What is FOB destination and FOB shipping point?

What is FOB destination and FOB shipping point?

“FOB shipping point” or “FOB origin” means the buyer is at risk once the seller ships the product. The purchaser pays the shipping cost from the factory and is responsible if the goods are damaged while in transit. “FOB destination” means the seller retains the risk of loss until the goods reach the buyer.

Who pays the freight on FOB shipping point?

When it comes to the FOB shipping point option, the seller assumes the transport costs and fees until the goods reach the port of origin. Once the goods are on the ship, the buyer is financially responsible for all costs associated with transport as well as customs, taxes, and other fees.

What is an FOB point?

What is FOB is Shipping Point? FOB is a shipping term that stands for “free on board.” If a shipment is designated FOB (the seller’s location), then as soon as the shipment of goods leaves the seller’s warehouse, the seller records the sale as complete.

What is FOB with example?

Initially, the meaning of FOB was freight on board. It is still in use in many parts of the world. If the goods are shipped from New Jersey as “FOB New Jersey,” that will mean that the responsibility of the seller is to get the shipment to the boat in precise order.