"FOB" - seller's location = Serious Red Flag

[Grumps]

FOB, or free on board, is a legal term that you should be on the lookout for when making a deal for an imported instrument. In the old days, if set forth FOB buyer's location, basically the risk of loss passed to the buyer once the ship arrived at the buyer's location and passed over the rail of the ship. However, should a dealer sell an item as FOB seller's location, that means once the item leaves their shop, the buyer assumes all risk of loss. This is a serious red flag should a seller offer to ship you an item purchased from them in this manner. If they can prove it left their shop, as soon as the item passes out their door the buyer assumes all risk of loss. As most reputable shops are going to be concerned with buyers' satisfaction and will provide service after the sale, you'd have to ask yourself why a dealer would go out of their way to use legal language you might not be aware of to preclude your rights of return/satisfaction once they have your money and the item leaves their shop. A very telling sign indeed.

[milandro]

true, but a lot of goods (probably the majority) are sold FOB or as a even less service oriented " ex-works or EXW " and the sellers are perfectly bona-fide......as proved by countless transactions (and I am not talking saxophones here but several types of products mostly in the food industry) that I have been assisting or I have been a party to.


If, for whatever reason, you don't trust this formula........you can ask to buy CIF (cost insurance and freight ) or DDU (delivery duty unpaid) or DDP (delivery duty paid) the last two will guarantee responsibility of any risk until you receive anything..........according to the countries involved you may also have statutory rights anyway

[Canadiain]

Vitually everything we buy as a business is FOB, its in effect a default setting. I dont think it means anything about a sellers reliability in itself, there is a good chance they have not even thought about it.

It is worth questioning though if you see it. The reality is that the shipper is the one with the insurance obligation should anything go wrong, rather than the seller, and the buyer is paying for that themselves in addition to the cost of the goods in most cases. Its another thing to agree in advance of any decision to purchase though.

[milandro]

Vitually everything we buy as a business is FOB, its in effect a default setting. I dont think it means anything about a sellers reliability in itself, there is a good chance they have not even thought about it.

It is worth questioning though if you see it. The reality is that the shipper is the one with the insurance obligation should anything go wrong, rather than the seller, and the buyer is paying for that themselves in addition to the cost of the goods in most cases. Its another thing to agree in advance of any decision to purchase though.

exactly! I have done business for many years and most prices are by default quoted as FOB that doesn't mean that the seller accepts no responsibility for all sorts of things but, should the shipment be lost at sea or being stolen on the way, maybe, problems could arise but there is a line of insurance companies and responsibility one mile long and most problems are resolved amicably. In any Industry where I have been involved it has never been a problem.

[Grumps]

Vitually everything we buy as a business is FOB, its in effect a default setting. I dont think it means anything about a sellers reliability in itself, there is a good chance they have not even thought about it.
Trust me... in the case I saw recently, I'm very sure the dealer thought about it. In fact, other terms of service include a 50% deposit paid at time of ordering with the balance due by the proposed delivery date; whether or not the horn has actually been imported to the seller by said date. That alone should give one pause, but to add FOB seller's destination to the terms of the sale? Come on now... that's a set up to take your money and give you no recourse once the item has left the seller's shop.

Sure this is fine for purchases between businesses who insure such transactions as a cost of doing business, but for musical instrument sales from a business to a consumer? Generally, as a private citizen, when you order a product from a business (not counting Ebay here) are you supposed to insure the item for damages while it's on its way? Heck no. I'm sure you wouldn't feel the seller met their obligation until the item arrived safely at your door, and you would have every right to expect same. Just think about those catalog companies and how the good ones strive to make things right, up to, during and after the sale. FOB-seller's destination for such sales to consumers, again, is a serious red flag.

[Canadiain]

I think most people buying mail order would recognise shiping and handling as charges quite seperate to the cost of the item, and largely outside the sellers control, and would expect to pay different amounts depending on the level of shipping and the options therein, next day, economy, and insurance. What they choose would depend on there personal risk tolerance and requirements. I suspect many sellers would make insurance at the buyers expense a mandatory part of doing business though?

