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Question: Buy goods CIF and FOB, details how to buy, sell, price, which is more beneficial?
Answer: CIF price is the price at the importer's border gate (this price includes insurance cost, goods transportation to the importer's gate)
CIF stands for Cost, Insuance, Freight (freight, insurance, freight) as a condition of delivery at the port of destination: In international sales contracts it is usually written with a certain port name, for example : CIF Ho Chi Minh.
CIF price = FOB + F price (Freight) + I (insurance) + estimated interest
Under this condition, the seller delivers goods from the warehouse to the port, the customs procedures for the goods are exported and bears the cost of chartering and cargo insurance to the port of discharge.
However, under CIF terms, you should note that the risk of transferring from port to port rather than at port of destination. Sellers only buy marine insurance on behalf of buyers, then they certify insurance for buyers and export documents. And on the responsibility, the seller only pays the cost of buying the insurance, while the new buyer is the beneficiary and the person named on the insurance is the beneficiary. Thus, if losses occur on the way of transportation, the buyer must stand out to work with the insurance rather than the seller anymore. In addition, if there is a problem, the buyer must work with the local insurance.
The FOB price of Free On Board means that the seller delivers to the buyer via the railing at the port of departure
When the goods are on board, the seller is not responsible
Under FOB conditions, the seller only transports goods from his warehouse to the port and carries out customs procedures for export. As for the chartering, the comparison between the buyers is responsible.
Through the meaning of FOB and CIF prices, I think if we buy goods to benefit, it is better to apply FOB selling CIF, because with FOB price, all shipping costs are If a charterer is a buyer, we will bear it, but it will create conditions for the domestic transportation industry to take advantage and develop more.