FOB

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DozerMite

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Can anyone explain what FOB is?


From what I understand, it's a fancy way to say you are paying shipping.
I could be wrong and figured someone could set me straight.
 
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It means, literally, "free on board". Translated to ordinary English, it means that if someone sells you a product FOB their plant, you pay freight. On the other hand, if they sell it to you FOB delivered, they pay the freight.

In a past life I worked in the steel industry, where products were typically sold by the truckload, and FOB was an everyday term.
 
RogerH said:
It means, literally, "free on board". Translated to ordinary English, it means that if someone sells you a product FOB their plant, you pay freight. On the other hand, if they sell it to you FOB delivered, they pay the freight.

In a past life I worked in the steel industry, where products were typically sold by the truckload, and FOB was an everyday term.
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Thanks! That's how I understood it, but wanted to make sure.


Thanks for the links, but as I stated, I read that stuff and wanted clarification.
Better to ask than to think you have it right. I knew there was experience here to help.
 
If you are getting quotes that are FOB delivered, and they are coming from overseas, be careful to find out what method (air or sea) and remember they will NOT be paying customs and you may also have to pay customs agents fees.

Just a "heads up".
 
Thanks Ed!

From what I have read, UPS handles everything from the shipper to your door. They are customs brokers. Haven't got any quotes for overseas yet.

What does it matter if by air or sea? Cost?
 
I have sold some stuff that was FOB customs shed (or POE) also, we paid the freight to the customs inspection and in then the customer paid from, usually, CA to their location.

In that case it was FOB POE
 
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DozerMite said:
Thanks Ed!

From what I have read, UPS handles everything from the shipper to your door. They are customs brokers. Haven't got any quotes for overseas yet.

What does it matter if by air or sea? Cost?
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Time in transit. It can take several weeks or a month by ship. I learned that the hard way one time years ago.
 
UPS WILL charge an extra $25 "broker fee" to take it through customs.

And, yes--time and money! Sea is slow and less expensive (NOT cheap), Air is fast and MORE EXPENSIVE!!
 
What FOB also defines is point of OWNERSHIP should a legal dispute arises. It's not only about freight and who pays. Best example that comes to mind is who is responsible for payment if the freight carrying boat would sink in the ocean. I'm no lawyer but the term FOB establishes certain legal grounds.
 
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