China Sourcing Glossary
39+ terms and definitions used in China sourcing, importing, and international trade
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AQL
Acceptable Quality Level - Statistical sampling method used in quality inspections to determine if a batch meets quality standards.
Air Freight
Shipping goods by aircraft. Faster but more expensive than sea freight, typically used for urgent or high-value shipments.
Alibaba
World's largest B2B marketplace connecting international buyers with Chinese suppliers.
Bill of Lading (B/L)
Legal document issued by carrier acknowledging receipt of cargo for shipment. Essential for claiming goods at destination.
Bulk Order
Large quantity order typically following sample approval. Usually has lower per-unit cost than smaller orders.
CBM
Cubic Meter - Standard measurement for shipping volume. Calculated as length × width × height in meters.
CE Marking
Conformity marking required for products sold in the European Economic Area. Indicates compliance with EU safety standards.
CIF
Cost, Insurance, and Freight - Seller pays for goods, insurance, and freight to destination port. Buyer handles import clearance.
Container Loading Supervision
QC inspection at loading to verify quantities, packaging, and proper container loading.
DDP
Delivered Duty Paid - Seller delivers goods to buyer's door with all duties and taxes paid. Maximum seller responsibility.
Defect Rate
Percentage of products with defects in a batch. Used with AQL to determine inspection pass/fail.
DPI
During Production Inspection - Quality check conducted when 20-80% of production is complete.
EXW
Ex Works - Buyer collects goods from seller's premises and handles all transport and costs.
Export License
Government authorization required to export certain goods. Some products require licenses from China.
FCL
Full Container Load - Shipping where buyer uses entire container. Cost-effective for larger shipments.
FDA
Food and Drug Administration (US) - Regulates food, drugs, cosmetics, and medical devices imported into the US.
FOB
Free On Board - Seller delivers goods onto the vessel at origin port. Buyer pays freight and insurance from there.
Freight Forwarder
Company that arranges shipping and logistics on behalf of importers/exporters.
Golden Sample
Approved sample that serves as the standard for production quality. Factory must match this sample.
GW/NW
Gross Weight / Net Weight - GW includes packaging, NW is product weight only.
HS Code
Harmonized System Code - International standard for classifying traded products. Determines duties and regulations.
Incoterms
International Commercial Terms - Standard trade terms defining buyer/seller responsibilities (FOB, CIF, DDP, etc.).
Inspection Certificate
Document certifying that goods have passed quality inspection.
LCL
Less than Container Load - Sharing container space with other shippers. Good for smaller shipments.
Lead Time
Time from order placement to shipment. Includes production time plus any pre-production preparation.
Letter of Credit (L/C)
Bank-guaranteed payment method. Bank pays seller when documented conditions are met.
MOQ
Minimum Order Quantity - Smallest order a supplier will accept. Can often be negotiated.
OEM
Original Equipment Manufacturer - Factory produces products for other brands. You provide specs, they manufacture.
ODM
Original Design Manufacturer - Factory designs and manufactures products. You can put your brand on their designs.
Packing List
Document listing all items in a shipment with quantities, weights, and dimensions.
PI
Proforma Invoice - Preliminary invoice sent before shipment detailing goods, prices, and terms.
PSI
Pre-Shipment Inspection - Final quality check before goods leave the factory.
QC
Quality Control - Process of ensuring products meet specified standards.
RFQ
Request for Quotation - Formal request sent to suppliers asking for pricing on specific products.
REACH
EU regulation for chemical safety. Products sold in EU must comply.
Sample Order
Small order to evaluate product quality before placing bulk order.
Sourcing Agent
Intermediary who helps buyers find and work with suppliers in China.
T/T
Telegraphic Transfer - Bank wire payment. Common payment method for China suppliers (typically 30% deposit, 70% before shipping).
Trading Company
Company that buys from factories and sells to international buyers. Acts as intermediary.
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