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