First of all let us understand that what is mean by FOB Shipping Point. It shows that sale occurred at shipping point—it means that sale occur at seller’s shipping dock.

FOB Destination shows that sale will be occur when goods arrives at destination point—at buyer’s receiving dock point.

FOB Shipping Point and FOB Destination Point can be negotiated between merchandiser and manufacturer It is decided between the buyer and seller by their mutual understanding or negation

If I am merchandiser, then I will prefer FOB Destination because in the FOB Destination generally seller is responsible for transporting all goods until goods reached at buyer’s unloading destination or dock. (here seller records transportation cost as the Freight-Out, Delivery Expense or Transportation-Out, ) So purchaser or merchandiser is risk free until goods reached at buyer’s unloading destination or dock

If I am manufacturer, then I will prefer FOB Shipping Point because in FOB Shipping Point then buyer is taking responsibility of cost of the transporting goods. (here buyer records cost as Transportation-In. or Freight-In ) So manufacturer is risk after goods loaded in the ship and afterwards buyer take all the responsibility for goods reached at buyer’s unloading destination

benefit to the manufacturer and merchandiser if they absorbed the cost of shipping:

If the manufacturer has absorbed the cost of shipping then price what he charged to the buyer will cover all the expanses and price turn out will be the correct price with a profit margin