BSA GROUP Glossary of International Trade & Sourcing Terms

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200+ Countries Global Shipping

Global shipping coverage for e-commerce and wholesale orders.

17-Step Framework

A structured approach to managing international trade processes.

3PL

Third-party logistics provider for warehousing and fulfillment.

1688

A Chinese B2B platform for domestic wholesale trade, mainly serving buyers within China.

A

AEO (Authorized Economic Operator)

A WTO-endorsed certification program in which importers and exporters who meet defined compliance standards receive expedited customs clearance and reduced inspection rates. Mutual recognition agreements between countries (e.g., China-EU AEO MRA) extend these benefits across borders. Under China’s 29-measure trade facilitation package, AEO mutual recognition has been expanded to more trading partners. See also: China Trade Facilitation 45 Cities.

Agentic AI (in Procurement)

AI systems capable of autonomously planning and executing multi-step procurement tasks — such as supplier discovery, RFQ generation, price comparison, and contract drafting — without continuous human instruction. Distinct from AI assistants that only respond to prompts. 93% of procurement executives plan to deploy agentic AI by end 2026. See also: Agentic AI Procurement Sourcing 2026.

Anti-Circumvention Clause

A contractual provision in sourcing agent agreements prohibiting the client from directly contacting or transacting with suppliers introduced by the agent for a defined period (typically 1–3 years) after the agent relationship ends. Designed to protect the agent’s investment in developing supplier relationships. See also: Sourcing Agent Business Model Fees.

API (Active Pharmaceutical Ingredient)

The chemically active component in a pharmaceutical drug that produces the therapeutic effect. India is a major global manufacturer of finished generic pharmaceuticals and is investing in domestic API manufacturing under PLI incentives to reduce dependence on Chinese inputs. See also: India Manufacturing Sourcing 2026.

ASEAN (Association of Southeast Asian Nations)

The regional intergovernmental organization comprising 10 Southeast Asian nations including Vietnam, Thailand, Indonesia, Cambodia, Malaysia, and Singapore. ASEAN collectively received $230 billion in FDI in 2025, with manufacturing FDI up 31% vs 2022. ASEAN manufacturing output grew 6.8% YoY in Q4 2025. See also: Southeast Asia Sourcing 2026.

Alipay (支付宝)

China’s dominant digital payment platform, owned by Ant Group (Alibaba affiliate). Required for most 1688.com transactions. Linked to a Chinese bank account and mobile number, making it effectively inaccessible to most foreign buyers without a Chinese banking relationship. See also: Alibaba vs 1688.

AQL (Acceptable Quality Level)

A statistical sampling standard defining the maximum acceptable defect rate in a production batch before a lot is rejected. Common levels: AQL 1.0 (strict, for safety-critical items), AQL 2.5 (industry standard for consumer goods), AQL 4.0 (relaxed). A passing AQL result does not mean zero defects — it means defects fall within statistically acceptable parameters. See also: Product Inspection China.

B

BEC (Business Email Compromise)

A fraud method where criminals intercept or spoof legitimate business email to redirect financial transactions. In import/export contexts, this typically involves substituting fraudulent bank account details into supplier payment communications. BEC targeting importers cost US businesses $2.7 billion in 2023 (FBI IC3). See also: China Sourcing Scams.

Bill of Lading (B/L)

A legal document issued by a carrier acknowledging receipt of goods for transport and containing the contract of carriage terms. In international trade, the Original (negotiable) Bill of Lading also functions as a document of title — the party holding the original B/L has the right to claim the goods from the carrier. A negotiable B/L can be transferred by endorsement; a non-negotiable sea waybill designates a specific consignee and cannot be transferred. Central to Letter of Credit transactions. See also: Cargo Title Control Risk Management 2026.

Bonded Warehouse

A secured facility where imported goods may be stored, manipulated, or re-exported without payment of customs duties. Duties are deferred until the goods enter domestic commerce, making bonded warehouses valuable for importers managing tariff exposure or uncertain demand.

Business Continuity Planning (BCP)

The process of developing documented procedures and strategies to ensure critical business operations can continue during and after significant supply chain disruptions. In sourcing contexts, BCP includes identifying alternative suppliers, pre-qualifying backup manufacturers, and establishing crisis communication protocols. Companies with formal BCP programs recover from disruptions 65% faster than those without. See also: Supply Chain Resilience 2026.

C

Canton Fair (China Import and Export Fair)

Held twice yearly in Guangzhou (April and October), the Canton Fair is the world’s largest trade exhibition with 25,000+ exhibiting companies across three product phases. The single most effective venue for meeting new Chinese suppliers, establishing face-to-face relationships, and seeing physical product samples.

CBAM (Carbon Border Adjustment Mechanism)

The EU’s mechanism for applying a carbon cost to imports of carbon-intensive goods from countries without equivalent carbon pricing. Requires EU importers to purchase certificates at the EU ETS carbon price for the embedded emissions in covered goods. Full enforcement from January 2026 for steel, aluminum, cement, fertilizers, and electricity. See also: Green Supply Chain Compliance 2026.

CBM (Cubic Meter)

Unit of volume used in shipping and logistics to calculate space occupied by cargo.

CBP Binding Ruling

An official CBP determination of the correct HTS classification, country of origin, or duty status for a specific product, issued in advance of importation. Binding on CBP for the identified product — eliminates retroactive reclassification risk. Published in CBP’s CROSS database. See also: HTS Classification Tariff Engineering.

CE Compliance

Certification indicating products meet European Union safety, health, and environmental protection requirements.

China Based Fulfillment Centre

Warehousing facility in China for storing, picking, packing, and shipping goods for international clients.

China Inspection Services

Third-party inspection services in China to verify product quality, specifications, and compliance before shipment.

