Title: Analysis of the Core Differences between COD and DDP

Title: Analysis of the Core Differences between COD and DDP

COD (Cash on Delivery) and DDP (Delivered Duty Paid) are two distinct transaction models in cross – border trade, with differences manifested in multiple key aspects.

Core Differences:

• Risk 承担: In the COD model, the seller bears risks such as cargo damage, loss, and buyer rejection during transportation until the buyer pays upon delivery. In the DDP model, the seller not only assumes transportation risks but also takes responsibility for customs clearance in the importing country, paying duties, VAT, and other taxes until the goods are delivered to the buyer, with a wider risk scope.
• Customs Clearance Responsibility: COD usually requires the buyer to handle import customs clearance independently, while the seller only needs to transport the goods to the designated location. DDP requires the seller to complete the customs clearance procedures in the importing country, including preparing customs clearance documents and cooperating with customs inspections, imposing higher requirements on the seller’s customs clearance capabilities.
• Funds Recovery: In COD, the seller receives payment only after the buyer signs for the goods and makes the payment, and the funds recovery cycle depends on the buyer’s payment time. In the DDP model, the seller can receive payment before or at a specified time after delivery according to the contract, with relatively more guaranteed funds recovery.

Precautions:

• Key Points for COD: When choosing COD, it is necessary to assess the credit environment and payment habits of the buyer’s country or region, and avoid conducting business in areas with an imperfect credit system. At the same time, clarify the handling methods and cost – bearing for buyer rejection, such as return freight and storage fees.
• Key Points for DDP: Sellers need to fully understand the customs policies, tariff rates, VAT calculation methods, etc., of the importing country, and conduct cost accounting in advance. During customs clearance, ensure that the customs clearance documents are accurate and complete to avoid delays or additional costs due to document issues.