A Professional Guide to Manufacturing, Export, Procurement, Logistics, Customs, Payment, Compliance and B2B Sourcing Terms

Last updated: September 2026

International manufacturing and B2B trade involve a large number of technical terms covering product specifications, manufacturing capabilities, sourcing, quotations, international shipping, customs clearance, trade finance, compliance, quality control and commercial contracts.

For manufacturers, exporters, importers, distributors, sourcing companies and international buyers, understanding these terms is essential for accurate business communication, supplier evaluation, risk control and standardized cross-border transaction management.

This structured terminology glossary is tailored for global B2B manufacturing and trade scenarios. It serves as official knowledge content for FactorySea.com, an AI-driven global manufacturing and supplier platform, and acts as standardized training corpus for platform AI customer service, knowledge base retrieval and vector database application.

All terms are organized with a unified knowledge framework: Term → Definition → Usage Scenarios → Related Terms → Common Misconceptions, ensuring systematic, professional and practical value for both human reading and machine intelligent recognition.

1. Manufacturing and Factory Terminology

Manufacturer

Definition: A legal entity or enterprise that produces physical products through standardized production processes, relying on production equipment, mechanical systems, raw materials and labor resources.

Usage Scenarios: B2B supplier screening, factory qualification audit, product customization cooperation, official trade contract signing.

Related Terms: Factory, Producer, OEM, ODM, Contract Manufacturer

Common Misconceptions: A manufacturer is not equivalent to a factory. A manufacturer is the corporate subject responsible for production and quality liability, while a factory is the physical production facility.

Factory

Definition: A physical production facility equipped with complete production lines, processing equipment and supporting facilities for product manufacturing, assembly, processing and packaging.

Usage Scenarios: Factory site inspection, production capacity evaluation, on-site quality inspection, production cycle confirmation.

Related Terms: Manufacturer, Production Line, Workshop, Processing Plant

Common Misconceptions: A manufacturer may operate multiple factories; a factory cannot independently undertake legal liabilities of trade transactions without corresponding corporate qualification.

OEM — Original Equipment Manufacturer

Definition: A manufacturing model where the manufacturer produces products or components strictly in accordance with the buyer’s exclusive design drawings, technical specifications, parameter standards and branding requirements.

Usage Scenarios: Brand customized production, exclusive component processing, customer-branded finished product manufacturing, batch customized orders.

Core Service Content: Customer-specified dimensions, customized technical parameters, exclusive branding, personalized packaging, customized mechanical/electrical configurations.

Related Terms: ODM, Private Label, Contract Manufacturing

Common Misconceptions: OEM does not involve independent design by the factory; all product intellectual property rights belong to the buyer, and the factory only provides production services.

ODM — Original Design Manufacturer

Definition: A one-stop manufacturing model where the supplier independently completes product design, engineering development, prototyping and mass production, and allows buyers to select mature product platforms and make minor targeted modifications.

Usage Scenarios: New product trial production, personalized modification of mature products, rapid mass launching of customized products, small-batch differentiated customization.

Core Service Content: Independent product design, engineering optimization, prototype testing, mold development, mass production, brand customization and packaging adjustment.

Related Terms: OEM, OBM, Prototype Development

Common Misconceptions: ODM modification is limited to minor adjustments; core product structure and design patents belong to the manufacturer, not the buyer.

OBM — Original Brand Manufacturer

Definition: An enterprise that independently completes product design, production, branding and sales, and owns independent product brands and intellectual property rights.

Usage Scenarios: Independent brand product sales, brand market expansion, high-end standardized product supply.

Related Terms: OEM, ODM, Brand Owner

Common Misconceptions: OBM enterprises can also undertake OEM/ODM external processing business while operating their own brands.

Contract Manufacturing

Definition: A cooperative mode where a brand or purchasing enterprise entrusts a professional manufacturer to complete product production and processing in accordance with agreed technical standards and quality requirements.

