Sourcing Glossary
Essential terminology for China sourcing and international trade. Master these terms to communicate effectively with suppliers.
A
AQL (Acceptable Quality Level)
A statistical measurement of the maximum acceptable number of defective units in a sample.
C
CIF (Cost, Insurance, Freight)
A shipping term where the seller pays for cost, insurance, and freight to the destination port.
CBM (Cubic Meter)
A unit of measurement for shipping volume, calculated as length × width × height in meters.
E
EXW (Ex Works)
A shipping term where the buyer is responsible for all costs from the seller's location.
F
FOB (Free On Board)
A shipping term indicating the seller is responsible for goods until they are loaded onto the shipping vessel.
H
HS Code (Harmonized System Code)
An international standardized system of names and numbers to classify traded products.
I
Incoterms
International commercial terms that define the responsibilities of buyers and sellers in international trade.
L
L/C (Letter of Credit)
A bank guarantee that ensures payment to the seller once shipping documents are provided.
M
MOQ (Minimum Order Quantity)
The smallest number of units a supplier will sell in a single order.
O
OEM (Original Equipment Manufacturer)
A company that manufactures products to be sold under another company's brand.
ODM (Original Design Manufacturer)
A company that designs and manufactures products that are then branded by another company.
Q
QC (Quality Control)
The process of ensuring products meet specified quality standards before shipment.
R
RFI (Request for Information)
A preliminary inquiry sent to suppliers to gather general information about their capabilities.
RFQ (Request for Quotation)
A formal request sent to suppliers asking for pricing on specific products or services.
T
T/T (Telegraphic Transfer)
A direct bank-to-bank wire transfer commonly used in international trade.