When a company imports goods from Europe, the purchase price is usually the first thing it looks at. However, the price shown on a supplier’s quotation does not always represent the final cost of getting the goods to Armenia.<\/p>\n
One of the most important factors affecting the total cost is the Incoterms rule<\/strong> agreed between the buyer and seller.<\/p>\n Incoterms are internationally recognized trade terms developed by the International Chamber of Commerce (ICC). They define how responsibilities, costs and risks are divided between the seller and buyer during the transportation of goods.<\/p>\n In simple terms, Incoterms help answer several important questions:<\/p>\n For companies importing from Europe to Armenia<\/strong>, choosing the right Incoterms can make a significant difference to the final landed cost of the goods.<\/p>\n In this guide, we will explain four commonly discussed terms\u2014EXW, FCA, FOB and DAP<\/strong>\u2014in simple language.<\/p>\n Incoterms are standardized international trade rules published by the International Chamber of Commerce.<\/p>\n They do not determine the price of the goods, the payment method or all contractual terms between the parties. Instead, they establish important responsibilities related to delivery, transportation, costs and risk.<\/p>\n For example, under EXW<\/strong>, the seller has relatively limited delivery responsibilities. Under DAP<\/strong>, the seller takes responsibility for arranging transportation to the agreed destination.<\/p>\n That difference can have a major impact on the total cost of an international shipment.<\/p>\n Under EXW (Ex Works)<\/strong>, the seller generally makes the goods available at its premises or another agreed location.<\/p>\n Imagine that your company purchases construction materials from Germany.<\/p>\n The supplier offers:<\/p>\n EXW Germany \u2013 Seller’s Warehouse<\/strong><\/p>\n This means that the goods are made available at the supplier’s warehouse. From that point, the buyer is responsible for arranging much of the logistics process.<\/p>\n Depending on the transaction structure, the buyer or its logistics provider may need to arrange pickup, export-related procedures, international transportation, insurance and import procedures in Armenia.<\/p>\n EXW can provide the buyer with a high level of control.<\/p>\n The buyer can choose:<\/p>\n For experienced importers with an established logistics network, this can be beneficial.<\/p>\n The main disadvantage is the level of responsibility placed on the buyer.<\/p>\n When buying from another country, handling export formalities in the seller’s country may create practical difficulties. The seller or a local logistics partner may be better positioned to manage those procedures.<\/p>\n For this reason, FCA can sometimes be more practical than EXW for international transactions<\/strong>.<\/p>\n FCA (Free Carrier)<\/strong> is often a practical option for international trade.<\/p>\n Under FCA, the seller delivers the goods to the carrier or another party nominated by the buyer at an agreed location.<\/p>\n For example:<\/p>\n FCA Milan, Italy<\/strong><\/p>\n or<\/p>\n FCA Seller’s Warehouse, Italy<\/strong><\/p>\n The exact place of delivery is important and should be clearly stated in the contract.<\/p>\n Suppose your company imports goods from Italy, Germany or Poland to Armenia.<\/p>\n With FCA, the seller can take responsibility for the export process and then hand the goods over to the carrier selected by the buyer.<\/p>\n The buyer can then work with its logistics provider to arrange transportation to Armenia.<\/p>\n This creates a useful balance: the seller handles important origin-side responsibilities, while the buyer retains control over international transportation.<\/p>\n For many European-to-Armenia shipments, FCA can be a practical middle ground between EXW and DAP.<\/p>\n FOB (Free On Board)<\/strong> is primarily intended for sea and inland waterway transport.<\/p>\n Under FOB, the seller is responsible for delivering the goods to the named port and loading them on board the vessel. After that point, the buyer takes responsibility according to the applicable FOB terms.