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In finance, FOB stands for Free on Board. It is a term used in global trade to indicate the point at which the ownership of goods transmissions from the seller to the buyer and who is responsible for the costs and risks associated with transporting the goods

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There Are Two Types Of FOB:

FOB Origin (or FOB Shipping Point) means that the buyer is accountable for all costs and risks related with transporting the goods from the seller’s location to the port of shipment. The seller is only responsible for piling the goods onto the shipping vessel.

FOB Destination means that the seller is answerable for all costs and risks of transporting the goods from the seller’s location to the buyer’s. The buyer is not responsible for any fees or risks until the goods have been delivered to their final destination.

The FOB term is important because it helps clarify the buyer and seller’s responsibilities and minimize any disputes that may arise during the shipping process.

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