During quotation, many Chinese makeup brush manufacturers do not exactly know the difference between EXW price and FOB price. Some believe that EXW price and FOB price is almost the same since they do not need to pay the shipping charge to customers.
The truth is there is big difference between these two terms. EXW means Exwork. If the price we quote is EXW price, that means our responsibility is just till production finished. Customers should take over everything ever since, including finding a forwarder in China to arrange the shipment to the port, paying custom related fees and shipping charge. The makeup brush manufacturers only need to ensure the brush production to be finished on time.
But if we quote FOB price, we should arrange everything till the goods leave our local port, so we need to contact customers’ forwarder for shipment arrangement, ship makeup brushes to our local port and handle with Chinese customs declaration, also pay all related cost. Therefore, comparing to EXW price, we will pay about ￥2000.0- ￥3000.0 more for FOB price.
Therefore, while quotation, it is best for makeup brush manufacturers to quote EXW price. if customers require FOB price, we should add at least ￥2000.0 to the total cost. If the shipping charge to the port is higher, the total cost will be higher relatively.
Some makeup brush suppliers may get loss as they do not clearly understand the difference between these two terms. For example, they just calculate the production cost to custom makeup brushes, so the brush price should be EXW price, but they quote to customers as FOB price. So, they have to afford the extra cost by themselves. Sometimes, the order profit may be lower than such extra cost, they actually do this business at a loss.
As a makeup brush factory for worldwide customers, we should be familiar with all international terms.
