China Sourcing Glossary: Terms Every Importer Needs to Know

Supplier conversations, shipping quotes, and customs forms are full of abbreviations that aren’t explained anywhere. This glossary covers every term you’ll run into when importing electronics from China.

A

AQL (Acceptable Quality Limit) A statistical sampling standard (ISO 2859-1) used in product inspections. Defines how many units an inspector samples from a batch and how many defects are acceptable before the batch is rejected. AQL 2.5 for major defects is the most common standard for consumer electronics. See our quality control guide for how it works in practice.

B

B2B (Business to Business) Trade between businesses, as opposed to retail sales to end consumers. Alibaba and 1688 are B2B platforms. DHgate is B2B/B2C hybrid.

BEC (Business Email Compromise) A fraud scheme where attackers intercept supplier email threads and substitute fake bank account details. One of the most common ways importers lose money on wire transfers. Always verify bank details by video call before any new transfer.

BPP (Buyer Protection Program) DHgate’s system for handling payment disputes. Covers non-delivery and items significantly different from the listing.

C

Canton Fair The world’s largest trade fair, held in Guangzhou twice a year (spring and autumn). Phase 1 (electronics) runs in April. Direct access to thousands of Chinese factories.

CBM (Cubic Meter) The volume measurement used for sea freight. Calculated as length x width x height in meters. LCL freight is billed per CBM or per metric ton, whichever is greater. See our cost calculator for the formula.

CBP (Customs and Border Protection) The US federal agency that enforces import rules, collects duties, and can hold or seize non-compliant shipments at the border.

CE Marking A conformity mark required to sell products in the European Union. CE is self-declared by the manufacturer for most categories. It does not satisfy FCC requirements for the US market.

CIF (Cost, Insurance, and Freight) An Incoterm where the supplier covers ocean freight and marine insurance to the destination port. You take over from there. Convenient but the supplier often marks up freight 10% to 30%. See our Incoterms guide.

Customs Broker A licensed professional who files customs entries, classifies goods, pays duties, and handles CBP paperwork on your behalf. Costs $150 to $500 per shipment. Required for any formal entry over $2,500. Strongly recommended for all first orders.

D

DDP (Delivered Duty Paid) An Incoterm where the supplier handles everything including import duties. Convenient but risky — suppliers sometimes undervalue goods on customs forms, leaving you liable. See our Incoterms guide.

De Minimis The threshold below which imports enter without duties. The $800 de minimis exemption was eliminated for Chinese goods on May 2, 2025. All shipments from China now pay full applicable duties regardless of value.

DPI (During-Production Inspection) A quality check conducted when 20% to 30% of an order is finished. Catches problems early while there’s still time to fix the remaining production.

E

EIN (Employer Identification Number) A US tax ID number issued by the IRS. Required for customs filings as an importer. If you’re a business, use your EIN. Sole proprietors can use a Social Security Number.

EXW (Ex Works) An Incoterm where the supplier’s responsibility ends at their factory door. You arrange everything: factory pickup, export customs in China, freight, US customs, and delivery. Maximum control, maximum responsibility.

F

FBA (Fulfillment by Amazon) Amazon’s service where they store and ship your inventory. FBA fees typically run $3 to $5 per unit for small electronics. A significant cost to include in margin calculations.

FCC ID A certification mark required on any device that intentionally emits radio frequency signals (Bluetooth, WiFi, cellular). Assigned after testing by an FCC-accredited lab and review by a Telecommunications Certification Body. Required to legally sell or import wireless electronics in the US.

FCL (Full Container Load) Renting an entire shipping container. A 20-foot container holds roughly 25 to 28 CBM. Cheapest per-unit shipping option but only makes sense at significant volume.

FOB (Free on Board) The most common Incoterm for importing from China. The supplier covers trucking to the Chinese port and export customs. You cover ocean or air freight from the port, US customs, and delivery. Risk transfers when goods are loaded onto the vessel.

Formal Entry A customs entry required for commercial shipments valued over $2,500. Filed by a licensed customs broker using CBP Form 7501.

G

Gold Supplier A legacy Alibaba supplier badge that indicated paid membership. Alibaba phased it out in 2021. Don’t rely on it as a trust signal.

gsxt.gov.cn China’s National Enterprise Credit Information Publicity System. A public database where you can look up any Chinese company’s business registration, legal status, and business scope. Free to use.

Guanxi The Chinese concept of relationship-based business trust. Suppliers who see you as a reliable long-term partner give better pricing and prioritize your orders. Relevant to how you approach negotiation. See our negotiating guide.

H

HTS Code (Harmonized Tariff Schedule) An international product classification system. Your HTS code determines your import duty rate. Electronics fall mostly under Chapters 84 and 85. Look up codes at hts.usitc.gov.

I

IEEPA Tariff A 10% tariff on Chinese goods imposed in 2025 under the International Emergency Economic Powers Act. Separate from Section 301 tariffs. Currently extended through November 2026.

Importer of Record The legal entity responsible for a shipment entering the US. You’re on the hook for correct classification, duty payment, and compliance even if your supplier made a mistake.

Incoterms International Commercial Terms published by the ICC. Define who pays freight and who bears risk at each point in the shipping process. Current version is Incoterms 2020. The ones that matter most: EXW, FOB, CIF, DDP.

