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FREE ON BOARD

Free on Board (FOB) is when the responsibility for shipping goods is transferred from the seller to the buyer. The advantage for the buyer, who arranges and pays for shipping, is that they can get a better deal than the seller may be offering and have the goods delivered to their preferred “shipping point” (destination) – this can lower the total cost of the purchase. The advantage for the seller is that once the shipment leaves their premises, they are no longer responsible even if it is lost or damaged en route.