Glossary

The China sourcing glossary

61 terms every importer meets when buying from China, explained in plain English by people who use them every day on factory floors in Shenzhen and Zhengzhou.

Suppliers and platforms

Manufacturer: A company that owns the production lines and makes the product itself. Buying from the manufacturer removes the trading-company margin and gives you direct control over specification and quality. Read more →
Trading company: A company that sells products made by other factories, adding a margin. Many "factories" on B2B platforms are trading companies. Not always bad, but you should know which one you are dealing with. Read more →
Sourcing agent: A person or company that finds, vets and manages suppliers on the buyer's behalf, usually including negotiation, quality control and shipping coordination. Read more →
OEM (Original Equipment Manufacturing): The factory makes a product to your own design and specification, usually under your brand. You own the design; the factory owns the production. Read more →
ODM (Original Design Manufacturing): The factory sells its own existing design, which you brand and sell as yours. Faster and cheaper to start than OEM, but other brands may sell the same product. Read more →
Private label: Selling a product made by a manufacturer under your own brand name, packaging and barcodes. Usually built on an ODM product with your branding. Read more →
MOQ (Minimum Order Quantity): The smallest order a factory will accept, per product, colour or size. Often negotiable, especially for a first order or a product the factory already makes.
Lead time: The time from confirmed order and deposit to goods ready for shipment. It excludes transit time, which is added on top.
Tooling (mould): The steel moulds, dies or fixtures made specifically for your product. A one-off cost; your contract should say who owns the tooling and where it is kept. Read more →
Business licence (USCC): Every Chinese company has a business licence carrying an 18-character Unified Social Credit Code. Checking the licence confirms the company exists, its registered scope and whether it is a manufacturer. Read more →
Alibaba: China's best-known B2B marketplace for international buyers. It lists both manufacturers and trading companies, so supplier verification still matters. Read more →
1688: Alibaba Group's domestic Chinese wholesale marketplace, in Chinese and aimed at Chinese buyers. Prices are often lower than on Alibaba.com, but buying usually needs a local agent.
Canton Fair: The China Import and Export Fair in Guangzhou, held every spring and autumn in three phases, each covering different product categories. Read more →
Huaqiangbei: The electronics market district in Futian, Shenzhen, widely described as the largest electronics market in the world. It is the centre of the phone and phone parts trade. Read more →

Quality control

AQL (Acceptance Quality Limit): A statistical sampling standard (ISO 2859-1) that sets how many units to inspect from a batch and how many defects are acceptable. AQL 2.5 for major defects is a common level for consumer goods. Read more →
Pre-shipment inspection (PSI): An inspection of finished, mostly packed goods before the balance is paid and the goods ship. The last point at which problems can be fixed cheaply. Read more →
During-production inspection (DUPRO): An inspection while goods are on the line, usually when 20 to 60% are made, so problems are caught before the whole order is finished.
Pre-production sample (PPS): A sample made with the actual production materials and process, approved by the buyer before mass production starts.
Golden sample: The approved, signed-off sample that the production run and the inspection are measured against. Keep one at the factory and one yourself.
Factory audit: An on-site check of a factory's legal status, capacity, equipment, processes and quality system before you place an order. Read more →
Critical, major and minor defects: The three defect classes used in AQL inspection. Critical defects make a product unsafe, major defects make it unsellable or unusable, minor defects are cosmetic.
Corrective action plan (CAP): The supplier's written plan to fix the cause of a failed inspection, with rework, re-inspection and prevention steps.

Compliance and regulation

CE marking: The mark showing a product meets the EU legislation that applies to it. The importer must check the CE mark is backed by a Declaration of Conformity and technical documentation. Read more →
UKCA: The UK conformity mark for goods placed on the market in Great Britain, the British counterpart to CE marking.
Declaration of Conformity (DoC): The manufacturer's signed statement that a product meets the named EU directives and standards. Ask for it before you pay, not after the goods arrive. Read more →
Technical file: The documentation behind a CE mark: design, test reports, risk assessment and standards applied. Authorities can ask the importer to provide it.
RoHS: EU rules restricting hazardous substances such as lead and mercury in electrical and electronic equipment.
REACH: The EU regulation on chemicals, including restricted substances in consumer products such as phthalates in plastics.
GPSR: The EU General Product Safety Regulation, applying since 13 December 2024. Consumer products sold in the EU need a responsible economic operator based in the EU.
CBAM: The EU Carbon Border Adjustment Mechanism, covering imports of goods such as steel, aluminium, cement and fertilisers. Read more →
UN38.3: The UN transport test for lithium batteries. Batteries, and products containing them, need a UN38.3 test summary to ship by air or sea. Read more →
SDS (Safety Data Sheet): A document describing a product's hazards and safe handling, often required by freight forwarders for chemicals and batteries.