In terms of the deposits etc, isnt that normal for a bought to order type sale? I would not expect to be able to buy something made to order like a Borg Bari, or exotic metal yani without paying a hefty deposit and cash up front for it...but I would baulk at paying the balance by a set date regardless of whether there was a horn to show for it at that point!

I dont see that its the sellers responsibility once its shipped from their store, they have no control over what the boys in brown do to it, so why would they stick their neck out for them? At least they are making that clear up front so you know to budget for insurance on it, or else to go pick it up in person.

[Grumps]

I think most people buying mail order would recognise shiping and handling as charges quite seperate to the cost of the item, and largely outside the sellrers control, and would sexpect to pay different ammounts depending on the level of shipping and the options therein, next day, economy, and insurance. What they choose would depend on there personal risk tollerance and requirements. I suspect many sellers would make insurance at the buyers expense a mandatory part of doing business though?
Generally, businesses, as opposed to consumers, are seen as having the deeper pockets, so the law weighs more heavily upon them so far as bearing the risk of loss when selling goods to consumers. Not sure where you're going with this otherwise, as I've already made the distinction between such sales between businesses as opposed to sales from a business to a consumer. For the latter, and for reasons already stated, it's a red flag.

As for deposits, generally there's nothing suspect about that for imported and/or specially ordered goods, but read what I said again more carefully. By the terms of the sale I used as an example, the full amount would be due by the proposed date of receiving the shipment, whether or not it's actually arrived in port. I'm not talking about paying the balance when the item is delivered to the buyer, but the date the seller thinks it's going to arrive from overseas to their shop; again, whether it does so or not. These are all just terms that heavily favor the interests of the seller, and I'm trying to tune folks in accordingly.

[Canadiain]

Generally, businesses, as opposed to consumers, are seen as having the deeper pockets, so the law weighs more heavily upon them so far as bearing the risk of loss when selling to consumers. Not sure where you're going with this otherwise, as I've already made the distinction between such sales between businesses as opposed to one from a business to a consumer. For the latter, and for reasons already stated, it's a red flag. Okay?

As for deposits, generally there's nothing suspect about that for imported and/or specially ordered goods, but read what I said again more carefully. By the terms of the sale I used as an example, the full amount would be due by the proposed date of receiving the shipment, whether or not it's actually arrived. These are all just terms that heavily favor the interests of the seller, and I'm trying to tune folks in accordingly. Got it?
If you look again, Im not disagreeing at all about the payment in full by abitrary date, that is cause for alarm. Payment before the final shipping would be fine with me, but not some arbitrary date when there might not be anything to ship.

As far as "FOB" alone as a red flag goes, I guess we will have to agree to disagree. In my view its mail order if I'm shipping it, and mail order has generally always involved seperate S&H charges over and above the item cost. Insurance is on the buyer to take up as shipping incidents are outside the sellers control.

[Grumps]

As for "FOB" as a red flag goes, I guess we will have to agree to disagree. Inmy view mail order has always involved seperate S&H charges, and insurance is on the buyer to take up as shipping incidents are outside the sellers control.
For the sale of goods from an established business to a private consumer? I'm sorry, but your view isn't quite the law, nor what goes for established sales practices between established businesses and private consumers. Remember, we're not talking Ebay here, although many established businesses use it. Ebay was set up for private sales between individuals/consumers, so insurance is made an issue for risk of loss accordingly. Also remember the distinction between FOB seller's location and the FOB buyer's location. You might have them confused from your past experience in dealing with FOB issues. But I'd imagine if this weren't such a red flag, other businesses would ship FOB seller's location to consumers. You don't see that much, now do you? Perhaps why we have the Uniform Commercial Code... and perhaps why you might see such things in the one state that hasn't adopted it quite yet.

