Final answer:
Seller paying freight costs can be expressed as 'Free On Board (FOB) Destination', 'Seller Pays Freight', or 'Prepaid and Add', each indicating that the seller covers delivery charges to the buyer's location.
Step-by-step explanation:
When the seller pays the freight costs, it means that the seller bears the expense of having goods delivered to the buyer. This arrangement can be expressed in different terms that pertain to the shipping agreement between buyer and seller. Three different ways to express that the seller pays the freight costs are:
- Free On Board (FOB) Destination: The seller retains ownership and responsibility until the goods reach the buyer's location, paying the freight charges to get the goods there.
- Seller Pays Freight: This explicitly states in the contract that the freight costs are the responsibility of the seller, without relying on shipping terms jargon.
- Prepaid and Add: The seller pays for the shipping costs upfront and then charges the buyer separately for these costs, usually by adding them to the invoice for goods purchased.
Essentially, all of these terms mean that the cost incurred for the delivery of goods from Palmer Company in Bay Hill to Tiger Woods in Orlando is covered by the seller, not the buyer.