What is Factory FOB Cost?

Factory FOB Cost, where FOB stands for “Free on Board,” refers to the cost of goods directly from the factory, including all expenses up to the point where the goods are loaded onto a shipping vessel at the departure port. This cost encompasses the price of manufacturing the goods and any other costs incurred by the seller until the goods are on board the vessel. Under the FOB terms, the seller is responsible for all charges and risks until the goods are loaded onto the ship, after which the buyer assumes responsibility for the freight and any further costs associated with the goods’ transportation.