What does "ex-works price" refer to?

The term "ex-works price" refers specifically to a pricing mechanism that indicates the cost of goods at the seller's premises, such as a factory or warehouse, before any transportation or shipping has occurred. Therefore, the price only accounts for the cost of the goods themselves, excluding any additional expenses related to transportation or logistics, such as freight costs or delivery charges.

In international trade, this pricing method essentially means that the buyer assumes responsibility for all costs and risks associated with transporting the goods from the seller's location onward. This places the obligation on the buyer to handle shipping arrangements and manage freight and delivery expenses. The clarity of this pricing structure is essential for both buyers and sellers to understand the true costs involved in the transaction.