FOB Terms

FOB destination, charges reversed

•indicates that the buyer pays the shipping charges but the seller assumes responsibility for the goods while they are in transit.

FOB shipping point

•indicates that the manufacturer has title to the goods and will pay shipping costs until the merchandise reaches a distribution point. From that point, the buyer takes title tot eh goods and pays transportation charges until they reach the store.

FOB destination, freight prepaid

•indicates that the seller will pay the freight charges but the buyer takes title to the goods as soon as they are shipped.

FOB origin (factory)

•the most commonly used terms under which merchandise is shipped. Title passes to the buyer when the seller delivers goods to the transportation carrier. Transportation charges as well as other expenses ad risks are the responsibility of the buyer

FOB destination (store)

•the term that indicates that the manufacturer pays the shipping charges, and title passes to the buyer when the merchandise is delivered to the retail store. For a buyer, FOB destination terms are ideal.