ISF (Importer Security Filing) Also called 10+2. Required for all ocean freight shipments entering the US. Must be filed at least 24 hours before cargo is loaded onto the vessel in China. Late or missing filings carry $5,000 penalties per violation.

L

LC (Letter of Credit) A bank-issued payment guarantee. Your bank promises to pay the supplier once they present correct shipping documents. Strong protection on large off-platform orders. Costs 0.5% to 2% of transaction value plus fees.

LCL (Less than Container Load) Sharing container space with other importers. You pay only for the space you use, billed per CBM. The standard choice for small and mid-size importers. See our shipping guide.

Landed Cost The total cost to get goods from the factory to your warehouse. Includes FOB price, freight, insurance, customs duties, broker fees, and delivery. Usually 40% to 80% higher than FOB price for electronics from China.

M

MOQ (Minimum Order Quantity) The minimum number of units a supplier will accept in one order. MOQs on Alibaba for electronics typically range from 50 to 500 units. Often negotiable if you offer a slightly higher per-unit price.

O

ODM (Original Design Manufacturer) A factory that designs and manufactures products that buyers sell under their own brand. You pick from their catalog and add your logo. Less expensive than OEM custom development.

OEM (Original Equipment Manufacturer) A factory that manufactures products to your specifications. You provide the design; they build it. More control and differentiation but higher development costs and longer lead times.

P

PI (Proforma Invoice) A formal document from your supplier outlining product specs, quantity, price, payment terms, and lead time before final order confirmation. Get one signed before sending any money.

PPI (Pre-Production Inspection) A quality check conducted before manufacturing starts. Verifies the factory has the correct materials and components on hand. Often skipped and often regretted.

PSI (Pre-Shipment Inspection) A quality check conducted when 80% to 100% of an order is finished and ready to ship. The inspector samples finished goods and compares them to your spec sheet. Standard cost: $250 to $350. See our quality control guide.

Q

QIMA A major third-party inspection company with strong presence in China. Online booking, transparent all-in pricing, 24 to 48 hour reports. Approximately $309 per inspector-day in China.

R

RFQ (Request for Quotation) A formal request you send to suppliers asking for pricing on a specific product and quantity. Alibaba has a built-in RFQ system. Sending the same RFQ to 5 to 8 suppliers and comparing responses is one of the most effective ways to establish market pricing.

RoHS Restriction of Hazardous Substances Directive. A European regulation limiting the use of certain hazardous materials in electronics. Your supplier should provide a RoHS compliance declaration. Not a US requirement, but many US buyers and retailers ask for it.

S

SAMR (State Administration for Market Regulation) China’s national business registry. Their public database at gsxt.gov.cn lets you verify any Chinese company’s registration, business scope, and status for free.

SDoC (Supplier’s Declaration of Conformity) The FCC authorization type for unintentional radiators (wired electronics that don’t intentionally emit RF). The manufacturer tests and self-declares compliance. Simpler and cheaper than FCC ID Certification.

Section 301 Tariffs Additional import duties on Chinese goods imposed by the USTR starting in 2018. Rates range from 7.5% to 25% depending on product category. Consumer electronics typically fall at 7.5% to 25% on top of base duty rates. Check the current rate for your specific HTS code.

SGS The world’s largest inspection, verification, testing, and certification company. More enterprise-focused than QIMA or V-Trust.

Sourcing Agent A China-based person or company who finds suppliers, negotiates prices, manages communication in Chinese, handles quality checks, and arranges shipping on your behalf. Especially useful for 1688.com where direct access is difficult. Fees typically run 5% to 10% of order value.

SWIFT The international bank messaging network used for wire transfers (T/T). Transfers via SWIFT typically take 1 to 5 business days.

T

T/T (Telegraphic Transfer) A standard international bank wire transfer. The most common payment method in China sourcing for established relationships. No built-in buyer protection once the transfer completes.

Trade Assurance Alibaba’s payment escrow and dispute resolution system. Funds are held until you confirm receipt or a dispute is resolved. Quality protection covers up to $30,000 per order. Must pay through Alibaba’s platform to qualify.

Trading Company A company that buys from factories and resells to buyers like you. Different from a manufacturer. Trading companies typically mark up factory prices 15% to 30%. Not always bad — they handle English communication, have lower MOQs, and can aggregate multiple products. See our manufacturers vs trading companies guide.

U

UL (Underwriters Laboratories) An independent safety certification organization. UL listing isn’t a federal legal requirement, but Amazon and most major retailers require it for electronics categories including power banks, chargers, and products with lithium batteries.

USTR Office of the United States Trade Representative. The agency that administers Section 301 tariffs. Use their tariff lookup at hts.usitc.gov to find your specific rate.

V

Verified Supplier An Alibaba badge indicating a third-party agency physically visited the factory and confirmed its facilities and business license. More meaningful than Gold Supplier but still not a guarantee of quality or reliability.

V-Trust A China-focused inspection company. Competitive pricing, often $200 to $300 for basic factory audits. Well-regarded for consumer electronics and consumer goods inspections.

W

Wise A money transfer service (formerly TransferWise) that sends international payments at real exchange rates with low fees. Cheaper than bank wires for regular payments. Same risk profile as T/T — no buyer protection built in.

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