Who pays for shipping when businesses sell to eachother?

FOB destination is the common designation in US industry for a contract that includes the price of the freight. The receiver will not be getting any freight bill, the freight charges are covered by the shipper/seller. The seller will invoice the receiver for the price of goods only, (yes, the cost of of freight is built into the total cost).

FOB source (or origin) is used to denote a contract where either the seller will invoice the receiver for the goods and also show freight as a separate line item on the billing, or the seller will invoice the receiver for the goods only and the shipping company will invoice the receiver with separate bill for the freight. Or the receiver will arrange the pick up of the goods separate from any other agreement with the shipper.



This isn’t true in any meaningful way. It’s a cost you negotiated away. You could just as easily say that if you negotiate for a 5% advertising coop fee you’re not really saving 5% because that discount was implicitly imbedded in the price of the goods. There’s a number of things that go into the real cost and it’s true the seller accounts for freight charges and advertising allowances when agreeing to their price for the goods, but it’s all just a negotiation for both sides. It’s pretty myopic to think only the buyer pays shipping.

I worked as an asst controller in hotels and I can say as others have, it’s all negotiable. The more you buy and the bigger you company the better deal you get. I worked in systems in Starwood Hotels which is huge and Dell Computers gave us super good deals. They were unbelievable.

When I left and went to a hotel company that only owned three hotels, Dell wouldn’t give me anything I coudn’t have gotten as regular customer. I did find a deal because our local Best Buy gave me a good discount for directing all three hotels business to them.

So everything is negotiable. The more you are buying the better deal you get