[Canadiain]

For the sale of goods from an established business to a private consumer? Also remember the distinction between FOB seller's location and the FOB buyer's location. You might have them confused from your past experience in dealing with FOB issues. But I'd imagine if this weren't such a red flag, other businesses would ship FOB seller's location to consumers. You don't see that much, now do you? Perhaps why we have the Uniform Commercial Code... and perhaps why you might see such things in the one state that hasn't adopted it quite yet.

Well, Im not in the states so I dont know, but its seems logical to me that if I was selling a one off made to order piece I would be happy to take reponsibility for it right up to the point the shipper takes responsibility for it, at my door, just as if a customer had come to the store to collect it.

If the customer expects me then to ship it, then I would do so however the customer asked, as long as they pay for it and for my time to arrange that.

If the customer picked it up in person then wrecks his car and the horn on the way home, you wouldnt expect the store to cover that, so why would you expect the store to cover courier damage if the buyer didnt pay for insurance?

Anyway, as I said, we obviouly see this differently, and I dont have your legal advantage, so what do I know. FOB just seems the norm to me, and is a normal part of "buyer beware" when it comes to shipping and insurance.

[Grumps]

If the customer picked it up in person then wrecks his car and the horn on the way home, you wouldnt expect the store to cover that, so why would you expect the store to cover courier damage if the buyer didnt pay for insurance?
As for the car wreck, it occured after delivery, so the point is moot. But prior to delivery, in person or by courier, because the business is a dealer in goods, it is assumed to have the deeper pockets and legally bears certain risks of loss when selling to consumers. Unless of course they declare something like FOB seller's location... which in this case someone did... which you must admit, most folks don't get... so I'm trying to help them understand same despite your confusion of the issue. And again, don't confuse the duties of a dealer in goods with Ebay insurance issues. Do you see insurance offered in sales catalogs outside of Ebay? No, because they know they bear the risk of loss and have their own insurance accordingly. That is why FOB seller's destination is something folks ought to pay attention to, despite your acceptance of same.

I'll make it clearer for you though, or for those reading that still care. If we went by Canadiain's method of purchasing consumer goods from catalogs, and we didn't receive the item, or it was damaged in shipment, we'd be on our own with no recourse from the seller if shipped FOB seller's destination. Period. Nothing. Unless we paid for our own private insurance for delivery of the item. Is that really how things are done? No... so quit arguing, eh?

[Canadiain]

No... so quit arguing, eh?

Takes two to argue;) Unless one happens to be a lawyer, then they can probably get by on their own maybe?

Living up here, I have to mail order quite often from the US, and anything that goes missing or is damaged has to be claimed from the shipping company more often than not, and as the buyer I choose the option that best suits me.

If a company has a catalogue, then it reasonable to say they are in the business of mail order, so getting the goods to your door in one piece might reasonably be part of the expectation of ordering from them.

I would say that is a slightly different situation to buying from an authorised importer for a brand and asking them to forward it on to you rather then have to go to the trouble to pick it up from their store.

[Grumps]

If a company has a catalogue, then it reasonable to say they are in the business of mail order, so getting the goods to your door in one piece might reasonably be part of the expectation of ordering from them.
And I would hope that someone with an online catalog that sells saxophones by mail order would fit within this catagory in your mind's eye. I never said we're talking about one offs either. We're talking about saxophones imported into the US by a dealer in the business, just like most other products sold these days. So as this is the case, and since FOB seller's destination would counter your reasonable expectations, do you still not think it's a red flag for such language to be included in sales between an established business and a private individual?

[Canadiain]

As I said before several times (and as Milandro said too), No I dont think its a red flag at all taken in isolation.

They are simply making it clear that once the item is in the hands of the courier that they are no longer directly responsible for it. That seems perfectly reasonable and normal to me, Its just one way to run that side of a business, and as long as everyone is aware of where the responsibility lies then there is no issue with it. If the buyer is unclear about what FOB sellers location means, then they should ask.

