What is fob definition?

Fob stands for "Free on Board" or "Freight on Board." It is a term used in international trade to define a shipping agreement between the buyer and seller. Fob definition specifies the point at which the seller's responsibility ends and the buyer's responsibility begins.

FOB is used to determine the transfer of ownership of goods and responsibility for the goods during the shipping process. For example, if a company ships a product FOB from the factory, it is responsible for the product until it is transferred onto a carrier. Once the product is on the carrier, responsibility for the product shifts to the buyer.

FOB can also refer to the price of a product, where FOB price includes the cost of the product and the cost of transport to the point of delivery.

Overall, FOB definition plays an important role in international trading, determining the responsibilities of both the seller and buyer in the shipping process.