The trade, platform and factory terms you will meet in supplier messages, explained the way a sourcing agent would.
62 terms
Also called Acceptable quality limit
A statistical sampling standard (ISO 2859-1) defining how many units to inspect from a lot and how many defects are acceptable. Common consumer-goods setting: Critical 0 / Major 2.5 / Minor 4.0, general inspection level II.
Why it matters
Turns 'good quality' into a number both sides agree on before production.
Older name for what is now shown as Verified; a supplier with an on-site assessment report available on the profile.
Why it matters
The report includes capacity, staff numbers, and certifications - read it before asking questions the report already answers.
Also called Factory audit
A third-party inspection of a factory covering legal existence, capacity, workforce, equipment, quality systems and sometimes social compliance.
Why it matters
The fastest way to confirm a 'manufacturer' actually manufactures your product.
Paying the remaining amount when the supplier shows the bill of lading proving goods are shipped, before releasing the original documents.
Why it matters
Balances trust: they have shipped; you have not yet received. Use telex release to avoid courier delays.
Also called B/L, BL
The carrier's receipt for the goods and the document of title. Whoever holds the original (or receives telex release) can collect the cargo.
Why it matters
The supplier controls it until you pay the balance.
Also called Mass production
The main manufacturing run after samples are approved and the deposit is received.
Why it matters
Changes after bulk production starts are expensive; freeze the spec with the golden sample before the deposit.
Also called China Import and Export Fair
The largest trade fair in China, held in Guangzhou each April/May and October/November in three product phases.
Why it matters
Sales teams are away and quotes may be 'fair prices'; a good time to meet suppliers and benchmark.
Also called CRD
The date goods are packed and available for pick-up at the factory.
Why it matters
The single most important date in the PI. Late-delivery penalties should count from here.
Also called Cubic metre
Volume of cargo in cubic metres. Sea LCL freight is priced per CBM.
Why it matters
Packaging design changes CBM and therefore freight per unit.
Also called CO, Form A, Form E
Document certifying where goods were made, issued by CCPIT or China customs.
Why it matters
Needed for preferential duty under trade agreements (e.g. ChAFTA) and sometimes for customs clearance.
Also called 差不多
'Close enough'. A cultural tendency to accept small deviations.
Why it matters
Your spec must state tolerances, and your inspection must enforce them.
Also called Volumetric weight
For air freight, the greater of actual weight and volumetric weight (CBM x 167 kg).
Why it matters
Light, bulky goods pay for volume, not weight.
Also called Spring Festival, CNY, 春节
The most important holiday. Factories close 1-4 weeks around late January to February; workers travel home and some do not return.
Why it matters
Plan Q1 orders to be cargo-ready 10+ days before the closure, or expect March delivery with quality dips.
Also called Cost, Insurance and Freight
Seller pays freight and minimum insurance to the destination port. Buyer handles import clearance and delivery.
Why it matters
Suppliers often mark up freight and use the cheapest carrier. Compare with FOB + your own forwarder.
Also called Container loading supervision
An inspector witnesses loading: quantity, carton condition, container seal.
Why it matters
Prevents short-shipping and swap after inspection.
The seller's invoice used for customs valuation: description, HS code, unit price, total, incoterm, currency.
Why it matters
Must match the PI and payments or customs may hold the shipment.
Defect classes: critical (unsafe or illegal, zero tolerance), major (likely return or complaint), minor (cosmetic, unlikely to be noticed).
Why it matters
Agree the classification for your product in writing so the inspection result is not disputed.
Also called Dutiable value
The value on which duty and import VAT are calculated. In most countries CIF value: goods + freight + insurance.
Why it matters
Under-declaring is fraud by the importer of record - you, not the supplier.
Also called Delivered at Place
Seller delivers to your address; you pay import duty and VAT.
Why it matters
A clean middle ground when you want door delivery but proper customs declaration in your name.
Also called Delivered Duty Paid
Seller delivers to your address with duties and taxes paid.
Why it matters
Convenient, but the seller's agent may under-declare value to save duty. You are the importer of record and carry the compliance risk.