China + One Strategy

A supply chain diversification approach where importers maintain China as primary supplier while developing a secondary production source (typically Vietnam, Mexico, India, or Indonesia) for highest-risk or highest-tariff items. Only 31% of companies that initiated China+1 programs achieved their stated targets within 24 months (Kearney, 2025). See also: China Plus One Myth vs Reality 2026.

China Supplier

Manufacturers and trading companies based in China that supply goods to international buyers.

CIF (Cost, Insurance, Freight)

An Incoterm under which the supplier is responsible for costs, insurance, and freight to the destination port. The buyer assumes risk once the goods are loaded on the vessel. CIF is convenient for new importers but reduces the buyer’s control over freight carrier selection.

CLI (Container Loading Inspection)

A quality control inspection conducted during the loading of goods into a shipping container. Verifies quantity, carton condition, and proper loading procedures to prevent in-transit damage. Often bundled with PSI (Pre-Shipment Inspection) for high-value shipments.

CNF (Cost and Freight)

An Incoterm where the supplier is responsible for costs and freight to the destination port, but insurance is the buyer’s responsibility.

CNIPA (China National Intellectual Property Administration)

China’s government agency responsible for trademark, patent, and copyright registration. Because China operates a first-to-file trademark system, foreign brands sourcing from China should register their trademark with CNIPA early. Cost: $300–$800 with an agent. See also: Private Label China.

COGS (Cost of Goods Sold)

The direct cost of producing and acquiring inventory — including unit cost, packaging, inbound shipping, customs duties, and prep fees. For e-commerce sellers, COGS is the primary lever in margin management. See also: Amazon FBA Sourcing Guide.

Commercial Invoice

A key shipping document issued by the seller detailing the goods, price, terms of sale, and buyer information for customs clearance.

Consignee

The person or company listed as the recipient of goods in a shipment, responsible for receiving the delivery.

Copyright

Legal protection for original works, including text, images, and designs, preventing unauthorized use or reproduction.

Country of Origin Rules / Substantial Transformation

US Customs regulations defining when a product legally qualifies as “made in” a given country for tariff purposes. Generally requires “substantial transformation” — manufacturing that fundamentally changes the product’s nature, character, or use. Simply assembling Chinese components in a third country typically does not qualify. Relevant for CBP anti-circumvention enforcement. See also: China Plus One Myth vs Reality 2026.

Cross-border E-commerce

Buying and selling products online across international borders.

CSDDD (Corporate Sustainability Due Diligence Directive)

EU Directive 2024/1760 requiring large companies operating in the EU to conduct human rights and environmental due diligence throughout their global value chains. First compliance deadline: July 2027. Creates legal obligations — not voluntary frameworks — with civil liability for affected parties and administrative penalties. See also: EU Due Diligence Supply Chain 2026.

Capacity Utilization Rate

The percentage of a manufacturing sector’s potential output capacity currently being used. Published monthly by the US Federal Reserve for US industry. A utilization rate above 80% typically indicates capacity tightness and increased investment probability; below 75% indicates slack capacity with reduced investment incentive. US manufacturing capacity utilization fell to 77.3% in Q4 2025, reflecting North America’s manufacturing slowdown. See also: Global Supply Chain Trends 2026.

Carton Mark

Labels or symbols on packages to identify contents and handling instructions.

Case Picking

Warehouse operation where full cases are picked from storage to fulfill orders efficiently.

China Sourcing Agent

A professional who helps international buyers find, evaluate, and manage suppliers in China.

Customs Declaration

Official documentation filed with customs authorities detailing imported or exported goods for clearance purposes.

Custom Packaging

Tailored packaging designed to meet specific branding, protection, or presentation requirements.

Customs Value

The declared value of imported goods used to calculate applicable duties and taxes.

D

DDP (Delivered Duty Paid)

An Incoterm under which the supplier is responsible for all costs including import duties, taxes, and delivery to the buyer’s door. Most convenient for the buyer, but the supplier builds all costs into the price, often at a premium. Common in cross-border e-commerce supplier relationships.

DDU (Delivered Duty Unpaid)

Shipping term where the seller delivers goods without paying import duties; the buyer handles customs charges.

Dangerous Goods Declaration

Official document declaring hazardous items for safe shipping and regulatory compliance.

Demurrage

A charge assessed by the carrier when a shipping container is not returned within the agreed free time after vessel discharge at the destination port. Compensates the carrier for the container being unavailable for other use. Typical free time: 4–7 days at major US ports; charges of $150–$500/day per container thereafter. Port congestion, customs delays, and documentation problems are common causes of demurrage accumulation. Distinct from detention, which is charged when the container is off-terminal with the importer beyond the free period. See also: Cargo Title Control Risk Management 2026.

DHgate Dropshipping

Dropshipping products using DHgate platform, shipped directly from China to end customers.

Dropshipping

Business model where retailers sell products without holding inventory, shipped directly from suppliers to customers.

Dropshipping Agent

Third-party service that manages product sourcing, storage, and shipping for dropshipping businesses.

Dropshipping From China To Australia

Fulfillment method where products are shipped directly from Chinese suppliers to customers in Australia.

Dropshipping From China To UK

Fulfillment service delivering goods from Chinese suppliers directly to UK customers.

Dropshipping From China To Europe

Fulfillment method where Chinese suppliers ship products directly to European customers.

Dropshipping From China To USA

Sending products directly from Chinese suppliers to customers in the United States.

Dropshipping From China To Philippines

Fulfillment service shipping products directly from China to customers in the Philippines.

Dropshipping Product

Item sold via dropshipping model without the retailer holding inventory.

