Incoterms are a standardised set of international trade terms that define, precisely, where the seller's responsibility ends and the buyer's begins for cost, risk, and logistics. FOB — Free On Board — is one of the most common in the rug trade: it means the seller covers costs and risk up to the point the goods are loaded onto the shipping vessel at the port of origin, after which the buyer takes over.
Why it matters to a buyer
Other common terms include EXW (Ex Works, where the buyer takes responsibility from the factory door) and CIF (Cost, Insurance and Freight, where the seller arranges and pays for shipping and insurance to the destination port). Which term applies changes who arranges freight, who insures the goods in transit, and at what point ownership and risk legally transfer — it is worth confirming explicitly on every quotation rather than assuming.