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Glossary · Shipping & trade terms

FOB

Free on board

An Incoterm for sea and inland-waterway shipping: the seller covers cost and risk until the goods are loaded on the vessel the buyer names. After that, they are the buyer’s.

Why it matters for a product launch

A factory's FOB price doesn't include ocean freight, insurance or import costs, so it is not your landed cost.

General definition for education only, not legal, tax or customs advice.

Related terms

  • Incoterms: Standard international trade terms, published by the International Chamber of Commerce, that set which costs, risks and tasks belong to the buyer and which to the seller. The current edition is Incoterms 2020.
  • EXW: An Incoterm where the seller makes the goods available at its own premises, and the buyer takes on almost all cost and risk from there.
  • DDP: An Incoterm where the seller arranges transport and export and import clearance, and pays duties and taxes, to the buyer's named destination.
  • Landed cost: The full per-unit cost of getting an imported product into your inventory: product cost plus freight, duties and tariffs, insurance, brokerage and fees.

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