Dropshipping vs Wholesale

Comparison between direct-to-customer shipping and bulk purchasing for resale.

DTC Brand Fulfillment

Direct-to-consumer order processing and delivery for branded products.

D-U-N-S Number

A unique nine-digit identifier for businesses, used globally for credit reporting and supplier verification.

Duties and Taxes

Charges imposed by customs or governments on imported or exported goods.

Dual Sourcing

A supply chain resilience strategy in which a buyer maintains two qualified, active suppliers for the same product category — typically a primary source (60–80% of volume) and a secondary source (20–40%). Companies with dual-sourced supply chains recover from disruptions 2.8× faster than single-sourced ones. The additional cost (5–15% higher unit cost from the secondary source) is the resilience insurance premium. See also: Supply Chain Resilience 2026.

DUPRO (During Production Inspection)

A quality control inspection conducted when 20–50% of a production run is complete. Identifies systemic defects while there is still time to correct the remaining production. Most valuable for large orders where a late-discovered defect could affect thousands of units.

DTC (Direct-to-Consumer)

A retail model where brands sell directly to end customers (typically via their own website) rather than through retail intermediaries or marketplaces. DTC brands control the full customer experience and margin but must build their own traffic acquisition and fulfillment infrastructure. See also: Shopify Sellers China Sourcing.

E

EXW (Ex Works)

An Incoterm in which the seller makes goods available at their factory gate; the buyer assumes all risk and cost from that point forward. Provides the buyer maximum control over freight selection but requires the most operational involvement. Common when the buyer has a freight forwarder managing origin logistics.

EMS (Electronics Manufacturing Services)

Contract manufacturing services for electronic assemblies, including PCB assembly, component sourcing, final assembly, testing, and logistics. Major global EMS providers (Foxconn, Flex, Jabil) have large operations in China’s Pearl River Delta. Distinguished from ODM by providing manufacturing services for buyer-designed products. See also: Shenzhen Supply Chain Ecosystem 2026.

ETA (Estimated Time of Arrival)

The estimated time when a shipment is expected to arrive at its destination.

ETD (Estimated Time of Departure)

The estimated time when a vessel or shipment is scheduled to depart.

Export Credit Insurance

Insurance protecting exporters against non-payment by foreign buyers.

Export License

Official authorization required to export certain controlled goods from a country.

Etsy

A global B2C platform for handmade, vintage, and unique goods.

Ecommerce Fulfillment

The process of storing, packing, and shipping online orders to customers.

F

FCL (Full Container Load)

A shipping arrangement where the buyer rents an entire container (20ft or 40ft) for exclusive use. Cost-effective when cargo exceeds approximately 15 CBM. Faster than LCL because there is no cargo consolidation step. See also: Shipping from China to USA.

FNSKU (Fulfillment Network Stock Keeping Unit)

Amazon’s unique barcode assigned to each product unit in an FBA seller’s inventory. Required on every unit sent to Amazon fulfillment centers. Different from the product’s UPC or EAN barcode and specific to the seller’s Amazon account. See also: Amazon FBA Sourcing Guide.

FOB (Free on Board)

An Incoterm under which the supplier is responsible for costs until goods are loaded on the vessel at the origin port. The buyer assumes risk and cost from that point. The most common Incoterm for experienced importers — provides a clean cost division while keeping freight selection in the buyer’s control.

FTZ (Foreign Trade Zone)

A designated area within the US (or other countries) where goods can be received, stored, manufactured, or re-exported without paying customs duties until the goods formally enter domestic commerce. Useful for importers with uncertain US demand or who may re-export a portion of imported inventory. See also: Section 301 Tariffs.

Freight Forwarder

A logistics intermediary that arranges the shipment of goods on behalf of importers or exporters. Services typically include carrier booking, customs documentation, freight insurance coordination, and liaison with port authorities. For first-time importers, a freight forwarder is strongly recommended to navigate import documentation complexity.

FEU (Forty-Foot Equivalent Unit)

The standard unit for measuring container capacity and freight rates in ocean shipping. One FEU equals the volume of a standard 40-foot shipping container (approximately 67 CBM usable space). China-US West Coast freight rates in Q1 2026: $2,800–$3,400/FEU. See also: Global Logistics Costs 2026.

Forward Contract (FX)

A financial agreement to exchange a specified amount of one currency for another at a predetermined exchange rate on a future date. Allows importers to lock in today’s exchange rate for payments due in 30–180 days. Cost for 90-day USD/CNY forward: approximately 0.3–0.8% of notional value. See also: FX Rate Management Importers.

First Sale for Export

A US customs valuation method allowing importers to declare customs value based on the first sale price in a multi-party transaction chain (factory-to-trading-company price), rather than the final sale price (trading-company-to-importer price). Can legally reduce dutiable value by 10–25% when properly documented. Requires that goods were clearly destined for export at the time of the first sale. Fewer than 15% of eligible importers currently use this method. See also: First Sale Customs Valuation 2026.

Factory Audit

A systematic on-site assessment of a manufacturing facility’s capabilities, quality management systems, social compliance, and operational practices by a qualified auditor. Standard types include: capability audit (production capacity and process verification), social compliance audit (SMETA — labor practices, health/safety, environment), and quality management system audit (ISO 9001). Cost through recognized third-party firms: $300–$600. Suppliers that pass a pre-qualification audit have 3.2× lower critical quality failure rates than non-audited suppliers. See also: Supplier Qualification Process 2026.

FAQ

Frequently Asked Questions — common inquiries about sourcing and logistics.

First Article Inspection

Inspection of initial production units to verify they meet specifications before full production begins.

Flipkart

India’s major B2C e-commerce platform for local and international products.

