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What happens when merchandise is delivered FOB shipping point?

Understand the Problem

The question is asking about the implications and responsibilities that arise when merchandise is delivered under the terms of FOB (Free On Board) shipping point, which indicates that the buyer assumes responsibility for the goods once they are shipped.

Answer

The buyer assumes ownership and freight costs.

When merchandise is delivered FOB shipping point, the buyer assumes ownership and is responsible for freight costs as soon as the goods leave the seller's dock.

Answer for screen readers

When merchandise is delivered FOB shipping point, the buyer assumes ownership and is responsible for freight costs as soon as the goods leave the seller's dock.

More Information

FOB Shipping Point is a term indicating that the buyer of goods takes ownership and responsibility for the goods from the moment they leave the seller's dock.

Tips

A common mistake is confusing FOB shipping point with FOB destination. In FOB shipping point, the buyer takes responsibility once shipped, unlike FOB destination where the seller maintains responsibility until delivery.

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