How does FOB affect a business transaction?

Question

I’m learning about FOB meaning in business transactions. How does the FOB arrangement affect shipping costs, ownership, and responsibility between buyers and sellers?

Jackup · Answer

FOB (free on board) indicates who will pay for transportation and at what point the risk or title passes to the other party. When using FOB origin, it is common for the buyer to take responsibility from the moment the goods leave the seller.

Harper · Answer

FOB (free on board) is an acronym that tells us who is responsible for paying the transportation costs and when the risk passes to the other party. In the case of FOB origin, the purchaser usually takes possession after the merchandise leaves the supplier’s hands.

Answers