G

Gold Sample

An approved production sample retained by both the buyer and factory as the definitive quality reference for a production run. Inspectors compare production units against the gold sample. Without a gold sample, inspection criteria are subjective and disputes are harder to resolve. See also: Product Inspection China.

GSP (Generalized System of Preferences)

A US trade program providing duty-free or reduced-duty treatment for imports from eligible developing countries. GSP eligibility varies by product and country — Cambodia, for example, enjoys zero-tariff access for garments under EU GSP (EBA — Everything But Arms), giving EU-bound Cambodia-made goods a structural cost advantage over tariff-burdened competitors. See also: Southeast Asia Sourcing 2026.

GRIs (General Rules of Interpretation)

The six rules established by the World Customs Organization that govern how products are classified under the Harmonized System (HS). GRIs determine which HTS code applies when a product could fit multiple codes — critical knowledge for tariff engineering and HTS classification audits. GRI 1 (classification by terms of headings) is the starting point; GRI 3 (most specific description wins) is frequently cited in disputes. See also: HTS Classification Tariff Engineering 2026.

Guānxi (关系)

A fundamental concept in Chinese business culture referring to personal relationships, networks, and social capital that facilitate trust and business dealings. Strong guānxi with a supplier creates preferential treatment, better pricing, priority production scheduling, and faster problem resolution — advantages that take years to build and cannot be replicated through a platform alone.

Gross Weight

The total weight of a shipment including product, packaging, and container weight.

Global Sourcing

The practice of procuring goods and services from international markets to achieve cost savings or quality advantages.

Goods Inspection

Quality verification process to ensure products meet specified requirements before shipment.

H

HTS Code (Harmonized Tariff Schedule)

A 10-digit classification code assigned to every imported product by US Customs, determining the applicable duty rate and any special tariff measures (such as Section 301 surcharges). The first 6 digits are internationally standardized under the Harmonized System; the last 4 are US-specific. Accurate HTS classification is a legal obligation and directly affects landed cost. See also: Shipping from China to USA.

Huaqiangbei (华强北)

The world’s largest electronics components market, located in Shenzhen’s Futian District. The 1.3km² commercial district contains 20,000+ vendors selling everything from passive components to full electronics assemblies. Functions simultaneously as a spot market for components, an innovation ecosystem where new product ideas are rapidly prototyped, and an intelligence source for electronics pricing and technology trends. See also: Shenzhen Supply Chain Ecosystem 2026.

Hazardous Materials

Substances that may pose a risk to health, safety, or the environment during storage, handling, or shipping.

Harmonized System Code (HS Code)

An international standardized code used to classify traded products for customs purposes.

Handling Fee

Additional charges applied for processing, packaging, or moving goods during shipping.

Handover Document

Paperwork confirming the transfer of goods or responsibilities from one party to another.

Holdup

A delay in shipment or production, often due to customs, supplier, or logistics issues.

Hot Sale Product

Products currently in high demand, often driving fast turnover or bulk orders.

I

Incoterms (International Commercial Terms)

A set of standardized trade terms published by the International Chamber of Commerce (ICC) defining at which point in the supply chain responsibility and cost transfer from seller to buyer. Current version: Incoterms 2020. Key terms include EXW, FOB, CIF, and DDP. See also: Shipping from China to USA.

Insurable Interest

A legal requirement for insurance — the insured party must have a financial stake in the subject of the insurance policy at the time of loss. In cargo insurance, the party with insurable interest is the one who bears the risk of loss — determined by which party bears risk under the Incoterm at the time of the loss event. The buyer typically has insurable interest from the point of risk transfer (loading under FOB terms, or delivery under DDP terms). Neither party can validly insure against a loss that does not affect them financially. See also: Cargo Title Control Risk Management 2026.

ISF (Importer Security Filing)

A US Customs and Border Protection requirement that importers submit detailed shipment information at least 24 hours before cargo is loaded at the origin port. Failure to file an ISF results in penalties up to $5,000 per violation. Cost of ISF filing service: $25–$50 per shipment.

Import/Export License

Official authorization allowing a company to legally import or export goods between countries.

Inventory Management

Practices for tracking, storing, and controlling stock to ensure efficient supply chain operations.

Instagram Dropshipping

Selling products directly to customers on Instagram without holding inventory, using third-party suppliers for fulfillment.

International Priority Airmail (IPA)

A fast and cost-effective international mail service for small parcels and letters.

Import License

Official permission required to bring certain goods into a country, often regulated by customs authorities.

Intellectual Property Rights (IPR)

Legal protections for inventions, brands, designs, and other creations to prevent unauthorized use or copying.

In-Process (DUPRO) Inspection

Quality checks conducted during production to ensure products meet specifications before final assembly or shipment.

Inspection Report

A document detailing the findings of a product or factory inspection, often used to verify quality and compliance.

J

Just-in-Time (JIT)

Inventory and supply chain management strategy that reduces storage costs by receiving goods only as needed.

JIT Manufacturing

Production method where goods are manufactured based on demand, minimizing excess inventory.

Joint Inspection

Inspection process conducted by both buyer and supplier to ensure product quality before shipment.

Job Lot

Small batch of products, commonly used in wholesale or procurement for limited quantity orders.

K

Kompass

An international B2B directory and sourcing platform connecting companies by industry worldwide.

L

Landed Cost

The total cost of a product once it reaches the buyer’s warehouse, including unit cost, freight, insurance, customs duties, brokerage fees, and any additional handling charges. Landed cost — not FOB unit price — is the figure that determines actual profit margin. See also: Shipping from China to USA.

LCL (Less than Container Load)

A shipping arrangement where the buyer’s cargo shares container space with other shipments consolidated by a freight forwarder. Cost-effective for orders under approximately 15 CBM but involves additional handling, slightly longer transit times, and marginally higher risk of damage vs FCL.

