Glossary
What is mDDP (modified Delivered Duty Paid)?
mDDP — "modified DDP" — is a supplier-invented shipping term, not an ICC Incoterm. The seller delivers to your door and pays freight and usually duty, but strips out obligations that real DDP includes: almost always import VAT or GST, and almost always a customs entry filed in your name.
mDDP is not an Incoterm
The ICC publishes eleven Incoterms. mDDP is not one of them. There is no ICC rule text for it, no defined point where risk passes, and no arbitration body that will tell you what it means. It is trade slang — "modified DDP" — invented by freight forwarders and Chinese suppliers selling into the Amazon FBA channel.
That matters the moment something goes wrong. Under CIF Rotterdam, Incoterms 2020 a court or arbitrator can look up exactly who owed what. Under mDDP to FBA ONT8 there is nothing to look up. Whatever the parties meant lives in a WeChat thread.
What suppliers actually mean by mDDP
In practice, an mDDP quote is DDP with one or more of the seller's obligations quietly removed:
| Obligation | True DDP | Typical mDDP |
|---|---|---|
| Ocean or air freight | Seller | Seller |
| Destination terminal + delivery | Seller | Seller |
| Import customs entry filed | Seller, in buyer's name or its own | Seller's broker, in someone else's name |
| Import duty | Seller | Seller (at a declared value the seller chooses) |
| Import VAT / GST / sales tax | Seller | Excluded — this is the usual "modification" |
| Importer of Record | Seller | A consolidator's licence, not yours |
| Entry paperwork given to buyer | Yes | Usually never |
The single most common modification is dropping import VAT out of the price. That is why an mDDP quote often looks 15-20 % cheaper than a real DDP quote for the same lane: it is not cheaper freight, it is a tax you have not been shown yet.
Why it shows up in Amazon FBA sourcing
Amazon will not act as Importer of Record. A parcel arriving at an FBA warehouse must already be cleared, duty paid, with someone else's name on the entry. A new seller in the US or EU frequently has no customs bond, no EORI number, and no broker relationship — so the supplier offers to solve all of it for a single per-carton price straight to ONT8 or LTN4.
That convenience is real. The exposure is also real, and it is asymmetric: the saving is a few hundred dollars, the liability is uncapped.
The compliance problem, concretely
1. You may not be the Importer of Record. The consolidator's broker files the entry under a licence that is not yours. You have no entry number, no 7501 (US) or import declaration (EU), and no proof of the customs value that was declared.
2. Undervaluation risk sits with you anyway. To make the price work, the declared value is often a fraction of what you paid. If customs audits, the party that benefited from the import is on the hook — and the invoice, the payment record and the inventory all point at you. The supplier is offshore and unreachable.
3. You cannot reclaim import VAT. In the EU and UK, input VAT is reclaimable only by the person named on the import document. If a consolidator cleared the goods, that reclaim is simply gone — often more than the entire "saving".
4. No paperwork means no defence. Section 321 / de minimis abuse, split shipments to stay under thresholds, and mis-declared HS codes all show up in mDDP consolidations. When the audit letter arrives years later, you have nothing to produce.
5. It breaks at scale. The moment volume grows enough to attract attention, the arrangement stops working — and you have no clearance history in your own name to fall back on.
How to price an mDDP quote properly
Never compare an mDDP number to a DDP number directly. Normalise it first:
- Take the mDDP per-unit price.
- Add destination VAT / GST on the true transaction value — 20 % UK, 19 % DE, 10 % JP / AU, 9 % SG. In the US, add state sales-tax exposure on resale only if applicable.
- Add the customs-broker fee you would pay to clear it yourself in your own name (roughly $100-250 per entry).
- Add a provision for reassessed duty on the correct declared value.
Worked example — 1,000 units, $6.00 FOB each, shipped to the UK:
- FOB goods: $6,000
- Freight and insurance: $1,150
- Duty at 4.2 % on $7,150: $300
- Import VAT at 20 % on $7,450: $1,490
- Broker fee: $180
- True DDP landed total: $9,120 → $9.12 per unit
An mDDP quote of "$7.60 delivered to FBA" looks $1.52 cheaper per unit. It is not. It is the same shipment with the $1,490 of VAT — and your entry paperwork — taken out.
