing agent and you can see the duty on the invoice.
• You do not resell in bulk or need to document your cost basis in detail.
• The supplier or forwarder shows its work: declared value, HS code, duty amount and the importer of record, in writing.
• Switch to FOB or DAP once orders grow, you want your own broker, or the DDP price keeps changing.

DDP vs FOB: a worked cost example

This is an illustrative example, not a quote. Say you order 500 units that cost $6.20 each ($3,100 goods value, FOB Shenzhen) shipped to the US. Assume a stacked duty rate of 42.5% (5% normal duty + 25% Section 301 + 12.5% forced-labor tariff). Your actual rate depends on your HTS code.

Illustrative example. Real freight, fees and duty depend on your product, route and HTS code. Duty rounded to the nearest dollar.

The DDP quote looks cheaper by $138. But look closer: the goods alone cost $3,100, so the DDP price leaves $1,800 for freight, duty, brokerage, delivery and the forwarder's profit. The duty alone on the true value is about $1,318. That leaves roughly $480 for everything else, which is tight. One common way to make that math work is a lower declared value. Ask for the declared value and the duty amount in writing before you pay. Run your own numbers in the free landed cost calculator.

What does DDP mean in Chinese?

The formal term is 完税后交货 (wánshuì hòu jiāohuò), literally “delivery after duty paid”. In sourcing chats and forwarder offers you will mostly see the commercial wording below.

Frequently asked questions

Based on Incoterms 2020. Tariff and de minimis status is as of October 2026 and can change. Cost figures are illustrative examples, not quotes. This guide is general information, not legal or customs advice. SuanSupply is not affiliated with the International Chamber of Commerce or any customs authority.