Letter of Credit (L/C)

A bank-issued financial instrument guaranteeing payment to the seller upon presentation of compliant shipping documents.

Logistics

The management of the flow of goods from point of origin to point of consumption.

Lead Time

The time between order placement and product delivery.

M

MOQ (Minimum Order Quantity)

The smallest number of units a supplier will produce in a single order. MOQs range from 1 unit (for dropshipping or ODM catalog items) to 10,000+ for specialized manufacturing. MOQ is almost always negotiable, particularly when the buyer provides a credible volume growth commitment. See also: How to Source Products from China.

Maquiladora / IMMEX (Industria Manufacturera, Maquiladora y de Servicios de Exportación)

Mexico’s export-oriented manufacturing program that allows foreign companies to import components duty-free into Mexico for assembly and re-export. The IMMEX program is the legal framework governing most foreign-owned manufacturing in Mexico. Maquiladoras — factories operating under IMMEX — account for the majority of Mexico’s export manufacturing value, particularly in automotive, electronics, and medical devices. See also: Mexico Nearshoring Reality 2026.

Manufacturing PMI (Purchasing Managers’ Index)

A monthly survey-based indicator of manufacturing sector activity, compiled from purchasing managers’ responses at manufacturing companies. Values above 50 indicate expansion; below 50 indicate contraction. A leading indicator — reflects current purchasing and production decisions before they appear in official output statistics. Published for most major economies by S&P Global (IHS Markit) and national equivalents. Global Manufacturing PMI returned to expansionary territory at 51.2 in February 2026. See also: Global Supply Chain Trends 2026.

Mass Production

Large-scale manufacturing of products, typically for wholesale or export, reducing per-unit cost.

Marketplace Photography

Professional product photography optimized for e-commerce marketplaces to increase buyer engagement.

Manufacturing Process

Step-by-step procedure used in producing goods, including sourcing, assembly, quality control, and packaging.

Measurement

Dimensions, weight, and specifications of a product, critical for production accuracy and shipping.

Logistics Solutions

Services that manage transportation, warehousing, and delivery of goods from supplier to buyer efficiently.

Market Research

Analysis of market trends, customer demand, and competitor products to guide sourcing and sales strategy.

N

Nearshoring

A supply chain strategy in which companies move manufacturing or sourcing closer to their end markets (e.g., shifting production from Asia to Mexico for US-bound goods). Nearshoring reduces transit times and exposure to transoceanic freight disruptions, though typically at higher unit production costs than deep Asia manufacturing.

Natural Hedge

A business practice that reduces currency exchange risk without using financial instruments, by naturally offsetting foreign-currency revenues and costs. For importers, sourcing from countries where supplier income is dollar-denominated (common in China trade) is a natural hedge — the supplier bears CNY/USD conversion risk rather than the buyer. Also achieved by sourcing from multiple currency zones, so FX gains in one offset losses in another. See also: FX Rate Management Importers 2026.

Net Weight

The weight of a product itself, excluding any packaging, essential for shipping cost and customs declarations.

NAFTA Compliance

Ensuring products meet trade agreement requirements between the US, Canada, and Mexico for duty-free entry.

Non-Disclosure Agreement (NDA)

Legal contract protecting confidential information shared between buyers, suppliers, or manufacturers.

O

ODM (Original Design Manufacturer)

A manufacturer that designs and produces products which buyers then brand and sell under their own labels. ODM sourcing is the fastest and lowest-cost path to a private label product but offers minimal differentiation, since multiple brands can sell variations of the same base product. See also: Private Label China.

OEM (Original Equipment Manufacturer)

A manufacturer that produces goods to the buyer’s proprietary specifications and branding. OEM manufacturing provides the highest product differentiation and IP protection but requires more development investment and typically higher MOQ than ODM. The standard model for serious private label brand building. See also: Private Label China.

Order Process

Step-by-step procedure for processing and managing orders from placement to delivery.

Order Workflow

Systematic sequence of tasks for handling orders efficiently.

Order Tracking

Monitoring the status and location of orders throughout the shipping process.

Online Business Automation

Using software tools to automate e-commerce operations, inventory, and sales processes.

ODM Product Development

The process of designing and developing products under ODM arrangements.

OEM Product Development

Process of developing custom products according to buyer’s specifications.

Order Fulfillment

Completing and shipping orders to customers, including picking, packing, and delivery.

Online Store Growth Strategies

Tactics for increasing online store sales, traffic, and customer base.

P

PPI (Pre-Production Inspection)

A quality control check conducted before production begins, verifying that raw materials, components, and factory setup meet specifications. Catches problems at the lowest-cost intervention point — before production time and materials are committed. See also: Product Inspection China.

PLI Scheme (Production-Linked Incentive)

India’s government incentive program offering financial incentives (4–6% of incremental sales) to domestic and foreign companies that establish or expand manufacturing capacity in India. Active across 14 sectors including mobile phones, pharmaceuticals, textiles, and automotive components. PLI disbursements reached ₹4,415 crore by Q3 2025. A key driver of India’s manufacturing growth and FDI attraction. See also: India Manufacturing Sourcing 2026.

PSI (Pre-Shipment Inspection)

A quality control inspection conducted when 80–100% of production is complete and goods are packed. The most commonly commissioned inspection type. Provides the final quality gate before goods leave the origin country — the last point where the buyer retains leverage to require remediation without absorbing return shipping costs. See also: Product Inspection China.

PSS (Peak Season Surcharge)

A temporary freight surcharge applied by ocean carriers during periods of elevated shipping demand — typically August–October (pre-holiday inventory build) and January–February (Lunar New Year recovery). PSS can add $300–$800/FEU to base freight rates during peak periods. Importers who time shipments to avoid peak seasons or who have contract freight rates can avoid PSS exposure. See also: Global Logistics Costs 2026.

