FOB stands for Free on Board and it is an Incoterm. Incoterm stands for International Commercial Terms. Terms in this context can be thought of as rules. When you ship goods around the world there are rules you must follow. Basically they define who pays for what - 'cause shippin' ain't free. :). See the infographic below and study it. You will see many options like EXW, FCA and FAS etc. Does the infographic make sense?

Hi, my name is Chris and I work with Thai Son sewing factory in Vietnam. Allow me to explain what does FOB mean in the context of the Vietnam apparel industry? I am a fashion start up consultant and I can help you find the right factory fast.


Apparel Manufacturing FOB Incoterms
Three common incoterms in the Vietnam apparel industry are FOB, CMT or LDP. When you negotiate a price with a Vietnamese sewing factory you will choose one of these three terms 99% percent of the time. I will explain CMT and LDP later.

When a garment factory quotes an FOB price, it means that the factory is only responsible up to the point that the goods are free on board. Remember to ask the question about which FOB port the factory will deliver to. For example, Thai Son S.P Sewing factory always quotes FOB-Ho Chi Minh City. It means that their price gets your goods to the HCMC port. After this port, you have to pay all the cost of transportation goods to your warehouse. Does that help explain, what does FOB mean?

An FOB price can also be thought of including everything from A to Z except shipping. A free on board garment price includes sourcing fabrics, trims, accessories, packaging and the cut and make component. The price is up to HCMC port- typically the nearest port to the factory. After that, your freight forwarding company will take over the shipping and you will pay the freight forwarder to get your goods from the Vietnam port to your warehouse. Do you know how to answer, what does FOB mean?
Vietnam Sewing Factories with Low MOQ
My name is Chris and I answer your questions about producing apparel in Vietnam based on my experience working here for 12 years. How can I help you?

Contact me for advice about producing in Vietnam.

I offer consulting and factory introductions. If you just want to read and learn I wrote a series of books explaining the basics like: sourcing fabric, controlling quality, getting price quotes and samples.

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CMT and LDP...

CMT stands for cut-make-trim (or thread.) "Cut make" refers to the process of making a garment. First you need to cut the fabric and then make it. Make it implies sewing the fabric together. Trims are components that stay on a garment when you wear it like buttons or care labels. Thread is the thread that is spooled on a sewing machine and used to seam two pieces of fabric together. CMT refers to a price component in the cost breakdown of a garment manufacturing price.

LDP stands for landed duty paid and it is an incoterm that implies that the price includes shipping plus paying of duties.

In conclusion, an FOB garment factory will give you only one price for all things included fabrics, trims, accessories, CM and profit but not shipping fee. They are responsible for getting the goods to their nearest port. Then the garment buyer has to pay any shipping cost after that.

Thai Son is a family owned FOB Sewing factory that has been manufacturing garment for more than 20 years. Their strength is men, women & children styles that use circular knitted fabrics and embellishments like embroidery, screen-printing, and applique. Firstly, we sew circular knit fabrics. Then we cut and make in our factory. Finally we get the goods to our nearest port, which is Ho Chi Minh City port. Do you know how to answer, what does FOB mean?

What does FOB mean? First of all, F.O.B. stands for Free On Board and indicates the point in the supply chain where the seller relinquishes ownership and the buyer accepts ownership of products purchased in a specific transaction. Every vendor / client relationship should have the FOB terms specified in their PO purchase terms.
Along with purchase terms, shipping terms are equally as critical. Identifying both terms will determine ownership, risk, and logistics cost.
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Thai Son S.P Co., Ltd.
153 Ung Van Khiem
Ward 25, Binh Thanh District
Ho Chi Minh City, Vietnam
Zip Code: 700000
Tel. +84 903926973
Attn: Ms. Sim
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