DDP (Delivered Duty Paid) shipping is an agreement that places the responsibility of paying any shipping costs, taxes, insurance and other charges with the sender of the items in question, rather than with the buyer. It’s a way for buyers to purchase products without worrying about unforeseen costs, and is especially useful for cross-border transactions.
That said, there’s nothing to say the sender can’t then pass this cost on to the buyer of the items anyway. If you’re able to predict this cost fairly accurately, you can collect this money (or a contribution) at the point of payment.
In this quick guide to DDP, we’ll walk you through the pros and cons of DDP shipping, the costs it covers and when liability transfers to the recipient of the items. We’ll also touch on DDP’s alternative: DDU shipping.
Why use DDP shipping?
Customers are reassured
The primary reason to use DDP shipping is to reassure buyers, and remove the uncertainty that comes with purchasing products from abroad. By choosing DDP shipping, you can reassure your customers that they won’t face any additional charges later down the line. Without DDP shipping, your customers may have to pick up their parcel at the post office and pay for it then, or they’ll be contacted later down the line with a bill for the relevant fees. DDP is considered a better customer experience, and also reduces the risk of the recipient requesting a refund, or refusing to pay the shipping charges later on.
Sellers are held accountable
Shipping to different parts of the world is complex. DDP places the responsibility of the shipping with the seller, meaning it’s their responsibility to ensure the items reach their destination, and they will take the proper steps to make sure this actually happens. It also lowers the risk of fraud.
Keep in mind though that, because the seller is paying for the shipping, they will typically choose slower options because they’re cheaper (and when you’re shipping something abroad, this can make it much slower). So that’s something to keep an eye on.
What possible costs does DDP cover?
DDP covers all duties for export and import of goods. Depending on which country you’re shipping from and to, this could include:
- Custom duties
- Taxes (VAT)
- Damage fees
- Shipping insurance
- Storage and demurrage
The buyer’s responsibility
The only possible cost the buyer can be responsible for with DDP shipping is receiving the goods. This is only an additional cost when the shipment is very large.
DDP vs DDU shipping
DDP stands for Delivered Duty Paid, and DDU stands for Delivered Duty Unpaid.
If something is sent DDU, the buyer of the goods is responsible for paying all taxes and duties associated with importing their goods into a country. Once the shipment has arrived in their country, they’ll be contacted by customs and asked to pay any relevant fees required to release their order.
DDP is generally considered to be a better shipping method than DDU because the customer doesn’t get any unexpected surprises down the line, and won’t have their parcel held up for long periods of time.
How we handle shipping at Creoate
Here at Creoate, all orders are sent with DDP shipping. However, our platform is able to predict these costs in advance, and the amount is charged upfront to those purchasing from our site, rather than the brands selling through our site.
Shipping is free through Creoate over £200 (or $350/EU varies). Otherwise, we charge a flat rate fee per supplier of UK (£8.99), Rest of Europe (€18.50) and USA ($29.99), subject to change. If you’re buying from an overseas brand, any extra costs will be calculated at checkout and show up under the label ‘DDP’. If you have any questions about this, don’t hesitate to get in touch with the team at email@example.com.
The supplier pays duty on DDP shipments. They’re responsible for all costs involved in delivering the item right up until the point it arrives at the buyer’s destination.
DAP (Delivered At Place) shipping is the same as DDU shipping; the buyer is responsible for all taxes and import duties associated with having their goods delivered to them.
Yes, DDP shipping takes goods from the seller’s door to the buyer’s door. Just remember the buyer is responsible for any unloading costs needed once the products reach them.
Yes, if you’re DDP shipping items into, out of or within the EU, you’ll need an EORI number.
The exporter of the goods is the ‘Importer of Record’ (IOR) and is therefore responsible for paying all taxes and duties associated with importing goods into the destination country.
✏️Check out other information you might need to know about shipping: 'What is an HS Code'
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