In brief
An Incoterm is the delivery term used in international trade: it sets where responsibility for shipping, insurance and customs passes between buyer and seller. As MarbleMap describes it, an Incoterm "sets where shipping, insurance and customs responsibility passes from seller to buyer".
The four most commonly used
- FOB — The seller delivers and loads the goods onto the ship; freight and insurance from there on are the buyer's.
- CIF — The seller also pays freight and insurance; delivery still happens at the ship, and risk stays with the seller up to that point.
- EXW — The buyer collects the goods from the seller's premises; all shipping and customs are the buyer's responsibility.
- DDP — The seller delivers to the buyer's door, duty paid; the lowest-risk option for the buyer.
The dropdown lists the full Incoterms® 2020 rule set; the four above are simply the most commonly used.
Where you use it as a buyer
The Advanced options step of the New Demand wizard (shown simply as Options in the step bar) contains the Accepted Incoterms field. You can select as many terms as you like there. As the interface explains: "Select which delivery terms (Incoterms 2020) you accept. It hints suppliers; it does not bind the offer." In other words, your selection guides suppliers rather than restricting them. This field is Pro-only; on the free package it appears locked.
Where you use it as a supplier
When you build an offer, you select a single term from the Incoterm field in the Terms & files step. This step is optional, but making a selection helps the buyer evaluate your offer correctly.
Why it matters
The same figure can mean an entirely different cost under a different Incoterm. When you compare the offers received for a General request (Basic), Incoterm appears as a separate row in the comparison table, alongside the total amount and the lead time. The comparison matrix of an Itemised product list (Detailed) demand has no separate Incoterm row; there you see an offer's Incoterm on its card in the offers list. When you assess offers, look not only at the amount but also at which delivery term that amount covers.
On a rejected offer
While the demand is still open, changing the Incoterm on a rejected offer counts as the "material term change" that opens the door to a new offer. Changes to lead time, payment, validity and offer scope are treated as material in the same way. The Difference check section of the Submit New Offer screen has a dedicated Incoterm changed row for exactly this: "At least a 1% price improvement over the rejected offer OR a material term (incoterm/payment/validity) must change."