DDP means the seller bears all risks and costs associated with clearing and delivering the goods to the designated place.
The seller is liable for clearing the goods through customs in the buyer’s country. It includes payment of both duties and taxes. Furthermore, he needs to obtain the necessary authorisations and registrations from the authorities. However, the seller is not responsible for unloading.
This term places the maximum obligations on the seller and minimum obligations on the buyer. The buyer bears no risk or responsibility until the goods are at the final agreed place.
Hence, the term is favourable for online businesses seeking eCommerce financing for cross-border trading.
Unless the seller has a profound understanding of the rules and regulations in the buyer’s country, DDP terms can be a considerable risk both in terms of delays and in unforeseen extra costs. Hence, DDP should be used with caution.
