Sourcing Glossary
Essential terms and definitions for product sourcing, procurement, international trade, and logistics.
3PL (Third-Party Logistics)
A company that provides outsourced logistics services including warehousing, transportation, and distribution.
Bill of Lading (B/L)
A legal document issued by a carrier that details the type, quantity, and destination of goods being shipped.
Canton Fair
China's largest import and export fair, held twice yearly in Guangzhou, showcasing products from thousands of manufacturers.
Certificate of Origin (CO)
A document that certifies the country in which goods were manufactured, often required for customs clearance.
CIF (Cost, Insurance, and Freight)
A trade term where the seller pays for shipping and insurance to deliver goods to the buyer's port.
Compliance Testing
Testing to ensure products meet regulatory standards and safety requirements for specific markets.
Container Loading Inspection
Quality control inspection performed during the loading of goods into shipping containers.
Due Diligence
The investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement.
Ex-Works (EXW)
A trade term where the buyer is responsible for all transportation costs and risks from the seller's premises.
Factory Audit
Comprehensive evaluation of a manufacturing facility's capabilities, quality systems, and compliance standards.
FOB (Free On Board)
A trade term where the seller is responsible for goods until they are loaded onto a shipping vessel.
Freight Forwarder
A company that organizes shipments for individuals or companies by coordinating with carriers.
Incoterms
International Commercial Terms that define the responsibilities of buyers and sellers in international trade.
Lead Time
The time between placing an order and receiving the finished goods.
Letter of Credit (L/C)
A payment method where a bank guarantees payment to a seller upon meeting specified terms and conditions.
MOQ (Minimum Order Quantity)
The smallest quantity of goods a supplier is willing to produce or sell in a single order.
OEM (Original Equipment Manufacturer)
A company that manufactures products that are sold under another company's brand name.
ODM (Original Design Manufacturer)
A company that designs and manufactures products that are sold under another company's brand.
Pre-production Sample
A sample made before mass production to verify design, materials, and manufacturing quality.
Private Label
Products manufactured by one company for sale under another company's brand name.
Procurement
The process of finding, agreeing terms, and acquiring goods, services, or works from an external source.
Production Sample
A sample taken from actual production to verify quality and conformance to specifications.
Purchase Order (PO)
A commercial document issued by a buyer to a seller indicating types, quantities, and agreed prices for products.
Quality Control (QC)
Procedures and activities designed to ensure products meet specified quality requirements.
RFQ (Request for Quotation)
A business process in which a company solicits quotes from suppliers for specific products or services.
SKU (Stock Keeping Unit)
A unique identifier assigned to each distinct product and service that can be purchased.
Supplier Assessment
Evaluation of a supplier's capabilities, quality systems, financial stability, and compliance standards.
Supply Chain
The network of organizations, people, activities, information, and resources involved in moving products from supplier to customer.
Tech Pack
A comprehensive document containing all technical specifications, measurements, and construction details for manufacturing a product.
Trade Assurance
A service that protects buyers' payments and ensures suppliers meet their obligations according to the contract.
Vendor Managed Inventory (VMI)
A supply chain practice where the supplier manages inventory levels based on agreed-upon criteria.
White Label
Products manufactured by one company and rebranded by other companies to make it appear as their own.
Need More Information?
Can't find the term you're looking for? Our sourcing experts can explain any aspect of international trade and sourcing. Contact us for personalized guidance.