10 China Sourcing Terms You Should Know


For those new to China sourcing, some of the lingo can seem confusing. In this blog, we’ll summarize the top 10 terms most commonly used in supply chain management that all importers should know.

Glossary of Sourcing Terms:

1. Blanket Order: This is a purchase order in which the buyer places multiple orders with multiple delivery dates over a period of time to take advantage of set pricing.

2. CIF: Stands for Cost, Insurance and Freight. This expense is usually paid by the seller to cover the costs, insurance and freight while the order is in transit. Once the goods are loaded at the designated port, the buyer becomes responsible for this cost

3. FCL/LCL: Full Container Load – Refers to shipments where the full container of goods belongs to one buyer. This is generally less expensive than LCL. For FCL, you usually pay a flat fee as opposed to paying for the space that you use within a container. Less than Container Load (LCL) refers to small shipments that do not require a full container capacity of goods to be shipped and is usually more expensive than a full container.

4. FOB: Free On Board – Refers to the point at which the buyer becomes responsible for the goods being transported in a given vessel.

5. ISS: Inspection Specification Sheet describes, in detail, how the product should be tested, and the expected quality.

6. Landed Cost: The total cost after goods have arrived at their final destination (usually the importers warehouse). This includes order price, freight, taxes, duties and fees.

7. PSI: Production, Sales and Inventory report compares the planned productionrate to the sales This allows successful planning for production, sale and inventory rates.

8. PSS: The Product Specification Sheet details all product specifications – what it looks like, what it feels like, how it functions, measurements, materials, etc.

9. RFQ: The Request For Quotation is a document that details all order details to include the product specifications, target price, expected delivery date, etc. This document should be uniform and is usually presented to multiple suppliers to receive detailed quotations and ensures the same information is furnished to all potential suppliers.

10. Waybill: This is a document issued by the shipping carrier to acknowledge receipt of the goods being transported, and serves as a receipt for the This document also indicates the shipments’ destination address and includes contact information for the recipient/buyer. 

Being aware of the above terms can help ensure importers know what to expect. Are there other supply chain management terms you would like us to define or explain? Share them with us in the comments below!


By Jocelyn Trigueros


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