What does FOB mean?

What does FOB mean?

What does FOB mean? 

First of all, F.O.B. stands for Free On Board, and it is an Incoterm. Incoterm stands for International Commercial Terms. FOB indicates the point in the supply chain where the seller relinquishes ownership, and the buyer accepts the owner of products purchased in a specific transaction. Every vendor/client relationship should have the FOB terms specified in their PO purchase terms.

See the infographic below and study it.

A FOB price can include everything from A to Z except shipping. A free onboard garment price includes sourcing fabrics, trims, accessories, packaging, and the cut and makes component. The price is up to HCMC port- typically the nearest port to the factory. After that, your freight forwarding company will take over the shipping, and you will pay the freight forwarder to get your goods from the Vietnam port to your warehouse.