<\/p>\n For example:<\/p>\n FOB Port of Hamburg<\/strong><\/p>\n The seller delivers and loads the goods on board at the specified port. The buyer then arranges the main sea transportation and subsequent logistics.<\/p>\n FOB should not automatically be used for every international shipment.<\/p>\n If goods are transported from Germany, Italy or another European country to Armenia by truck, FOB is generally not the appropriate Incoterms rule.<\/p>\n For road transportation, terms such as FCA, CPT, CIP or DAP<\/strong> may be more appropriate depending on the transaction.<\/p>\n The fact that FOB is widely known does not mean it should be used for every shipment.<\/p>\n Under DAP (Delivered at Place)<\/strong>, the seller arranges transportation and delivers the goods to the agreed destination.<\/p>\n For example:<\/p>\n DAP Yerevan, Armenia<\/strong><\/p>\n This means the seller organizes transportation to the agreed location in Yerevan.<\/p>\n However, DAP does not generally mean that the seller handles all import customs procedures and import taxes in Armenia.<\/p>\n Import clearance, duties and taxes generally remain the buyer’s responsibility.<\/p>\n DAP can be convenient for companies that do not want to arrange international transportation themselves.<\/p>\n For example, an Armenian company purchases goods from Italy and wants the supplier to arrange transportation to its warehouse or another agreed location.<\/p>\n DAP can simplify the process and make transportation costs easier to predict.<\/p>\n However, the buyer still needs to understand what is included and what is excluded from the supplier’s quotation.<\/p>\n The simplest comparison looks like this:<\/p>\n The table is only a starting point. The right choice depends on the product, shipment volume, route, transport method, supplier capabilities and the buyer’s logistics experience.<\/p>\n One of the most common mistakes when importing from Europe<\/strong> is comparing supplier prices without considering the delivery term.<\/p>\n For example:<\/p>\n Supplier A offers goods for \u20ac10,000 EXW.<\/p>\n Supplier B offers the same goods for \u20ac10,500 DAP.<\/p>\n At first glance, Supplier A appears cheaper.<\/p>\n But under EXW, the buyer may additionally need to pay for:<\/p>\n After all costs are added, the EXW offer may actually be more expensive.<\/p>\n This is why importers should compare the total landed cost<\/strong>, not simply the product price.<\/p>\n Another common misunderstanding is that DAP means the seller takes care of everything, including customs clearance in Armenia.<\/p>\n That is generally not the case.<\/p>\n Incoterms should be considered separately from customs and tax obligations.<\/p>\n When importing into Armenia, businesses may need to consider:<\/p>\n The correct Incoterms rule is therefore only one part of the overall import process.<\/p>\n Simply writing “FCA Italy” or “DAP Armenia” may not provide enough precision.<\/p>\n The agreement should identify the exact delivery point whenever possible.<\/p>\n For example:<\/p>\n DAP Yerevan, Armenia \u2013 Buyer’s Warehouse<\/strong><\/p>\n or another clearly agreed destination.<\/p>\n The same principle applies to FCA and FOB.<\/p>\n A clearly defined delivery point reduces misunderstandings about where costs and risks transfer.<\/p>\n A cheaper EXW quotation does not necessarily mean a lower final cost.<\/p>\n FOB is primarily designed for sea and inland waterway transport.<\/p>\n General terms such as “FCA Italy” may be insufficient. The exact place should be specified.<\/p>\n Transportation is only one part of the total cost. Customs duties, VAT, insurance, storage and other charges may also apply.<\/p>\n Before confirming the supplier’s quotation, make sure the selected Incoterms rule works with the actual transport route and logistics model.<\/p>\n A simple approach can help.<\/p>\n Step 1:<\/strong> Identify where the goods will be collected.<\/p>\n Step 2:<\/strong> Determine who will handle export formalities.<\/p>\n Step 3:<\/strong> Select the transportation method\u2014road, sea, air or consolidated cargo.<\/p>\n Step 4:<\/strong> Calculate the total logistics cost.<\/p>\n Step 5:<\/strong> Compare EXW, FCA and DAP offers based on the final landed cost.