Now, the business regarding payment in full by a set date regardless of when the horn is available to ship is another thing all together...to me thats much more of a red flag issue than the FOB thing.

Who are you talking about anyway, or are you not at liberty to dish names?

[Grumps]

As I said before several times (and as Milandro said too), No I dont think its a red flag at all taken in isolation.
No, Milandro was also considering transactions between businesses, as you were orginally; not with an established business and a private consumer. I doubt he'd still agree with you at this point, but that's certainly up to him. But FOB seller's location is always a red flag when set forth by a business that regularly sells goods to consumers as the consequences are poorly understood by laypersons, it runs contrary to established practices and puts an undue burdon upon consumers. You yourself said it would be part of your normal buyer beware, but that's because you've heard the term before. To others who may not be familiar... well fine, I'll take your buyer beware. Same thing, really.

As for where I've seen it recently, I'll give you a clue:
FOB New Orleans

[Canadiain]

As for who it is, I'll give you a clue:
FOB New Orleans

So lets take a big player as an example then...wwbw should be a good example I would think, are they not the largest mail order retailer of sax stuff? What do they say?


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That's FOB sellers location by any other name.:? Music 123s is (unsuprisingly) the same.

Kesslers require SHIPPING INSURANCE at the buyers expense. Wiener Music says nothing either way.

[Grumps]

Well there you go. You just made my point for me. WWBW didn't say FOB Indiana (or wherever they're located). They spelled out their policy in plain language. Read part of my criticism in using the term from the post above: the consequences are poorly understood by laypersons. At least WWBW makes it clear.

[Henry D]

AHHHHHHHHHH- but that would in and of itself represent a big improvement in the Southern Gentleman's modus operandi. Normally he pulls up short between the get the money and the ship something stages; this is a step in the right direction.......

[Canadiain]

Well there you go. You just made my point for me. WWBW didn't say FOB Indiana (or wherever they're located). They spelled out their policy in plain language. Read part of my criticism in using the term from the post above: the consequences are poorly understood by laypersons. At least WWBW makes it clear.

Eh? Your point was that no reputable retailer would operate on a FOB basis I thought:? Are you saying wwbw are as disreputable as that particular southern gentleman! There are (probably) many reasons to avoid doing business with Voldemort, but FOB shipping isnt really one of them.

Im all in favour of plain language, but as a buyer if you dont understand something, and dont have the sense to ask, then you probably shouldnt be dealing with strangers over the internet anyway...:twisted:

[Grumps]

Eh? Your point was that no reputable retailer would operate on a FOB basis I thought:?
My main point had always been in regard to using legally operative language that a layperson might not understand, as below from my initial post:

...you'd have to ask yourself why a dealer would go out of their way to use legal language you might not be aware of to preclude your rights of return/satisfaction once they have your money and the item leaves their shop...

[Canadiain]

SHIPPING: All instruments are shipped via Fed Ex Express, no exceptions. Accessories are generally shipped via USPS. The buyer pays all shipping and insurance costs. All merchandise is FOB New Orleans. We will not ship until shipping charges are prepaid in full. All shipping damage claims must be immediately reported to the carrier


Hardly latin is it now Grumps.

[Grumps]

Hardly latin is it now Grumps.
Nor is it as explicit as WWBW:

All items purchased from Woodwind & Brasswind are made pursuant to a shipment contract. This means that the risk of loss and title for such items passes to you upon our delivery to the carrier.

It still seems to dance around the risk of loss issue and might even lead one to assume that insurance is included in shipping charges. It might be... but I'd check on that first.

[milandro]

As Canadiain said in international trade almost anything is sold FOB and very occasionally someone asks things to be sold under a different formula . There is no question that there are ill intentioned traders out there and everyone who buys and sells has had to experience the occasional loss, but, by far and under every flag , most traders in the world are honest folks. For the private buyer buying with a credit card might offer some form of protection. In international business transactions many companies insure the goods they sell to their customers and only sell to customers which are vetted by their insurance.