Free on board (FOB) is a shipping term in international trade that defines when ownership and responsibility for goods transfer from the seller to the buyer.
FOB has two main variations:
FOB shipping point (FOB origin): Ownership transfers when goods are shipped.
FOB destination: Ownership transfers when goods arrive at the buyer’s location.
These terms are important in contracts because they decide who pays for shipping, insurance, and risk at each delivery stage.
FOB origin means the buyer takes ownership of the goods as soon as they’re shipped from the seller’s location.
Seller’s responsibility: Prepare and load goods onto the transport vehicle at the origin point.
Buyer’s responsibility: Pay for shipping and insurance, and take on the risk once the goods are loaded.
FOB origin is common when buyers want more control over freight and arrange their own shipping.
FOB destination means the seller keeps ownership and responsibility for the goods until they reach the buyer’s location.
Seller’s responsibility: Covers all shipping costs, transport, and risk of loss or damage until delivery.
Buyer’s responsibility: Accepts delivery at the destination and takes control from that point forward.
This approach is often used when sellers want to guarantee delivery without the buyer handling freight.
In traditional international shipping, FOB terms manage freight responsibilities between suppliers and retailers.
But in ecommerce, especially Print on Demand, sellers avoid bulk freight altogether. Orders ship directly from the manufacturer to the customer, so you can run an online store without inventory or negotiating complex FOB shipping terms.
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