Pearl River Delta (PRD / 珠三角)

The manufacturing heartland of southern China encompassing Shenzhen, Guangzhou, Dongguan, Foshan, and surrounding cities. The PRD accounts for approximately 10% of China’s GDP and contains the world’s most mature electronics, consumer goods, and light manufacturing supply chain ecosystem. 85% of global consumer electronics contain at least one component sourced from the PRD region. See also: Shenzhen Supply Chain Ecosystem 2026.

Pick and Pack

Process of selecting items from inventory and packaging them for shipment.

Packing List

A shipping document detailing the contents, quantity, and packaging information of a shipment.

PayPal

An online payment platform commonly used for international transactions and cross-border payments.

Port of Loading

The seaport or airport where goods are loaded onto the main transport vessel.

Purchase Order

A formal document issued by a buyer to confirm product details, pricing, and order quantity.

Private Label

Products manufactured by a supplier and sold under a buyer’s own brand name.

Patent

A legal right that protects an invention from being made or sold without authorization.

Place of Delivery

The agreed location where goods are delivered to the buyer under a contract or Incoterm.

Proforma Invoice

A preliminary invoice provided by the seller outlining product and payment details before shipment.

Pre-Shipment Inspection

A quality check conducted before shipment to verify product quantity, quality, and compliance.

Product Sourcing

The process of identifying and selecting suitable suppliers to manufacture or supply products.

Payment Terms

The agreed conditions that define how and when payments are made between buyer and seller.

Port of Discharge

The destination port where goods are unloaded from the main transport vessel.

Production Sample

A final sample produced to confirm quality and specifications before mass production.

Pre-Production Inspection

An inspection conducted before manufacturing begins to verify materials and production readiness.

Procurement Services

Professional services that manage supplier sourcing, negotiation, and purchasing processes.

Procurement

The overall process of sourcing, purchasing, and managing goods or services for a business.

Q

QIMA

A global quality control and compliance services company offering online-booked factory audits, product inspections, and laboratory testing in China and other sourcing markets. QIMA’s Global Quality & Compliance Index is a frequently cited industry data source. Typical PSI cost: $299–$449 per inspection day.

Quality Control (QC)

The process of monitoring and inspecting products during or after production to ensure they meet defined quality standards.

Quality Inspection

A systematic examination of products to verify specifications, workmanship, and compliance before shipment.

Quality Assurance (QA)

A proactive system focused on preventing defects by improving production processes and quality management practices.

Quotation

A formal price offer from a supplier outlining product cost, specifications, MOQ, lead time, and trade terms.

Quick Turn Production

A manufacturing approach designed to shorten production lead times for urgent or fast-moving orders.

Quality Standard

A set of defined criteria used to evaluate product performance, safety, and consistency.

Quality Management System (QMS)

A structured framework that documents processes and responsibilities to ensure consistent product quality.

Quantity Tolerance

The allowable variation between ordered and delivered quantities in bulk manufacturing.

Quotation Validity

The time period during which a supplier’s quoted price and terms remain effective.

R

RFQ (Request for Quotation)

A formal document sent to potential suppliers specifying product requirements, quantity, packaging, certifications, and timeline, requesting a price response. A well-structured RFQ is a screening tool — the specificity of a supplier’s response reveals their capability and attention to detail as much as their price does. See also: How to Find Suppliers in China.

Research Sources

Reliable sources for supplier, product, and market research in global trade.

S

Section 301 Tariffs

Additional import duties imposed by the US government on Chinese goods under Section 301 of the Trade Act of 1974. Enacted in 2018 and expanded through 2025–2026. When stacked with Section 232 and executive order tariffs, effective rates on some Chinese goods exceed 60%. Section 301 exclusion approval rate: less than 30%. See also: Tariff Stacking Sourcing Agent Strategies.

Section 232 Tariffs

Additional US import duties imposed under Section 232 of the Trade Expansion Act of 1962 based on national security findings. Currently applied at 25% on steel and aluminum imports from most countries, including China. Applied cumulatively on top of Section 301 tariffs for applicable products — a key component of tariff stacking. See also: Tariff Stacking Sourcing Agent Strategies.

SCFI (Shanghai Containerized Freight Index)

A weekly freight rate index published by the Shanghai Shipping Exchange tracking spot freight rates on major shipping routes from Shanghai. Widely used as a benchmark for China export freight rates. Q1 2026 China-US West Coast rate: $2,800–$3,400/FEU. See also: Global Logistics Costs 2026.

Safety Stock

Inventory held above expected demand requirements to buffer against demand variability or supply delays. Companies holding 30–45 days of safety stock on critical SKUs report 78% fewer stockout incidents. The carrying cost (20–30% of inventory value per year) is the insurance premium against stockout risk. See also: Supply Chain Resilience 2026.

SMETA (Sedex Members Ethical Trade Audit)

A widely recognized third-party social compliance audit methodology covering labor practices, health and safety, environmental management, and business ethics. One of the most commonly accepted audit standards for CSDDD compliance evidence in Europe. See also: EU Due Diligence Supply Chain 2026.

Spend Analytics

The systematic analysis of an organization’s procurement spending data to identify patterns, savings opportunities, supplier consolidation potential, and risk exposure. AI-powered spend analytics tools that replace manual category management report 8–12% savings on indirect procurement. See also: Agentic AI Procurement Sourcing 2026.

