Incoterms

Incoterms (International Commercial Terms) are a globally recognized set of rules published by the International Chamber of Commerce (ICC). They clarify who is responsible for the costs, risks, and logistics at each stage of a product’s journey - from the seller’s location to the buyer’s destination.

In Amazon’s global supply chain (especially with Direct Import vendors), Incoterms determine:

• Ownership transfer point
• Who handles freight and insurance
• Who pays customs duties and taxes
• Who books transport and delivery

Common Incoterms used by Amazon:

• FOB (Free on Board): Seller covers costs until goods are loaded on the vessel
• FCA (Free Carrier): Seller delivers goods to a named location (e.g., factory or port)
• DAP (Delivered at Place): Seller is responsible until goods are delivered to the destination
• DDP (Delivered Duty Paid): Seller covers all costs, including duties and taxes, to deliver to the buyer

Why Incoterms matter:

• Reduce confusion in international shipping
• Define clear legal boundaries between Amazon and its suppliers
• Impact cost structure, customs documentation, and delivery time

💡 Example: A vendor ships goods to Amazon US using FOB Shanghai - meaning the vendor handles costs up to port loading, and Amazon manages the rest.

In short:
Incoterms are globally accepted rules that define who is responsible for each step in the international shipping process - critical for Amazon’s Direct Import operations.