Incoterms (International Commercial Terms) are a set of standardized trade rules published by the International Chamber of Commerce (ICC) that define who is responsible for shipping, insurance, export and import duties, and the point at which risk passes from seller to buyer in a cross-border sale. Each term is a three-letter code, such as EXW, FOB, or DDP, followed by a named place. Naming the right Incoterm on a quote removes ambiguity about who pays for what and who bears the loss if goods are damaged in transit.
How it works
Every Incoterm assigns duties along the shipping journey. At one extreme, EXW (Ex Works) puts almost everything on the buyer: they collect the goods from the seller’s premises and handle all transport, export clearance, and import duties. At the other, DDP (Delivered Duty Paid) makes the seller responsible for delivering to the buyer’s door with all duties and taxes paid. Common middle-ground terms include FOB (Free On Board) and CIF (Cost, Insurance and Freight) for sea freight, and DAP (Delivered At Place). The ICC updates the rules periodically, with Incoterms 2020 being the current version.
Why it matters for B2B quotes
International buyers need to know their landed cost, not just the unit price. A quote that says “USD 12,000, DAP Rotterdam” tells the buyer exactly what is and is not included, so there are no surprise freight or customs bills later. Leaving the term off invites disputes and stalled deals.
On Shopify
Shopify checkout does not have a dedicated Incoterms field, so B2B sellers usually state the term in the quote line items, notes, or terms section before converting it to an order. If you build quotes in ShopQuotes, you can spell out the agreed Incoterm on the Live Quote page so it carries through to the draft order the buyer accepts and pays for. See the B2B quoting glossary for related terms like landed cost and net terms.