EX-Works is the first Incoterm that comes to mind, when one thinks about it.
Being the only Incoterm in E category which is Departure – it serves the best for a seller. The seller has the minimum responsibility and cost in EX-works.
What is Ex-Works?
It is Ex-Warehouse. A shipping arrangement (An International Commercial Term) in which the seller presents the finished product at the designated location (Warehouse, factory, etc).
How does Ex-work (EX-W) works?
In Ex-Works, the buyer only has to safely pack the product and make it available in the required location. Even the cost of transport if any is taken care of by the buyer. Once the buyer has the goods, it is his/her responsibility to transport the goods and face the charges and risks.
Advantages of Ex-Works:
- It works best in domestic transports (Similar to a courier system). You drop the product in the courier station and they take care of the transport.
- It has the least amount of obligation and expenses for the seller. She only has to safely pack & get the products in the designated place.
- The cost of the product can be reduced from the seller side as she does not take care of transport.
Bottomline: Ex-Works is best for domestic transactions and for the benefit of the seller. The risk for the buyer is high, but she has control over the entire transport line.