what is fob price

FOB stands for "Free on Board" and is a shipment term that defines the point in the supply chain when a buyer or seller becomes liable for the goods being transported. The FOB price is the price of goods at the frontier of the exporting country or the price of a service provided to a non-resident. FOB pricing will always include a seaport where the seller agrees to export. Under FOB terms, the seller is responsible for the costs leading up to the goods being loaded onto the ship, and the purchaser is responsible for the costs involved in shipment once the goods have been delivered to the port and loaded onto the ship. FOB terms can impact inventory, shipping, and insurance costs, and it is essential for each party to have a firm understanding of FOB to ensure a smooth transfer of goods from the vendor to the client.