Simple English definitions for legal terms
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Freight absorption: When a manufacturer pays for the cost of shipping their products to a reseller, instead of making the reseller pay for it. This is also called absorption.
Definition: Freight absorption is a sales method used by manufacturers where they pay for the reseller's freight costs before quoting a price. This is also known as absorption.
Examples:
These examples illustrate how freight absorption works in a business-to-business sales transaction. The manufacturer takes on the cost of shipping the products to the reseller, which can help the reseller save money and increase their profit margin. This can also help the manufacturer build a stronger relationship with the reseller and increase sales.