<\/p>\n Step 6:<\/strong> Clearly specify the Incoterms rule and exact delivery point in the contract.<\/p>\n EXW, FCA, FOB and DAP each serve a different purpose.<\/p>\n EXW<\/strong> gives the buyer significant responsibility from the seller’s location. FCA<\/strong> can provide a more balanced division of responsibilities and is often practical for international road shipments. FOB<\/strong> is primarily suitable for sea and inland waterway transportation. DAP<\/strong> can be convenient when the buyer wants the seller to arrange transportation to an agreed destination.<\/p>\n For businesses importing from Europe to Armenia<\/strong>, the most important question is not simply which Incoterms rule is “cheapest.”<\/p>\n The better question is:<\/p>\n Where do my costs, responsibilities and risks begin and end?<\/strong><\/p>\n Choosing the right Incoterms rule can help businesses forecast logistics costs, reduce unexpected expenses and calculate the true cost of imported goods more accurately.<\/p>\n For B2B importers, Incoterms should be considered as part of the entire supply chain\u2014from the supplier’s warehouse to the final destination in Armenia.<\/p>\n","protected":false},"excerpt":{"rendered":" When a company imports goods from Europe, the purchase price is usually the first thing it looks at. However, the price shown on a supplier’s quotation does not always represent the final cost of getting the goods to Armenia. One of the most important factors affecting the total cost is the Incoterms rule agreed between […]<\/p>\n","protected":false},"author":1,"featured_media":3578,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3577","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/posts\/3577"}],"collection":[{"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/comments?post=3577"}],"version-history":[{"count":1,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/posts\/3577\/revisions"}],"predecessor-version":[{"id":3581,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/posts\/3577\/revisions\/3581"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/media\/3578"}],"wp:attachment":[{"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/media?parent=3577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/categories?post=3577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clt.am\/en\/wp-json\/wp\/v2\/tags?post=3577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
What Are Incoterms?<\/h2>\n
EXW \u2013 Ex Works<\/h2>\n
Advantages of EXW<\/h3>\n
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Disadvantages of EXW<\/h3>\n
FCA \u2013 Free Carrier<\/h2>\n
Why FCA Can Be Useful for Imports from Europe<\/h3>\n
Main Advantages of FCA<\/h3>\n
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FOB \u2013 Free On Board<\/h2>\n
An Important Point About FOB<\/h3>\n
DAP \u2013 Delivered at Place<\/h2>\n
Advantages of DAP<\/h3>\n
EXW vs FCA vs FOB vs DAP<\/h2>\n
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\n Incoterms<\/th>\n Main transportation<\/th>\n Buyer’s responsibility<\/th>\n Typical use<\/th>\n<\/tr>\n \n EXW<\/td>\n Buyer<\/td>\n High<\/td>\n Experienced importers<\/td>\n<\/tr>\n \n FCA<\/td>\n Buyer after delivery to carrier<\/td>\n Medium\/High<\/td>\n International and road shipments<\/td>\n<\/tr>\n \n FOB<\/td>\n Buyer after loading on vessel<\/td>\n Medium\/High<\/td>\n Sea transport<\/td>\n<\/tr>\n \n DAP<\/td>\n Seller<\/td>\n Lower during main transport<\/td>\n Convenient door-to-destination logistics<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Do Not Compare Supplier Prices Without Considering Incoterms<\/h2>\n
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Incoterms and Customs Clearance<\/h2>\n
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Always Specify the Exact Place<\/h2>\n
5 Common Incoterms Mistakes<\/h2>\n
1. Choosing the term based only on the product price<\/h3>\n
2. Using FOB for road transportation<\/h3>\n
3. Failing to define the delivery location<\/h3>\n
4. Ignoring import-related costs<\/h3>\n
5. Choosing Incoterms without consulting your logistics provider<\/h3>\n
How to Choose the Right Incoterms for Imports from Europe<\/h2>\n
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