Buyers generally believe that FOB agreements are cheaper and more cost-effective than CIF. This is because FOB agreements give buyers greater choice and control, allowing them to choose their own shippers and insurance limits. Such flexibility helps buyers optimize logistics processes according to their own needs, thereby reducing costs.

FOB and CIF are two common international trade terms. They have significant differences in the division of responsibilities, cost bearing and risk transfer between buyers and sellers.

FOB cost, or free on board cost, refers to the cost involved in delivering goods to the buyer's location at a specific pre-agreed location. These fees are paid by the seller and the customer then assumes responsibility for payment. FOB pricing applies to both international and domestic shipments.