When you buy cosmetics wholesale from abroad, the price of the goods is only part of the story. The rest (who pays the freight, who carries the risk if something goes missing, and who clears customs) is defined by the Incoterms. Getting them right is the difference between calculating your true purchase cost with confidence and getting an unwelcome surprise when the forwarder’s invoice lands.
After more than 15 years shipping premium beauty brands to professionals in over 40 countries, this is our practical guide to help any beauty buyer understand Incoterms without needing a degree in international trade.
What an Incoterm is (and isn’t)
Incoterms (International Commercial Terms) are a set of rules published by the International Chamber of Commerce that spell out, in three letters, how responsibilities are split between seller and buyer in a cross-border transaction. The version in force is Incoterms 2020.
An Incoterm answers three core questions:
- Freight: how far does the seller pay, and where does the buyer take over?
- Risk: at exactly what point does responsibility for the goods pass from one party to the other?
- Customs: who handles export clearance, and who handles import?
What an Incoterm does not cover is the price of the product, the payment terms, or the transfer of ownership. Think of it simply as the “map of responsibilities” for the shipment.
The most common Incoterms in cosmetics
Of the eleven Incoterms 2020, wholesale beauty trade relies mainly on four. The logic is easy: the further along the alphabet the term sits, the more the seller takes on and the less falls to the buyer.
- EXW (Ex Works): the seller makes the goods available at its own warehouse. From there, freight, risk and all customs (both export and import) are the buyer’s responsibility. Maximum control for the buyer, minimum involvement from the seller.
- FCA (Free Carrier): the seller hands over the goods, cleared for export, to the carrier nominated by the buyer. One step more convenient than EXW, and widely used in air freight and container shipments.
- DAP (Delivered at Place): the seller covers freight and risk to the agreed destination address. The buyer only handles import clearance and pays taxes and duties.
- DDP (Delivered Duty Paid): the seller delivers everything sorted, including import formalities and taxes. Maximum convenience for the buyer, but also the term that concentrates the most obligations and risk on the seller.
Who takes on freight, risk and customs
The clearest way to picture it is to follow the goods from the origin warehouse to your door. Under EXW, the buyer takes control from the very first metre; under DDP, only at the very end. FCA and DAP sit in between, sharing the effort more evenly.
| Incoterm | Main carriage | Export customs | Import customs | Risk passes to buyer |
|---|---|---|---|---|
| EXW | Buyer | Buyer | Buyer | At the origin warehouse |
| FCA | Buyer | Seller | Buyer | On handover to the carrier |
| DAP | Seller | Seller | Buyer | At destination, before unloading |
| DDP | Seller | Seller | Seller | At destination, all sorted |
Why EXW Spain is a wholesaler’s default
As a wholesale distributor, our default term is EXW Spain, and there are solid reasons for it. EXW gives the buyer full control over the supply chain: you choose your forwarder, negotiate your own freight rates (often better than a third party could get) and decide the route and timing. For a professional who imports regularly and already works with their own operators, EXW is usually the most economical and transparent option.
EXW also keeps the deal clean and comparable: the price you see is the price of the goods, with no logistics costs baked in to muddy the comparison between offers. See how we structure our service and logistics for each type of client.
When does DAP make sense? When the buyer would rather not deal with international freight and prefers the goods delivered to their warehouse, keeping only import clearance on their side. It’s a good fit for anyone without a trusted forwarder at origin, or who values convenience over fine control of the route. At Intenso we tailor the Incoterm to each client’s profile and country. Tell us about your case.
VAT, duties and customs clearance
This is where many first-time buyers miscalculate their cost. Importing cosmetics means budgeting, on top of the price and freight, for:
- Duties: these depend on the product’s tariff code and the destination country. Within the EU, movement of goods in free circulation carries no duty; outside the EU, it does.
- Import VAT: settled in the destination country at its local rate. In business-to-business intra-EU trade, the reverse-charge mechanism applies when you provide a valid intra-community VAT number.
- Customs clearance: the customs broker’s fees and documentary handling. Under EXW and DAP these fall to the buyer; under DDP, to the seller.
The key tip: calculate your landed cost by adding goods + freight + duties + VAT + clearance. Only then are you comparing like with like across different suppliers and Incoterms.
Practical tips for international buyers
- Have your tax paperwork ready: an intra-community VAT number or importer registration, whichever applies in your country.
- Work with a trusted forwarder if you buy on EXW terms; their rate and reliability make a real difference to your margin.
- Confirm the Incoterm in writing on every order, along with the exact delivery point. The three letters should always be paired with a named place.
- Insure the goods for the leg where you carry the risk. Under EXW, that is effectively the whole journey.
- Ask for traceability and compliant documentation: in premium beauty, the right papers speed up customs and protect your investment.
In summary
| Incoterm | Best for | Who controls logistics |
|---|---|---|
| EXW | Buyers with their own forwarder | Buyer (maximum control) |
| FCA | Air freight or container shipments | Buyer, with export handled |
| DAP | Those who prefer convenience | Seller, up to destination |
| DDP | Those who want it all sorted | Seller (everything included) |
Choosing the right Incoterm matters as much as choosing the right supplier: it defines your true cost and your operational peace of mind. If you want to import premium cosmetics on clear terms tailored to your country, request access to our catalogue and we’ll prepare a bespoke proposal. And if you’d like to know who we are and how we work, get to know us on the about page.