CMT, FOB, DDP — these terms appear in every factory conversation but are rarely explained clearly. Here is what each one means, what you take responsibility for, and which model suits your stage of business.
When you get a quote from a knitwear factory, it will typically be quoted on one of a few bases: CMT (Cut-Make-Trim), FOB (Free on Board), or DDP (Delivered Duty Paid). These are not just pricing terms — they define who is responsible for what at every stage of the supply chain. The right model depends on your experience, your logistics capability, your risk appetite and your business stage. This guide explains each model and helps you decide which fits your situation.
CMT is not an Incoterm — it is a production service model. The brand supplies the materials; the factory provides the labour and production.
Under CMT, you (the brand) are responsible for sourcing and delivering the yarn to the factory. The factory quotes a per-piece manufacturing fee (the CM part) that covers the knitting, linking, finishing and basic trims (the T — buttons, labels, basic thread). The factory does not source materials for you.
CMT is the model for brands that have existing relationships with specific yarn spinners, want to control the exact yarn source for brand or sustainability reasons, or want to develop yarn exclusives (e.g. a custom colour that isn't available from the factory's standard range). It requires you to manage yarn procurement, quality, quantity and delivery to the factory — adding supply chain complexity.
You know exactly what yarn is in the garment because you sourced it. For premium brands where fibre provenance is a brand asset ("ZQ-certified New Zealand merino" or "Italian-spun cashmere from Cariaggi"), supplying the yarn directly to a CMT factory is the only way to guarantee the supply chain claim. The factory manufactures; the brand controls the material.
You must source the right quantity of yarn (including wastage allowance — typically 10–15% for knitwear), arrange international shipping of yarn to Turkey, manage customs clearance of the yarn import, and absorb any overrun or underrun in yarn. Yarn sitting at the factory unused is your capital tied up. For a first-season brand, CMT adds meaningful complexity relative to the benefit.
FOB is an Incoterm (ICC Incoterms 2020). It means the factory is responsible for all costs and risks up to the point the goods are loaded onto the vessel at the named departure port.
FOB Mersin means the factory is responsible for: all manufacturing, yarn sourcing (unless CMT), packing, export customs clearance in Turkey, and delivery to the vessel at Mersin port. From the moment the goods are loaded, risk and cost pass to you: sea freight, marine insurance, UK import customs clearance (with EUR.1 for 0% duty), UK haulage, and delivery to your warehouse.
FOB is the most common basis for UK–Turkey knitwear transactions. It gives the brand control over freight arrangements (including choosing their own freight forwarder and marine insurer) while keeping the factory responsible for the production process through to the port. For a brand importing more than one container per year, FOB gives you control over logistics costs and carrier choice.
FOB has a clear, internationally understood responsibility split. Your freight forwarder handles everything from port to warehouse; the factory handles everything through to the port. You can shop for competitive freight rates, choose your preferred carrier for reliability, and manage the shipping timeline. You see the full landed cost (FOB + freight + duty + UK clearance) and can model this precisely.
FOB requires you to manage the import leg: appoint a freight forwarder, arrange marine insurance, instruct UK customs broker to claim FTA preference with EUR.1, arrange UK haulage. For a first-time importer, this is a learning curve. It is not complex, but it requires set-up. If you are doing your first shipment, get a freight forwarder referral from your factory or from another brand that sources from Turkey.
DDP is an Incoterm representing maximum factory/seller responsibility. The factory (or a logistics agent working on their behalf) delivers the goods to your named UK address, cleared through UK customs, all duties paid.
Under DDP, the seller is responsible for everything: manufacturing, all freight, all customs clearance (export in Turkey, import into UK), all UK import duties and VAT, and last-mile UK delivery. You receive a single price and a single shipment at your UK address. You have no freight, customs or logistics to manage.
DDP simplifies the import process to the maximum. For a very first order where logistics management is a barrier, DDP removes the complication. It is also sometimes used for sample shipments (though samples are typically shipped via DHL or equivalent on a door-to-door basis anyway). DDP is less commonly used for commercial production orders by established brands because of the disadvantages below.
Under DDP, the factory (or their agent) handles UK customs clearance. If they do not claim the UK–Türkiye FTA preference on your behalf (with the EUR.1 certificate), duty may be paid at the standard rate (~12%) and passed on to you in the DDP price. You may not be able to reclaim it. Under FOB, you control the import entry and ensure the FTA claim is made. Under DDP, verify explicitly that the DDP price includes 0% duty via FTA — otherwise you may be paying 12% duty hidden in a "duty paid" DDP price that didn't claim the FTA.
DDP gives you one price but no visibility into components. You don't know whether the freight cost quoted is competitive, whether the duty was correctly claimed, or whether there is a logistics markup in the DDP price. For an ongoing commercial relationship, FOB with your own freight forwarder gives you cost transparency and negotiating leverage that DDP does not.
| Factor | CMT | FOB | DDP |
|---|---|---|---|
| Yarn sourcing | Brand responsibility | Factory responsibility | Factory responsibility |
| Export clearance (Turkey) | Factory | Factory | Factory |
| Sea freight | Brand (via forwarder) | Brand (via forwarder) | Factory/seller |
| UK import customs | Brand | Brand | Factory/seller |
| FTA 0% duty claim | Brand controls | Brand controls (recommended) | Factory claims (verify) |
| UK haulage | Brand | Brand | Factory/seller |
| Logistics complexity for brand | High | Medium | Low |
| Cost transparency | High | High | Low |
| Best for | Experienced brands, special yarn | Most UK brands | First order, small shipment |
Start with FOB. Appoint a freight forwarder with Turkey experience (ask us for referrals if needed). The freight forwarder handles the sea freight and UK customs clearance — they will walk a first-time importer through the process including FTA duty claim. The FOB model is more transparent and gives you control of the import process from day one. The one-time setup cost of a freight forwarder relationship pays for itself immediately through correct duty claims and competitive freight rates.
Continue with FOB and consolidate your freight forwarder relationship. As volume grows, negotiate freight rates and consider FCL (full container load) once you reach approximately 3–4 CBM per shipment. Your customs broker relationship means consistent FTA claims and duty recovery on any errors. Cost transparency at FOB level supports margin management as the brand scales.
For a brand built on a specific yarn story — "we use ZQ-certified merino from New Zealand, spun in Biella" — CMT is the model that makes this verifiable. You source the yarn directly from the spinner, ship it to Turkey, and have it manufactured. This is operationally more demanding but gives you full supply chain control and the ability to market the yarn provenance credibly with documentation at every stage.
For very small shipments (trial orders of 25–50 pieces, or large sample sets), DDP may be simpler. Always ask: "Is this DDP price based on 0% duty via the UK–Türkiye FTA?" If the answer is no, you are paying 12% duty in the price. If the DDP price correctly applies FTA 0% duty, it may be competitive with FOB + forwarder fees for very small shipments where the per-unit freight forwarder cost is disproportionate.
We quote FOB Mersin as standard for UK clients. Our quotes itemise: FOB unit price, EUR.1 documentation (for FTA 0% duty claim), and indicative freight cost. We can recommend freight forwarders who work regularly with Turkish-origin garment shipments to UK ports. No hidden costs.
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