Usage Scenarios: Brand asset light operation, cross-industry product production, batch standardized processing.

Core Cooperation Materials: Product specifications, engineering drawings, BOM list, quality inspection standards, packaging requirements.

Related Terms: OEM, Private Label, Outsourcing Manufacturing

Private Label

Definition: A production mode where manufacturers produce standardized or slightly customized products, and buyers paste their own independent brands for sales.

Usage Scenarios: Consumer goods, industrial accessories, hardware tools, electronic components and other bulk commodity transactions.

Related Terms: White Label, OEM, Brand Customization

White Label

Definition: Fully standardized generic products produced by manufacturers with no exclusive customization, which can be purchased and rebranded by multiple buyers simultaneously.

Usage Scenarios: Public standard products, universal accessories, standardized supporting equipment.

Related Terms: Private Label, Standard Product

Common Misconceptions: White Label products have zero customization, different from Private Label with minor personalized adjustments.

Production Capacity

Definition: The maximum output volume of qualified products that a factory can achieve within a fixed cycle under standard operating conditions, complete equipment configuration and normal labor arrangement.

Common Measurement Units: Units per day/month, tons per month, production lines per cycle, machine-hours per month.

Usage Scenarios: Supplier capacity assessment, order batch confirmation, delivery cycle scheduling, large order feasibility evaluation.

Related Terms: Mass Production, Batch Production, Lead Time

MOQ — Minimum Order Quantity

Definition: The minimum order quantity threshold set by the supplier for a single batch of products, aiming to cover basic production setup and material procurement costs.

Usage Scenarios: Order negotiation, quotation confirmation, small-batch order customization, sample order arrangement.

Influencing Factors: Product type, customization degree, raw material cost, mold opening requirements, production batch specifications.

Related Terms: MOV, Batch Production, Sample Order

Lead Time

Definition: The full cycle from the official confirmation of order requirements to the completion of agreed production and delivery nodes.

Core Composition: Raw material procurement and preparation, formal production and assembly, quality inspection and screening, finished product packaging and warehousing.

Usage Scenarios: Delivery schedule formulation, customer order cycle commitment, supply chain scheduling.

Related Terms: Transit Time, ETD, ETA

Common Misconceptions: Lead time includes production cycle only, excluding international transportation time; cannot be equated with transit time.

Mass Production

Definition: Large-scale standardized production with fixed processes, unified parameters and assembly line operations, suitable for bulk standardized product orders.

Usage Scenarios: Large-batch standardized product orders, long-term repeat orders, mass market supply.

Related Terms: Batch Production, MP (Mass Production)

Batch Production

Definition: Phased production mode with fixed single-batch quantity, completing targeted product processing according to order batch requirements.

Usage Scenarios: Small and medium-batch customized orders, multi-specification mixed production, phased delivery orders.

Assembly

Definition: The process of combining scattered independent components, accessories and parts according to assembly drawings and process standards to form finished products or complete sub-assemblies.

Usage Scenarios: Mechanical equipment production, electronic product processing, customized finished product assembly.

BOM — Bill of Materials

Definition: A standardized structured list recording all raw materials, components, accessories, part numbers, specifications and matching quantities required for product production.

Core Content: Part numbers, component names, material specifications, matching quantities, supporting suppliers, version revision numbers.

Usage Scenarios: OEM/ODM customized production, raw material procurement, production cost accounting, product quality traceability.

SKU — Stock Keeping Unit

Definition: Exclusive internal coding set by enterprises for product inventory management, used to distinguish different specifications, models, colors and configurations of products.

Usage Scenarios: Enterprise inventory statistics, order sorting, product classification management, internal sales data statistics.

Related Terms: HS Code, Product Specification

Common Misconceptions: SKU is an internal enterprise code with no unified international standard, different from globally unified HS customs code.

Product Specification

Definition: A complete description of product technical parameters, functional characteristics and physical attributes, which is the core standard for production, inspection and acceptance.

