Free on Board (FOB):
In garment exporting, pricing of the garments mostly quoted on FOB. FOB
is defined as a term of sale under which the price invoiced or quoted
by an exporter manufacturer or a buying agency includes all charges up
to placing the goods on board a ship at the port of departure specified
by the buyer. It is also called as collect freight, freight collect, or freight forward. FOB is also abbreviated as freight on board.
Cost, Insurance, and Freight (CIF):
In many supplying countries pricing is prepared based on CIF. CIF is a
shorthand term for signifying that the price invoiced or quoted by an
exporter includes insurance and all other charges up to the named port
of destination.
Cut, make and Trim (CMT):
In the apparel
industry the buyer needs to assure the quality of raw materials. Textile
fabrics of the quality or nature demanded by the buyers may not be
available in the sourcing country and raw materials may be required to
import. In many instances, the buyer takes on the task of purchasing and
shipping the raw materials for the apparel production facility. Buyer
only pays a fee to the factory for sewing, trimming, and manufacturing
the final goods which is named as CMT. The finished goods are then
shipped to the buyer.
Secondly when a larger manufacturer uses
production capacity of the subcontractors and job workers,
subcontractors are paid for CMT only.
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