Charges for keeping a container in the port beyond free days (demurrage) or outside the port beyond free days (detention).
Why it matters
Slow documents or customs holds turn into daily charges quickly.
The upfront payment (typically 30%) that lets the supplier buy materials and start production.
Why it matters
Pay it through Trade Assurance and only to an account matching the company name on the licence.
Also called Trade Assurance dispute
A formal claim raised through Alibaba when a Trade Assurance order is late, short, or below the agreed quality. Alibaba mediates and can refund from the supplier's held funds.
Why it matters
Your leverage after payment. Most disputes settle at a partial refund; evidence quality decides the outcome.
Also called During-production inspection
Inspection when 20-40% of the order is produced.
Why it matters
Catches systematic defects while the line can still be corrected. Essential for first orders and post-holiday production.
Estimated time of departure from origin port / estimated time of arrival at destination port.
Why it matters
Both slip; plan warehouse and sales dates from ETA plus clearance time.
Also called Ex Works
Goods are made available at the factory. The buyer arranges and pays for everything from the factory door, including Chinese export clearance.
Why it matters
Looks cheapest but adds export declaration and local trucking that your forwarder must handle in China. Prefer FCA or FOB unless you have a strong forwarder.
Also called Mianzi, 面子
Social standing and dignity. Public criticism causes loss of face and damages cooperation.
Why it matters
Be firm in private and specific in writing; avoid humiliating tone even when rejecting a lot.
Also called Free Carrier
Seller hands goods to your nominated carrier at a named place in China, export-cleared.
Why it matters
The ICC's recommended replacement for FOB when goods are containerised, since risk transfers at handover rather than on board.
Also called Full container load
Your own 20', 40' or 40' HQ container at a flat rate.
Why it matters
Cheaper per unit above ~15 CBM and lower damage risk.
Also called Free on Board
The seller delivers goods on board the vessel at the named Chinese port, export-cleared. Risk and cost transfer to the buyer once loaded.
Why it matters
You control international freight and insurance with your own forwarder, which is usually cheaper and more transparent than the supplier's CIF price.
Example: USD 4.20/unit FOB Shenzhen
A company that books space with carriers, handles export/import paperwork and coordinates door-to-door transport.
Why it matters
Your forwarder is your ally in China; the supplier's forwarder works for the supplier.
A paid premium membership tier on Alibaba.com. The number of years shown is how long the company has paid for it.
Why it matters
Weak as a trust signal on its own - it is bought, not earned - but long tenure means the account has survived many transactions and disputes.
Also called Reference sample, Approval sample
The approved sample that mass production must match. One sealed copy stays at the factory, one goes to the inspector.
Why it matters
The inspector's standard. Without it, 'defect' is an argument.
Also called National Day holiday, 国庆节
The National Day holiday, 1-7/8 October. Factories, ports and banks close.
Why it matters
Production milestones in this window slip by 8-12 days; freight space sells out in September.
Also called 关系
Relationship capital built through trust, reciprocity and time.
Why it matters
Suppliers prioritise customers they like when capacity is short. Consistency and courtesy pay off in peak season.
Also called Harmonized System code, Tariff code
A 6-digit international classification (extended to 8-10 digits nationally) that determines duty rate and import requirements.
Why it matters
Get the code right at quote stage; it decides your landed cost.
International Chamber of Commerce rules defining which party pays for and bears the risk of each stage of shipping: EXW, FCA, FOB, CFR, CIF, CPT, DAP, DDP and others.
Why it matters
Two quotes with different incoterms are not comparable. FOB is the most common for Alibaba orders.
Also called Initial production check
Check of raw materials and components before mass production starts.
Why it matters
Confirms the factory bought the material you specified.
Also called Letter of credit
A bank guarantee to pay the supplier when documents proving shipment are presented.
Why it matters
Strong protection for large orders; costly and slow for small ones. Suppliers may add 2-4% for L/C at sight.
Also called Compliance testing
Laboratory tests against regulations and standards: CE, RoHS, REACH, EN 71, FCC, UL, FDA, CPSIA and others.
Why it matters
Required to legally sell many products. Insist on test reports for your specific product, not a similar one.
