Glossary

General

Product Specification

Document summarizing all relevant product data, including the Bill of Materials (BoM), design files, logo/label/artwork files, dimensions, standards, and other relevant product information.

Bill of Materials (BoM)

A BoM lists all components and materials, and their respective quantity, on a per-unit basis. The BoM also specifies dimensions, colors and other information relevant for each listed material/component.

OEM Product

Generally referring to a custom-designed product or any product which requires custom molds or other tooling.

ODM Product

Generally referring to factory standard or private label product made using the supplier’s existing molds or other tooling.

RFQ

A Request for Quotation (RFQ) refers to the process of contacting suppliers to request price quotations and other information.

MOQ

The Minimum Order Quantity (MOQ) is the lowest quantity of goods a supplier is able or willing to sell on a per order, product, material or color basis. For example, a MOQ set at 500 pcs means that the buyer must buy at least 500 pcs, or the supplier does not accept the order.

Product Compliance

Product Regulations

Product regulations may cover mandatory safety standards, certification/document requirements, chemicals, and heavy metals restrictions, labeling requirements and lab testing requirements. Some product regulations apply to specific products or age groups, while others apply to all consumer products sold in a state, country or common market. Examples include CPSIA and the Low Voltage Directive.

Product Standards

A mandatory or voluntary standard that defines safety, quality and/or technical aspects of a product. Examples include EN 71 and ASTM F963.

Substance Regulations

Restricts certain chemicals, heavy metals and/or pollutants in all or certain products or products for specific age groups. Examples include REACH and California Proposition 65.

Certification/Document Requirements

Refers to documents and/or certificates which the importer must either obtain from a third party or self-issue. Examples include the Declaration of Conformity and Children’s Product Certificate.

Labeling Requirements

Refers to mandatory product labels and printed information. Examples include the CE mark, country of origin, warning labels, and user instructions.

Testing Requirements

Refers to mandatory and voluntary third-party lab testing requirements. Some regulations also set requirements for testing frequency and reporting.

Compliance Track Record

Refers to the supplier’s existing test reports and other relevant compliance documents, which are necessary when assessing a supplier’s capability to manufacture products in compliance with applicable product regulations and/or safety standards.

Suppliers

Alibaba.com

The world’s largest supplier directory, headquartered in Mainland China. Most suppliers on Alibaba.com are also based in Mainland China, but it’s also used by suppliers located in Vietnam, India, Thailand, and elsewhere in Asia. All Gold Suppliers are verified as registered companies.

Global Sources.com

Globalsources operates the world’s 2nd largest supplier directory and hosts trade shows in Hong Kong. All non-free members are verified as registered companies.

Supplier Directory

A databank of suppliers, together with contact details and product listings. There are many supplier directories in Asia, but Alibaba.com and Globalsources.com are considered the most relevant options.

Supplier Location

The city and province where the supplier is registered and operating.

Registered Address

The official place of operations. This may be the address of their registered office, rather than the production facility.

Registered Capital

The amount of share capital, which may include liquid and non-liquid assets, such as machinery. The registered capital can help you understand the supplier’s scale. Companies with very low registered capital (e.g. RMB 30,000 – 100,000) are often trading companies or agents. Suppliers with more registered capital (e.g. more than RMB 5,000,000) tend to be manufacturers.

Registered Business Scope

Defines the scope of operations for a company, which can be used to determine whether a supplier is a manufacturer specialized in the relevant products.

Business License

All registered companies in China, Vietnam, and other countries in the region have a business license. This document may include information about the company, such as their company name, registered capital, business scope, name of the legal representative, year of registration and registered address.

Quality Management System (QMS)

A QMS is a set of business processes intended to prevent and manage the occurrence of defects throughout the production process. Examples include ISO 9001

Corporate Social Responsibility (CSR)

A CSR Certificate and/or Social Compliance Audit Report indicates that the supplier operates according to certain standards, in terms of labor and workplace conditions. Examples of CSR organizations include BSCI and Sedex.

Finance and payments

Telegraphic Transfer (T/T)

Standard wire transfer payment method.

Letter of Credit (L/C)

A credit letter that withholds the payment until the supplier has fulfilled a pre-determined list of conditions. Once these conditions are fulfilled, the money is automatically released.

RMB

China’s national currency, which is sometimes called the Chinese Yuan (CNY).

HKD

The HKD is used in Hong Kong S.A.R. It is pegged to the United States Dollar (USD).

Shipping

Incoterms

A standardized system for the division of responsibility for transportation, between the buyer and the seller. For example, FOB (Free on Board) only includes shipping to the local port of loading while DAP (Delivered at Place) includes shipping (and all incurred fees) to the buyer’s address. As a price is always quoted based on a specified incoterm, it affects the price quoted by suppliers. Hence, a DAP quote is always more expensive than a FOB quote.

FCL

Full Container Load (FCL) refers to full container shipments that are booked by one importer (consignee).

LCL

Less than Container Load (LCL) refers to container shipments that are booked by multiple importers (consignees)

Freight Forwarder

A company that manages the shipping and logistics procedures on behalf of their customers.

Bill of Lading (BL)

A document issued by the shipper to confirm that the cargo has been loaded. Includes information about the goods, the shipper and the importer.

Commercial Invoice (CI)

A document that specifies the value of the goods. This document may be used for customs clearance.

Packing List (PL)

A document that specifies the quantity of goods.

Country of Origin Certificate

A document that states the origin of certain goods. This document can be used when applying for reduced import duty rates.