FOB

 Free on Board (FOB) is an Incoterm (international commercial term) that defines when the responsibility and ownership of goods transfer from the vendor to the buyer (in this case, Amazon). 

In the FOB model: 

• The vendor is responsible for:
  • Manufacturing and packaging the goods
  • Inland transportation to the port
  • Export customs clearance
  • Loading the goods onto the vessel
• Once the goods are on board the ship at the specified port, Amazon assumes:
  • Responsibility for ocean freight
  • Insurance
  • Import duties and inland delivery to fulfilment centers

This term is common in Direct Import agreements with Amazon Retail (1P), especially in global sourcing programs.
 

💡 Example: Under FOB Shanghai, the vendor pays to get the products to the port and loaded onto a container ship. From there, Amazon handles the rest of the journey to its US fulfilment center.

In short:
FOB means the vendor handles all costs and responsibilities up to loading the goods on the ship - after that, Amazon takes over.