This means that if in some circumstance, the product is damaged.
In this situation, the billing staff must be aware of the new delivery terms, so that it does not bill freight to the customer. There are only certain products where FOB can apply.
Free on board is a trade term that indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. FOB destination, freight prepaid and added. When a sale is made, accountants must record revenues for the merchandiser and manufacturer.
All these differ based on who will pay for the shipping and who will take care of the logistics of the delivery. It allows the buyer to wait for their products without the hassle of thinking about the logistics of its shipping and it allows the seller to get paid even before the item leaves their hands.
The seller gets paid right away.
Bloemen Alle shipped the flowers on 21 October FOB destination, freight collect. Also, under FOB destination terms, the seller is responsible for the cost of shipping the product.