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So, this morning my wife visits an antique shop across town looking for an end table that was advertised in a local flyer. The store didn't have the table but could have it sent from their other store in south Georgia. The sales lady tells my wife she can get it and quotes her a price FOB. My wife doesn't ask what FOB means and I can't get anyone to answer the phone over there across town to explain it to me. Does anyone know what FOB means? Thanks!
The usual meaning is "free on board" and delineates ownership by the buyer at the point the merchandise is turned over to the shipping/ trucking company and the buyer is responsible for shipping costs.
FOB (Free On Board) typically requires a suffix such as "Origin", "Shipping Point" or "Destination". As stated by cuse69 the term is pointing out "Who" is responsible for logistics-costs inclusive of unloading, shipping, loading, etc. The term originated dealing with Sea Freight that was not containerized. The question in this case, is what the "Sales Lady" was trying to point out. Would you be paying to get the item from South Georgia on top of the price Quoted?
Thanks to both of you for your insight. I finally got someone on the phone. Apparently, the shipping cost is separate and they are saying that any damage caused during shipment would not be their responsibility. In other words, if we receive a damaged table (they claim to inspect before shipping), we would need to take it up with the delivery service and could not reject the item. Is that reasonable?
The term "FOB" is usually followed by a location. For example, since my store is located in Alexandria VA all local quotes are done FOB Alexandria, VA. That means the furniture price is to the point of my store. If customer lives 45 miles away, there is a delivery change to go that 45 miles. For my distance customers, its FOB Factory Location. You pay the shipping from the factory loading dock to you. For a company such as Hancock and Moore, it would be FOB Taylorsville NC. So the price you get for a quote is to the loading dock at H&M and then shipping is extra - or you can pick it up yourself if so inclined.
As for Damages in transit, the way shipping works in any industry (and furniture is no exception), the shipper is responsible for all damages, not the merchant. And it makes sense if you think it through. Why would the seller of a product take the risk and a shipping service take none? Why would a shipper care how they handled the product if they were not financially responsible for it? The shipper HAS to be responsible for damages in transit so they develop a level of care and handling to get them to you in good condition. In the shipping industry, damages run about 3% overall, and bonuses for employees at year end all depend on the amount of damages through the year. There is a financial incentive for everyone handling your product to not beat it up, it comes out of their paycheck if they do. Having said that - any time you are moving large, heavy goods in a truck, things can and do happen. The good companies take care of damages, the bad ones find excuses not to. It's not hassle-free, but eventually it all works out for the most part.
There are certain assumptions made in the shipping business as well 1) The goods are in perfect condition when picked up unless noted otherwise on the bill of lading 2) The end user (that's you) always has rights of refusal and you should not accept damaged goods unless you are willing to live with whatever is imperfect on it.
Thanks for the lesson! I needed it. I was beginning to rethink this $109.99 end table!