Also called Less than container load
Sharing a container with other shippers; priced per CBM.
Why it matters
Right below roughly 15 CBM. Adds consolidation time and destination handling fees.
Days from deposit receipt (or PI signature) to cargo-ready date.
Why it matters
Quoted lead times rarely include holidays or material procurement. Add buffer, especially before CNY and Golden Week.
The outer shipping box containing multiple retail units or inner boxes.
Why it matters
Size and count drive CBM, freight cost and drop-test performance. Specify dimensions and print.
Also called Minimum order quantity
The smallest quantity a supplier will produce or sell per order or per SKU.
Why it matters
Almost always negotiable for a trial order at a higher unit price. Ask whether the MOQ is per colour/size or total.
Also called SDS, Safety data sheet
Document describing hazards of chemicals, batteries and some materials, required by carriers.
Why it matters
Lithium batteries also need UN38.3; without it carriers refuse the cargo.
Also called Original design manufacturer
The factory's own design, sold under your brand, often with small modifications.
Why it matters
Fast and cheap to launch, but the same product is sold to your competitors. Ask about exclusivity.
Also called Original equipment manufacturer
The factory makes a product to your design and branding.
Why it matters
Requires clear specs, tooling ownership terms, and an NDA if the design is yours.
Itemised list of cartons, contents, quantities, weights and dimensions.
Why it matters
Customs and your warehouse both check against it.
Also called PPS
A sample made with production materials and tooling before mass production starts.
Why it matters
Catches mould and material issues before thousands of units are made.
An existing factory product with your logo and packaging.
Why it matters
Lowest MOQ and tooling; least differentiation.
Also called PI
The supplier's formal quotation that, once signed, acts as the order contract: product, specs, quantity, price, terms, dates, bank details.
Why it matters
Everything you want to enforce later must be written in the PI. Check bank details against the business licence.
Also called Pre-shipment inspection
Inspection of finished, packed goods (80-100% complete) by a third party before shipment, using AQL sampling plus function, packaging and marking checks.
Why it matters
Your last chance to reject before paying the balance. Costs about USD 250-350 per inspector-day.
Percentage of buyer inquiries the supplier replied to within the platform's time window, shown on the profile.
Why it matters
Slow replies now predict slow replies when your order has a problem.
Also called Request for quotation
A structured request sent to multiple suppliers describing the product, specifications, quantities and terms, asking for a price.
Why it matters
A precise RFQ produces comparable quotes and tells suppliers you know what you are doing.
Printed information on the master carton: PO, item, carton number, quantity, gross/net weight, dimensions, destination.
Why it matters
Wrong marks cause warehouse mis-counts and customs holds.
The supplier outsources part or all of your order to another factory.
Why it matters
Common and often invisible. Ask to inspect where production actually happens.
Also called Telegraphic transfer, Wire transfer
A bank wire transfer. 'T/T 30/70' means 30% deposit and 70% balance, usually against the copy of the bill of lading.
Why it matters
The standard Alibaba payment structure. Never pay 100% upfront on a first order.
Electronic release of the bill of lading by the carrier so the consignee can collect goods without the original paper B/L.
Why it matters
Saves courier time; the supplier will only instruct it after receiving the balance.
A laboratory document showing a specific product passed specific tests on a specific date.
Why it matters
Check the report number on the lab's website; forged reports are common.
Also called Mould, Mold
One-off equipment (injection moulds, dies, jigs) made to produce your part.
Why it matters
Confirm in writing who owns the tooling and that it can be moved to another factory. Amortise the cost per unit in landed costs.
Alibaba's order-protection programme. When you place and pay for an order on the platform, Alibaba holds the supplier accountable for on-time shipment and product quality as written in the order contract.
Why it matters
It is your main recourse if goods are late, wrong or never arrive. A supplier who refuses Trade Assurance is removing your protection.
Also called Verified
A supplier whose company, premises and production capabilities have been checked on-site by a third-party inspection company such as SGS, TÜV or Intertek.
Why it matters
Confirms the company exists and has the facilities it claims. It does not certify product quality.