When mDDP is defensible
Samples, a first trial order, or a single small shipment where you genuinely cannot yet clear goods yourself, and where you have written confirmation of the declared value. Treat it as a stopgap with an end date. Once you are ordering repeatedly, get an EORI or a customs bond, appoint your own broker, and buy FOB or CIF so you control the entry, the declared value and the VAT reclaim.
Run your own numbers in the landed cost calculator and compare against a standard DDP quote before you accept one.
Run the numbers on your own shipment
Enter your supplier price, carton size, freight rate and duty to see the landed cost per unit — and what the same order costs quoted FOB, CIF or DDP.
Preset starting value. Replace it with the rate from your destination's HS-code lookup (US: HTS, EU: TARIC, UK: HMRC).
Enter supplier cost and freight in USD. Results are converted to your display currency at the static reference rate shown below.
Rate used: 1 USD = 1 USD (reference table, 2026-09-01). Static snapshot — confirm the live rate with your bank before committing to a purchase order.
Suggested retail (per unit)
Same shipment, three Incoterms. The total you end up paying barely moves; what changes is how much sits on the supplier’s invoice and how much lands on you later as freight, duty and tax.
| Incoterm | Supplier invoices you | You still pay | Total landed | Per unit |
|---|---|---|---|---|
| FOBGoods on board at origin port. You arrange and pay freight, insurance, duty, tax and clearance. | $390.00 | $212.51 | $602.51 | $120.50 |
| CIFGoods, freight and insurance to destination port. Duty, tax and clearance are still yours. | $425.37 | $177.14 | $602.51 | $120.50 |
| DDPDelivered to your door, duty and tax paid by the supplier. Nothing left to pay on arrival. | $602.51 | $0.00 | $602.51 | $120.50 |
Import VAT / GST is usually reclaimable if you are registered — it is a cash-flow cost, not a margin cost.
Frequently asked questions
What does mDDP mean?
mDDP stands for modified Delivered Duty Paid. It is trade slang, not an official ICC Incoterm. A supplier quoting mDDP delivers to your door and pays freight and usually duty, but strips out one or more obligations that real DDP includes — most often import VAT or GST, and almost always the customs entry filed in your name.
Is mDDP an official Incoterm?
No. Incoterms 2020 contains eleven rules: EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR and CIF. mDDP is not among them, has no ICC rule text, and no defined point of risk transfer. If a dispute reaches arbitration there is nothing authoritative to interpret, so everything depends on what you wrote into the contract.
What is the difference between DDP and mDDP?
True DDP puts every cost and formality on the seller, including import VAT and an entry filed properly on the buyer's behalf. mDDP removes part of that. In most quotes the removed part is import VAT or GST, which is why mDDP prices look 15 to 20 percent cheaper. You still owe the tax; you just have not been shown it yet.
Why do Amazon FBA suppliers quote mDDP?
Amazon refuses to act as Importer of Record, so goods must arrive at an FBA warehouse already cleared with duty paid. Many new sellers have no customs bond, EORI number or broker, so the supplier offers a single per-carton price delivered straight to the fulfilment centre. The convenience is real, but so is the compliance exposure.
Is mDDP legal?
Buying on mDDP terms is not itself illegal, but the way it is usually executed creates real risk. Undervalued declarations, entries filed under a consolidator's licence rather than yours, and split shipments engineered to stay under de minimis thresholds are all customs offences. Enforcement follows the party that benefited from the import, which is you.
Can I reclaim import VAT on an mDDP shipment?
Usually not. In the EU and UK, input VAT is reclaimable only by the party named on the import declaration. If a consolidator's broker cleared the goods under its own details, you have no document to support a reclaim. For a VAT-registered business that lost reclaim often exceeds the entire apparent saving on the quote.
Who is the Importer of Record under mDDP?
Typically the supplier's freight consolidator or its customs broker, using a licence that is not yours. That means no entry number in your name, no 7501 or import declaration on file, and no evidence of the customs value declared. If customs later reassesses, you have nothing to produce in your own defence.
How should I compare an mDDP quote to a DDP quote?
Normalise the mDDP price first. Add destination VAT or GST on the true transaction value, add the broker fee you would pay to clear the goods yourself, and add a provision for duty reassessed on the correct declared value. Compare only after that. In most lanes the gap closes almost completely.
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