Supply Chain Mapping

The systematic identification and documentation of all entities in a company’s supply chain — from direct (Tier 1) suppliers through to raw material producers. The foundational capability required for CSDDD compliance, Scope 3 carbon accounting, and supply chain resilience planning. 69% of procurement professionals currently lack the supplier visibility to comply with CSDDD requirements. See also: EU Due Diligence Supply Chain 2026.

Supply Chain Maturity

The depth and sophistication of a manufacturing ecosystem’s upstream component, material, and service supplier network. High supply chain maturity (as in China’s Pearl River Delta) means manufacturers have rapid access to components and specialized services within short geographic distances. A key differentiator between China and most alternative sourcing countries in 2026. See also: Southeast Asia Sourcing 2026.

Supplier Qualification

The structured process of evaluating a potential supplier across multiple dimensions — business legitimacy, production capability, financial health, quality management, and regulatory compliance — before placing production orders. Professional qualification processes include document verification, factory audit, sample evaluation, and trial order assessment. Pre-qualified suppliers have 3.2× lower critical quality failure rates than non-audited suppliers in the first 24 months of the relationship. See also: Supplier Qualification Process 2026.

Sales Contract

Formal agreement between buyer and supplier outlining terms of sale.

Sea Waybill

Document issued by a carrier acknowledging receipt of cargo for shipment.

Shipping Mark

Labels or symbols on packages to identify contents and handling instructions.

Shipping Sample

Sample product sent to buyer for approval before mass production or shipment.

Supply Chain

Entire process of producing, sourcing, and delivering a product.

Supplier Verification

Process of validating supplier legitimacy and capabilities.

Signature Confirmation

Proof of delivery requiring recipient’s signature.

Sourcing Agent

Professional helping buyers find and manage suppliers overseas.

Shipping Solution

Optimized method for transporting goods efficiently and safely.

T

Trade Assurance

Alibaba’s built-in payment escrow protection system. Buyer funds are held by Alibaba and released to the supplier only when the buyer confirms receipt of conforming goods, or after a specified time period. Provides meaningful protection against non-delivery and quality failures for on-platform Alibaba transactions. Note: does not cover off-platform transactions negotiated via WeChat or email. See also: How to Source Products from China.

Tariff Stacking

The cumulative effect of multiple overlapping US import tariff measures applied simultaneously to the same goods — typically Section 301 (China trade war tariffs), Section 232 (national security tariffs on steel/aluminum), and executive order tariffs. When stacked, effective tariff rates on some Chinese goods exceed 60–65%, fundamentally changing the economics of China sourcing for affected categories. See also: Tariff Stacking Sourcing Agent Strategies.

Tariff Engineering

The legal practice of structuring product specifications, manufacturing processes, or sourcing arrangements to qualify for a more favorable HTS classification or tariff rate. Legal when genuinely reflecting the product’s characteristics; illegal (customs fraud) when product changes are contrived solely for classification purposes.

Trading Company vs Sourcing Agent

A trading company buys goods from factories and resells them to foreign buyers, earning margin on the price spread (typically 15–30%) — the actual factory price is not disclosed. A sourcing agent works on behalf of the buyer to identify suppliers and negotiate prices, earning a disclosed commission (typically 3–10%) without owning the inventory. The distinction affects price transparency, alignment of interests, and the buyer’s ability to build direct factory relationships. See also: Sourcing Agent Business Model Fees 2026.

Transshipment (Fraudulent)

The practice of routing goods through a third country to falsely claim a different country of origin for tariff avoidance purposes. When goods are not substantially transformed in the intermediate country, transshipment constitutes customs fraud, subject to CBP enforcement including cargo seizure, duty penalties, and potential criminal prosecution. Distinct from legitimate transshipment, which is simply routing cargo through an intermediate hub port.

Trial Order (试单)

A small initial order placed with a new supplier to evaluate production quality, communication responsiveness, and logistics reliability before committing to full production volumes. Typically 10–30% of intended regular order quantity. The trial order investment — often at a slightly higher per-unit cost — is the due diligence cost for the supplier relationship. See also: MOQ Negotiation China Suppliers 2026.

3PL (Third-Party Logistics)

An outsourced fulfillment provider that receives, stores, picks, packs, and ships inventory on behalf of a brand or importer. For DTC brands, a US-based 3PL enables fast domestic order fulfillment without the capital and operational cost of operating a warehouse. Common providers: ShipBob, ShipHero, Whiplash. See also: Shopify Sellers China Sourcing.

T/T (Telegraphic Transfer)

Bank transfer method widely used in international trade.

Trade Terms

Standardized international commerce terms defining responsibilities of buyers and sellers.

Tare Weight

Weight of packaging or container without the product inside.

Tariff

Tax or duty imposed on imported/exported goods.

Trademark

Registered symbol, logo, or name protecting brand identity.

Third-Party Inspection

Independent quality check performed by certified agencies.

U

UFLPA (Uyghur Forced Labor Prevention Act)

US law effective June 2022 establishing a rebuttable presumption that goods produced wholly or in part in China’s Xinjiang region — or by entities on the UFLPA Entity List — are made with forced labor and are prohibited from US import. Importers must provide “clear and convincing evidence” to overcome the presumption. Over 8,600 shipments valued at $2.1B+ have been detained since enforcement began. High-risk product categories: cotton, polysilicon, tomato products, and downstream goods containing these inputs. See also: Green Supply Chain Compliance 2026.

USMCA (United States-Mexico-Canada Agreement)

The trade agreement replacing NAFTA (in force July 2020) governing trade between the US, Mexico, and Canada. Products meeting USMCA rules of origin qualify for zero-tariff treatment between the three countries — a major advantage for Mexico-manufactured goods sold to the US market. Stricter rules of origin than NAFTA apply for automotive, steel, and aluminum content. A key driver of Mexico nearshoring investment. See also: Mexico Nearshoring Reality 2026.

