What Is The "F.O.B. Price"?

The "auction price" means the cost of the car at auction. So what does "F.O.B price" mean? Learn about this important terminology and how understanding what it means can help you bid more effectively (and with less stress) in Japan's car auctions.

F.O.B. Literally Means "Free On Board"

The term F.O.B. literally means Free On Board and is a term from the shipping industry. The technical definition is that the seller pays for transportation of the goods to the port of shipment, plus loading costs, and then the buyer is responsible for the marine freight and insurance.

Or, to put it more simply, the seller takes care of everything up until the cargo gets on the ship, and everything after that point is the buyer's responsibility.

They have developed a team and implemented a system that is leaving a profound mark on the industry. They are sending a clear message to their competitors: Treat your trading partners with honesty, respect, and most importantly Integrity.

Auto trade globally tends to be associated with swindlers and scam artists. We searched a good month before we chose Integrity as our trade partner. Our long, tedious search was well worth the endeavor. Most of our purchases have been near flawless and any issues have been handled professionally and expeditiously.

- Chris Curtis of Nippon Classic Imports Ltd. (USA)

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How does this apply to buying cars from Integrity Exports?

When you buy vehicles from Integrity Exports, we don't just handle the purchasing at auction. We also make all of the arrangements on the Japan side to export your car. This includes the transportation from the auction to the port, getting the documentation from the seller, processing the paperwork to deregister the car legally, booking shipping, and arranging the Japan-side customs clearance.

You don't need to make any arrangements for transporting the car in Japan, or booking shipping yourself. We handle everything within Japan. You just pick out the cars you want to bid on, confirm your bids after checking the auction inspection report translation, and then meet them when they arrive at your end. (Oh, and don't forget to pay!)

So what is the F.O.B price and what does it cover?

The F.O.B. price covers the cost of the car itself and everything that needs to be done in Japan as far as getting it onto the ship ready to leave. The cost of doing this is called the F.O.B. price. This F.O.B. price is calculated as follows. It is made up of four parts:

The cost of the vehicle at auction.
How much it costs to get it from there to the port -- the internal transport cost.
The Japan-side customs charge.
Our commission.

Well, this is the basic calculation. However, for some countries, such as Kenya or Uganda, you may need extra certification, which would be an additional fifth factor making up the final FOB price.

Anyway, for most customers in most countries, you have these four factors that are added together to make the final FOB price.

And we won't go into details about how our commission charges work here because you can find a more detailed explanation with examples here.

How the F.O.B price makes bidding easier for you

Of course, you can enter your bid as bare auction price of the car if you want. But here's another way to bid which many Japan car auction buyers find easier -- enter your bid as a maximum FOB price.

What does that mean? Well, instead of telling us how high you want to go as an auction price, you are telling us the most you want to pay for the car and all of the Japan-side work in total.

In other words, you don't need to be wondering how much you could end up paying for the FOB price, as we do the figuring out for you. We calculate back from your maximum FOB price to get to your maximum auction price. It's so much easier for you!

All you have to do is to make sure you either enter it as an FOB price bid, or tell us in a comment when you have seen the auction report translation and you are confirming your bid.

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