Clear inputs. Transparent calculations.
Compare target seller prices when the buyer or seller bears destination import costs.
Price and margin formula
Target sale price = seller costs ÷ (1 − target gross margin − selling fee rate). In the DAP scenario, seller costs exclude buyer-borne import duty and tax. In the DDP scenario, those costs are included when the seller will actually pay them.
Incoterms matter
DDP and DAP describe different allocation of import obligations under Incoterms 2020. Check the sales contract, local importer-of-record rules, and the latest ICC Incoterms guidance before quoting delivered prices.
See the methodology, full tool directory, and usage disclaimer. These are scenario estimates, not binding commercial or customs quotations.
Guide updated: November 14, 2026. These examples explain the inputs and important limits; they do not establish product-specific tariff rates.
DDP versus DAP: who handles the import?
Under DAP, the seller normally arranges carriage to the named destination and places the goods at the buyer’s disposal ready for unloading. The buyer generally takes responsibility for import clearance, duty, and local taxes. Under DDP, the seller assumes the destination import clearance and duty obligations, making it more convenient for a buyer but operationally more demanding for the seller.
These are Incoterms 2020 trade rules, not automatic proof of who can legally act as importer of record. Some destinations impose registration, customs representation, or tax requirements that a foreign seller cannot meet without additional arrangements. The named place in the sales contract and the actual service purchased from the carrier both matter.
How the selling-price calculation works
The calculator uses an illustrative contribution-margin pricing equation: required selling price equals seller-borne fixed costs divided by one minus the target margin minus the selling-fee percentage. For example, if costs are $52, fees take 3% of sales, and the target margin is 30%, the DAP price is $52 ÷ 0.67, approximately $77.61. A higher shipping cost or percentage fee increases the target price.
When a DDP shipment adds $7 duty, $4 seller-borne tax, and $3 customs brokerage, fixed seller costs rise from $52 to $66. With the same 30% margin and 3% sales fee, the DDP target becomes about $98.51. The difference is $20.90, not simply the $14 in added costs, because the seller also needs to preserve the target margin and absorb fees on a higher selling price.
Taxes, recoverable VAT, and checkout pricing
A VAT-registered importer may be entitled to recover some import VAT, depending on the jurisdiction, goods, records, and use of the goods. Treating reclaimable VAT as a permanent expense can inflate a retail quote. Conversely, omitting non-recoverable import tax, platform fees, duties, or returns can make a DDP offer unprofitable.
The form asks for tax that the seller actually bears as a cost. Separately consider the sales tax or VAT collected from a customer at checkout. That amount may be a liability to remit rather than revenue retained by the seller. Avoid charging the same tax in two places.
Build a DDP quote from the bottom up
Start with your purchase cost and payment terms. Add collection and international delivery from the supplier, plus insurance if needed. Obtain a realistic destination import-duty estimate for the correct tariff number and country of origin. Include brokerage, entry or disbursement fees, duties, unrecoverable taxes, and final delivery to the named place.
Then calculate payment processing, marketplace referral fees, return allowance, warranty risk, and your intended commercial margin. Run a lower-margin scenario if you sell in a competitive market. The current calculator includes fixed costs and one percentage fee; it does not automatically model returns, advertising, marketplace storage, or income taxes.
A practical buyer-experience comparison
DAP can be useful where the buyer is experienced with customs paperwork or where the seller cannot act as importer of record. It can also surprise consumers with requests to pay customs charges before the final delivery. DDP can make checkout pricing more predictable for international buyers if the seller has reliable duty calculation and compliant customs arrangements.
For an e-commerce store, communicate the delivery terms before collecting payment. State whether import duties and destination taxes are included, what happens if customs holds a parcel, and who pays for returns or re-importation. A carrier’s branding alone does not confirm an all-inclusive DDP price.
Frequently asked questions
Is DDP always better than DAP for an online store?
Not always. DDP often gives consumers more predictable delivery charges, but it adds compliance responsibilities and cost risk for the seller. DAP may suit established business importers.
Does DAP mean the seller pays no shipping?
No. The seller generally arranges transport to the named destination under DAP. The buyer normally handles import clearance, duties, and related taxes.
Can I deduct import VAT from DDP costs?
Only where the importer is genuinely entitled to recover it and the accounting treatment is appropriate. Confirm this with a tax adviser.
Is a 30% margin the same as a 30% markup?
No. Margin is profit divided by selling price. Markup is profit divided by cost. The equation here targets margin, not markup.
What happens if the duty rate changes after checkout?
Depending on the contract and shipment timing, the seller may bear an unexpected DDP expense. Review tariff validity dates, contingency margins, and supplier or carrier terms.