Free on board (FOB),
Definition of Free on board (FOB):
Including or assuming delivery without charge to the buyers named destination.
Used in shipping to indicate that there is no charge to the buyer for goods placed on board a carrier at the point of shipment. Typically followed by the name of a port or city, e.g., F.O.B. San Francisco. See also ex works.
Free On Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. "FOB shipping point" or "FOB origin" means the buyer is at risk and takes ownership of goods once the seller ships the product.
For accounting purposes, the supplier should record a sale at the point of departure from its shipping dock. "FOB origin" means the purchaser pays the shipping cost from the factory or warehouse and gains ownership of the goods as soon as it leaves its point of origin. "FOB destination" means the seller retains the risk of loss until the goods reach the buyer.
Term of sale under which the price invoiced or quoted by a seller includes all charges up to placing the goods on board a ship at the port of departure specified by the buyer. Also called collect freight, freight collect, or freight forward.
How to use Free on board (FOB) in a sentence?
- Ms. Watson had never encountered the free on board terminology prior to placing her first order for personal massagers on AliExpress.
- I note that the explanatory note of the bill quotes figures of $2 per kilo, free on board, in 1999, and that has declined in 2 years to $1.53.
- I thought it was worth it to order the goods from a Chinese company, but when I saw that the price was not free on board , I realized that ordering from a different company would actually be more cost effective.
- FOB contracts have become more sophisticated in response to the increasing complexities of international shipping.
- The terms of FOB affect the buyer's inventory cost; adding liability for shipped goods increases inventory costs and reduces net income.
- The only way the oversees manufacturing contract would work is if shipping was free on board . The company could not make money without free shipping.
- Free On Board is a term used to indicate who is liable for goods damaged or destroyed during shipping.
Meaning of Free on board (FOB) & Free on board (FOB) Definition