Quoting customer FOB

[Cma87]

I have a simple question.

My existing customer would like me to quote them FOB. I have prices for several items in dollars.

Since I am quoting FOB, do I just apply my mark up and then that is the price to give to my customer?

Many thanks in advance.

 

[Maple Sourcing]

You need to find a UK local forwarder to quote you sea shipping cost + customs clearance + local delivery to your premises. Then, you will be able to get know the final landed price. You can apply your mark up on top of the landed price.

 

[Cma87]

You need to find a UK local forwarder to quote you sea shipping cost + customs clearance + local delivery to your premises. Then, you will be able to get know the final landed price. You can apply your mark up on top of the landed price.

Thanks for your reply.

In this scenario the customer is taking care of shipments as they are already an importer. I don’t need a forwarder.

They just want me to quote them F.O.B. Shanghai.

So I assume I just take my dollar cost and apply my mark up and then they take care of the documents (I can use a switch bill) and shipping from port to their warehouse.

 

[Mike Foulds]

Hi there.

For the above, you are offering goods under FOB, which stands for Freight On Board.

As per the Incoterms (https://sunburylogistics.co.uk/wp-content/uploads/2020/01/SWL-incoterms-2020.pdf), FOB means that you will be liable for the cost of getting the goods to the port, handling in the port, export customs clearance and loading on board. Your customer would then be liable for freight and any charges at destination including delivery to their warehouse.

I therefore suggest you need to take your cost in dollars, add your markup, and then add on the costs a freight forwarder would charge for collecting from your factory, charges in the port, etc.

If you speak to a forwarder and mention that you are being asked to quote the cargo to your customer on an FOB basis, they should be able to help (They will need to know the weight and volume of the cargo once packed).

Hope this helps.

 

[CHUKTC]

As said above add on the costs of packaging and getting the goods to Shanghai port. If the items are from different sources remember to allow for consolidating those. You need to consider is it a full container or part load and allow costs accordingly. You also need to pay China port costs and customs clearance costs in China.

After that add on your own costs and profit then you have the price to quote them.

Also remember if you are paying for the goods in rmb but receiving payment in dollars to allow for currency fluctuations - they are very volatile at the moment.