V

VAT Rebate (出口退税)

A Chinese government program under which exporters receive a partial refund (typically 9–13%) of the value-added tax paid on manufacturing inputs when goods are exported. The rebate is factored into export pricing, making the effective economics of export pricing different from domestic 1688 pricing. Under China’s 2026 trade facilitation reforms, VAT rebate processing time has been reduced from 30 days to 7 days across 45 pilot cities. See also: China Trade Facilitation 45 Cities 2026.

Vendor

Supplier or seller providing goods or services.

VAT (Value Added Tax)

Tax applied on value added at each stage of production or sale.

W

Wholesale Price

Cost of goods sold in bulk to retailers or distributors.

Western Union

International money transfer service commonly used for payments.

White Label

Product manufactured by one company and rebranded by another.

Wire Transfer

Electronic method for sending money between banks.

Wholesale Order

Bulk purchase of products from a supplier at a discounted rate.

Y

Yiwu International Trade City

Major wholesale market in China, sourcing hub for global buyers.

Z

Zero Inventory

Business model where goods are shipped directly from supplier to customer.

Zone Clearance

Customs procedure allowing goods to move out of a free trade zone.

China

Alibaba

Major B2B platform connecting international buyers with Chinese suppliers.

1688

Chinese domestic wholesale platform, mainly serving local buyers.

Made-in-China

B2B platform showcasing Chinese manufacturers and suppliers.

Global Sources

B2B sourcing platform focused on verified suppliers from China and Asia.

DHgate

Online wholesale marketplace for small orders from Chinese suppliers.

Taobao

Leading Chinese C2C platform for consumer goods.

Tmall

Alibaba’s premium B2C platform for branded products in China.

JD.com

Major Chinese online retailer offering B2C direct sales and marketplace services.

AliExpress

Global B2C platform for international buyers sourcing small quantities from China.

HKTDC

Hong Kong Trade Development Council platform for verified suppliers and buyers.

LightInTheBox

Global online retail and wholesale platform based in China.

CnFans

Chinese cross-border purchasing and sourcing service for international buyers.

KakoBuy

Platform supporting international buyers to source Chinese products efficiently, including spreadsheets search tools.

Hipobuy

China sourcing agent platform, focusing on bulk orders and cross-border shipping.

ACBuy

Chinese sourcing and purchasing platform for global buyers to manage product orders and shipments.

MuleBuy

China cross-border purchasing service specializing in apparel and accessories sourcing.

LoveGoBuy

Chinese sourcing service providing global buyers access to small-batch and bulk products.

AllChinaBuy

Platform for international buyers to source a wide range of Chinese products efficiently.

PonyBuy

China cross-border purchasing agent for e-commerce and wholesale buyers.

Hoobuy

Specialized Chinese sourcing platform for global buyers, offering consolidated shipping services.

Superbuy

Chinese cross-border purchasing platform supporting international buyers for personal and wholesale orders.

CSSBuy

China-based sourcing agent platform focusing on fashion, footwear, and streetwear products for global buyers.

BaseTao

Chinese cross-border sourcing platform with spreadsheet search tools for efficient procurement.

United States

Amazon

Leading US B2C platform for domestic and international buyers.

eBay

C2C/B2C online marketplace for US and global buyers.

Walmart.com

Online retail platform of Walmart serving US consumers and global orders.

Etsy

Marketplace for handmade, vintage, and craft items with global reach.

Faire

US wholesale marketplace connecting small brands with retailers.

Tundra

US B2B wholesale platform for small retailers, boutiques, and bulk orders.

Overstock

Online retailer offering discounted goods and bulk purchase options.

Wayfair

US e-commerce platform focusing on furniture, home goods, and décor.

Europe

Ozon

Major Russian e-commerce platform for B2C and marketplace sales.

Zalando

European online retailer focused on fashion and lifestyle products.

Rakuten

Japanese e-commerce platform also serving European markets.

Mercado Libre

Latin America’s largest online marketplace, popular in Spain and Portugal.

Cdiscount

French e-commerce platform for consumer electronics, home, and lifestyle products.

Bol.com

Leading Dutch online retailer serving the Netherlands and Belgium.

Allegro

Largest Polish online marketplace for consumer and B2B sales.

Southeast Asia

Shopee

Leading Southeast Asian B2C platform across multiple countries.

Lazada

Alibaba’s e-commerce platform for Southeast Asia.

Qoo10

Popular online marketplace in Singapore, Malaysia, and South Korea.

Coupang

South Korea’s largest online retailer.

Lelong

Malaysia’s local e-commerce platform for B2C and small retailers.

Japan

Rakuten

Japan’s largest online retail platform, serving B2C and marketplace sellers.

Mercari

C2C marketplace for Japan with international shipping options.

Yahoo Auction Japan

Japanese C2C auction platform for consumer and collectible goods.

Latin America

Mercado Libre

Largest online marketplace in Latin America, covering multiple countries.

B2W Digital

Brazilian e-commerce company operating platforms like Americanas and Submarino.

Magazine Luiza

Brazilian online and offline retail chain, also offering e-commerce services.

Middle East

Noon

Leading Middle Eastern online marketplace for UAE, Saudi Arabia, and Egypt.

Souq

Amazon-owned e-commerce platform in Middle East, now integrated with Amazon.ae.

Global Sourcing Platforms

Global Sourcing

B2B sourcing platform connecting buyers to verified global suppliers.

TradeKey

International B2B marketplace connecting buyers and suppliers worldwide.

Indiamart

India’s leading B2B platform for manufacturers and suppliers.

Global Marketplace

Collective term for cross-border B2B/B2C platforms serving multiple countries.