Delivered Duty Paid (DDP)
Delivered Duty Paid (DDP) is an international trade term where the seller takes full responsibility for delivering goods to the buyer's location after completing all import procedures. This includes paying duties, taxes, and handling customs clearance. It is the most seller-heavy Incoterm because the seller carries the maximum cost, risk, and administrative burden.
Key Points
The seller manages export clearance, international transport, import duties, taxes, and final delivery.
Goods are delivered to the buyer fully cleared for import, at the exact location agreed upon.
Risk transfers only when the shipment reaches the final delivery point.
Buyers do not need to manage customs, brokers, or local regulatory requirements.
Works well when the seller has strong global partners or operates in countries with predictable import systems.
Often adopted in cross-border e-commerce and high-value B2B shipments.
Benefits and Challenges
Benefits
The entire process is streamlined for the buyer, with no hidden or surprise costs.
Reduces documentation errors because the seller controls every stage.
Builds trust through an all-inclusive landed cost.
Ideal for buyers who lack import expertise or local brokerage support.
Challenges
Sellers must comply with foreign customs laws, which can be complex.
Import charges or regulations may change unexpectedly.
Some countries require the importer of record to be a local entity, creating complications.
Any customs delay directly affects the seller’s cost and delivery commitments.
Example Scenario
A technology manufacturer in Germany sells electronic components to a customer in Japan under DDP terms.
Step-by-step:
The German seller prepares export documents and ships the goods from Hamburg.
When the shipment arrives at Tokyo Port, the seller’s appointed customs broker in Japan completes import clearance and pays all duties and taxes.
After clearance, the seller arranges domestic transportation from Tokyo Port to the buyer’s facility in Osaka.
The shipment is delivered exactly to the buyer’s warehouse door, with no extra charges or paperwork required from the buyer.
The buyer receives a seamless, fully managed delivery experience.
Conclusion
Delivered Duty Paid provides the highest level of service and responsibility from the seller in international trade. It simplifies the buyer’s experience, reduces ambiguity, and ensures predictable landed costs. A clear understanding of DDP helps both parties avoid misunderstandings and plan supply chains efficiently.
Frequently Asked Questions (FAQs)
1. Who pays duties and taxes under DDP?
The seller pays all import duties, taxes, and customs-related fees.
2. Does the buyer have to handle customs?
No. The seller manages the entire import process.
3.When does risk pass to the buyer?
Only when the goods reach the final named destination, fully cleared.
4.Why do sellers hesitate to use DDP?
Because they must manage unfamiliar import laws, potentially high duties, and unpredictable costs.