DDP vs DDU: Who Pays the Duties Decides the Delivery Experience

Every international order has a duty and tax bill attached, and the only real question is who pays it: you, or your customer at the door. That choice is the difference between DDP and DDU, and it shapes refusal rates, support volume and repeat purchase more than the carrier you pick.

What the terms mean

DDP, Delivered Duty Paid, means you, the seller, pay import duties and taxes. The customer pays exactly what they saw at checkout and the parcel arrives like a domestic delivery.

DDU, Delivered Duty Unpaid (the current Incoterm name is DAP), means the customer pays duties, taxes and the carrier's brokerage fee before the parcel is released. The carrier emails or knocks with a bill.

What the customer actually experiences

Under DDU the bill is not just duty. Carriers add a disbursement or brokerage fee for advancing the money, often $10 to $30 on a consumer parcel. A customer who paid $60 for a sweater gets asked for another $25 they never agreed to. Some pay it, annoyed. A meaningful share refuse, and a refused parcel means return freight, storage fees, and usually a refund on top: you can lose more than the order was worth.

Under DDP none of that happens. The tradeoff is that you carry the cost, so it has to be in your price or your shipping charge.

How to choose

• DTC consumer parcels: default to DDP. Buyers compare you to domestic stores. A surprise fee at the door reads as a scam, and refusals erase margins fast. This is the standard for serious cross-border DTC.
• B2B and wholesale: DDU/DAP is normal. Business buyers have importers, brokers and tax recovery; they often prefer to pay their own duties.
• Low-duty destinations: check the math first. Where your goods enter duty-free under a trade agreement, DDP costs you little more than DDU, and buys a clean delivery experience.

Whichever you choose, the number has to be known before the label is bought. That is a landed cost calculation: duty by HS code plus destination taxes plus fees. We cover the mechanics in Landed cost, explained, and how codes drive the rate in HS codes explained.

How Treqo handles it

In Treqo the incoterm is a per-destination setting: DDP into Canada, DAP for UK wholesale, whatever fits, configured once and applied to every shipment after. Duties and taxes are calculated per item at booking, so a DDP label already includes the real cost, not an estimate you discover on a carrier invoice weeks later. Treqo automates DDP and DDU duty billing, and the compliance page covers the rest of the paperwork, and the DTC page for how it fits a store workflow.

Frequently asked questions

Is DDU the same as DAP?

In practice, yes. DDU is the older term; the current Incoterm is DAP. The seller delivers, the buyer pays import duties and taxes.

Does DDP cost the seller more?

Per shipment, yes, you pay the duties. But you can price it in, and you avoid refusals, return freight and support tickets. For consumer parcels DDP is usually cheaper once refusals are counted.

Can I use DDP for some countries and DDU for others?

Yes, and most established brands do. In Treqo it is a per-destination setting applied automatically.