FOB (Free On Board)
Supplier loads the vessel at the origin port; you own the goods from there.
Definition
FOB (Free On Board) is an Incoterm where your supplier delivers the goods, cleared for export, onto the vessel you arrange at the named origin port, and risk passes to you once they are loaded. From that point you pay and control ocean freight, insurance, import duties, and delivery, which is why FOB is the common baseline for FBA sellers sourcing overseas.
What FOB covers and what it leaves to you
Under FOB (ICC Incoterms 2020), your supplier gets the goods to the port, clears them for export, and loads the vessel. You take over from there: ocean freight, insurance, destination customs and duties, and delivery to FBA or your prep center. The catch most new importers miss is that risk passes the moment the goods are on board at origin, so if a container is lost or damaged on the water it is your insurance claim to file, not the supplier's.
Why FOB is the default for FBA sourcing
FOB hands you control of the freight leg (pick your forwarder, consolidate, route to FBA or a 3PL) and real visibility into shipping cost, while the supplier handles the messy origin-country export side. That balance, control without origin-country headaches, is why most China-sourced FBA freight is quoted FOB.
What FOB means for your landed cost
An FOB price is not your landed cost. Add freight, duties, and destination handling on top before you compare two suppliers: a $5.00 FOB unit plus $0.75 ocean freight, $0.40 duty, and $0.20 handling lands at $6.35, not $5.00. For China-sourced goods the duty line is the big swing, because Section 301 and newer tariffs can rival or exceed the freight, so a lower FOB price with a worse tariff position can easily cost more delivered.
FOB vs DDP: the short version
For most established sellers the answer is simple: ask your supplier for FOB and run the freight through a forwarder you trust. DDP, where the supplier delivers all the way in with duties paid, is simpler and a fine choice when you are new or shipping small, but at volume it usually costs more and hides the freight and duty breakdown. Choose DDP for simplicity, FOB for control and economics.
Related terms
Turn an FOB price into true landed cost
Inventory Hero layers freight, duty, and handling onto your FOB unit price, so you price SKUs and compare suppliers on real landed cost, not the factory quote.