What is a Basing Point?
A basing point is used in business to refer to a specific location used as a reference for pricing goods and services. This location may be the seller’s place of business, the buyer’s place of business, or a third-party location. In some cases, certain goods or services may be priced differently depending on the location of the buyer or seller.
Examples of Basing Point
1. Price FOB (Free on Board): A common form of basing point pricing, FOB stands for “Free on Board” and is used to indicate when the seller’s responsibility for a shipment of goods is complete. In this example, the buyer pays all shipping costs and assumes responsibility for the goods once they are loaded onto the delivery vessel. 2. Price CIF (Cost, Insurance, and Freight): Another common form of basing point pricing, CIF stands for “Cost, Insurance, and Freight” and works similarly to FOB pricing, with the main difference being that the seller pays all shipping costs and assumes responsibility for the goods until they are delivered. 3. Price Zoned: In zoned basing point pricing, the seller sets different prices for different geographic zones. Buyers in each zone pay the same price for the same goods, regardless of where the goods are being shipped from. 4. Price Delivered: In this form of basing point pricing, the seller is responsible for the cost of shipping the goods and the buyer is responsible for any additional costs associated with delivery.
Conclusion
Basing point pricing is an important factor to consider in any business transaction, as it can have a major influence on the cost of goods or services. Understanding which type of basing point pricing best suits your needs can save you time and money. For more information about basing point pricing, visit: