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FOB origin Pricing Definition and Explanation PDF Download

Learn FOB origin Pricing definition in marketing with explanation to study “What is FOB-origin Pricing”. Study fob origin pricing explanation with marketing terms to review marketing course for online MBA programs.

FOB origin Pricing Definition:

  • A geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



FOB origin Pricing Explanation:

The transportation cost from the manufacturing plant or distribution center is paid by the buyer. Responsibility for merchandise is moved to the purchaser when it leaves the purpose of beginning. It tends to be either the purchaser or vender that organizes the transportation. Contracts including universal transportation regularly contain condensed exchange terms that depict matters, for example, the time and spot of conveyance, installment, when the danger of misfortune shifts from the vender to the purchaser, and who pays the expenses of cargo and protection. The most widely recognized universal exchange terms are Incoterms, which the International Chamber of Commerce (ICC) distributes, however firms that ship products in the United States should likewise hold fast to the Uniform Commercial Code (UCC). Since there is more than one lot of guidelines, the gatherings to an agreement should explicitly demonstrate which overseeing laws they utilized for a shipment.

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