Shipping and customs

Incoterms: The International Chamber of Commerce rules that define who pays for and carries the risk of each stage of delivery. The current version is Incoterms 2020. Read more →
EXW (Ex Works): The seller makes goods available at its own premises; the buyer handles everything from there, including Chinese export clearance. Read more →
FOB (Free On Board): The seller delivers the goods on board the ship at the named Chinese port and clears them for export. From that point, freight, insurance and risk pass to the buyer. Read more →
CIF (Cost, Insurance and Freight): The seller pays freight and minimum insurance to the destination port, but risk passes to the buyer once the goods are loaded in China. Read more →
DAP (Delivered At Place): The seller delivers to a named place in the destination country, ready for unloading. The buyer pays import duty and VAT. Read more →
DDP (Delivered Duty Paid): The seller delivers to the buyer with import duty and VAT paid. The simplest for the buyer, and the most work for the seller.
FCL (Full Container Load): A whole container used for one shipment. Usually cheaper per unit once you fill more than about half a container. Read more →
LCL (Less than Container Load): Your goods share a container with other shippers, priced by volume. Good for small shipments, with extra handling at each end. Read more →
20GP, 40GP and 40HQ: Standard container sizes: a 20ft general purpose (about 33 m³), a 40ft general purpose (about 67 m³) and a 40ft high cube (about 76 m³), one foot taller.
Bill of lading (B/L): The shipping line's receipt for the goods and, in its original form, the document of title. Whoever holds the original B/L can claim the cargo.
Telex release: The shipping line releases cargo at destination without the original bill of lading, once the shipper has surrendered it in China. Common once the balance is paid.
Freight forwarder: A company that books and coordinates transport, consolidation and paperwork for your shipment. Read more →
Customs broker: A licensed agent who prepares and submits import declarations and pays duty and VAT on the importer's behalf.
HS code: The Harmonised System product code used worldwide to classify goods for customs. It decides the duty rate, so get it right before you price. Read more →
EORI number: The EU customs identification number every business importing into the EU needs. In Ireland it is issued by Revenue.
Landed cost: The full cost of goods delivered to your door: factory price, freight, insurance, duty, VAT, clearance and delivery. Read more →
Demurrage and detention: Charges for keeping a container at the port (demurrage) or outside it (detention) beyond the free days. Slow customs paperwork is the usual cause.
China–Europe rail freight: Container trains from Chinese hubs such as Zhengzhou to Europe. Faster than sea and cheaper than air for some goods. Read more →

Payment

T/T (Telegraphic Transfer): A bank wire transfer, the usual way to pay Chinese suppliers. Always confirm bank details by phone or video before paying a new account. Read more →
30/70 terms: A common payment structure: 30% deposit to start production, 70% balance after inspection and before shipment or against the bill of lading. Read more →
Letter of credit (L/C): A bank guarantee that pays the supplier only when documents proving shipment are presented. Secure, but slower and more expensive to arrange.
Proforma invoice (PI): The supplier's formal quotation and order confirmation, issued before payment. It should state product, specification, price, Incoterm and payment terms.
CNY / RMB: China's currency, the yuan (CNY), also called renminbi (RMB). Most export quotations are in US dollars.

Phones and phone parts

IMEI: The unique 15-digit identity number of a mobile phone. Checking it against blacklist databases shows whether a phone has been reported lost or stolen. Read more →
Activation Lock: Apple's anti-theft lock that ties an iPhone, iPad or Apple Watch to the owner's Apple Account. A locked device cannot be set up by anyone else. Read more →
MDM (Mobile Device Management): Company or school management software that controls a device. MDM-enrolled devices show a Remote Management screen after a reset. Read more →
In-cell, hard OLED, soft OLED: The main aftermarket phone screen grades: in-cell is an LCD with built-in touch, hard OLED is OLED on a rigid base, and soft OLED is OLED on a flexible base like the original. Read more →
Global version: A phone built for international markets, with Google services and international network bands, as opposed to a China version. Read more →
Grade A, B, C (used phones): Trade conventions describing the cosmetic condition of used phones. They are not standardised and say nothing about battery health or locks. Read more →

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