If you have requested quotes from Chinese suppliers, you have probably seen the term FOB. Here is what it means and why it matters.
1. What FOB stands for
FOB = Free On Board. It is an Incoterm that defines when responsibility for goods transfers from seller to buyer.
2. What FOB includes
Under FOB terms, the supplier is responsible for:
- Production of the goods
- Packaging
- Inland transport to the port in China
- Export customs clearance
- Loading onto the ship at the named port
3. What FOB does NOT include
- International freight
- Insurance
- Import duties and taxes
- Destination port charges
- Inland delivery in your country
4. FOB vs other terms
- EXW — buyer arranges everything from the factory gate
- FOB — seller arranges up to the ship
- CIF — seller arranges freight and insurance to your port
- DDP — seller arranges everything to your door
5. Why FOB is the most common quote
FOB is the standard in Chinese export trade because it clearly separates responsibilities. You control your own freight and insurance, which usually saves money compared to CIF or DDP.
6. How to calculate landed cost from FOB
Landed cost = FOB price + freight per unit + insurance + duties + destination fees
7. What to ask your supplier
- What is the FOB price for 1,000 pcs?
- Which port do you ship from?
- What is the carton size and gross weight?
- What is the lead time from deposit?
We quote in FOB Shenzhen or FOB any major Chinese port. Contact us for a full quotation on your target product.