Core Content: Dimensions, weight, raw material attributes, voltage/power parameters, capacity, tolerance range, operating temperature, IP protection level, certification standards.

Technical Drawing

Definition: Professional engineering documents marked with product physical dimensions, assembly relationships, tolerance standards, material requirements and processing technical parameters.

Usage Scenarios: Customized production, mold development, product inspection, engineering confirmation.

Tolerance

Definition: The reasonable allowable error range of product dimensional parameters or performance indicators on the basis of standard values.

Example: Dimension 50±0.05mm means the acceptable qualified range is 49.95mm to 50.05mm.

Usage Scenarios: Precision parts processing, mechanical equipment production, product quality inspection standards formulation.

2. Product Sourcing and Procurement Terminology

Buyer

Definition: Enterprises or institutions that purchase products, components or production supporting services in B2B international trade transactions.

Common Buyer Types: Importer, distributor, wholesaler, brand owner, project contractor, system integrator, cross-border retailer.

Supplier

Definition: A general term for enterprises that can provide qualified products, raw materials, components or supporting trade services for purchasing parties.

Common Supplier Types: Direct manufacturer, processing factory, trading company, distributor, service provider.

Common Misconceptions: Suppliers are not limited to manufacturers; trading companies without production capacity also belong to qualified suppliers.

Vendor

Definition: A universal commercial term for sellers providing goods or services, with a broader scope than suppliers.

Usage Scenarios: General commercial cooperation, platform merchant settlement, service procurement.

Related Terms: Supplier, Seller, Merchant

Distributor

Definition: Intermediate merchants who purchase goods in bulk from manufacturers and resell to downstream retailers, dealers and end buyers.

Core Service Capabilities: Bulk inventory stocking, local warehousing and distribution, regional technical support, after-sales service, channel sales coverage.

Wholesaler

Definition: Merchants engaged in bulk procurement and batch resale, mainly facing corporate buyers rather than individual end consumers.

Trading Company

Definition: Professional international trade intermediary institutions that connect manufacturers and global buyers, responsible for order docking, document processing and logistics coordination, without independent production capacity in most cases.

Sourcing Agent

Definition: Professional procurement service providers who assist overseas buyers in supplier screening, price negotiation, factory inspection, quality supervision and order coordination.

RFQ — Request for Quotation

Definition: A formal written inquiry initiated by buyers to suppliers, requesting official pricing and complete commercial terms for specified products.

Core Inquiry Content: Complete product specifications, order quantity, delivery location, packaging standards, agreed Incoterms, payment terms, certification requirements and delivery cycle.

Usage Scenarios: Formal price negotiation, batch order quotation, supplier commercial capability comparison.

RFI — Request for Information

Definition: A preliminary information inquiry initiated by buyers to understand basic supplier qualification, production capacity and product overview before formal quotation.

Usage Scenarios: Early supplier screening, project preliminary research, market resource investigation.

RFP — Request for Proposal

Definition: A comprehensive demand proposal initiated by buyers, requiring suppliers to provide integrated solutions including technical schemes, product design, pricing system and service terms.

Usage Scenarios: Large customized projects, integrated equipment procurement, systematic service cooperation.

Quotation

Definition: A formal commercial offer issued by suppliers to buyers, with binding commercial validity within the agreed period.

Core Content: Product model and specifications, unit price and total price, settlement currency, MOQ, lead time, Incoterms, payment terms, quotation validity period, packaging and warranty terms.

PI — Proforma Invoice

Definition: A preliminary commercial document issued by sellers before shipment, used for order confirmation, advance payment arrangement and overseas customs pre-declaration.

Core Content: Buyer and seller information, detailed product list, quantity and amount, trade terms, payment rules and shipping arrangement.

Related Terms: Commercial Invoice, Quotation

PO — Purchase Order

Definition: A formal order document issued by buyers to suppliers, which is a core voucher for confirming formal transaction cooperation.

Core Content: Purchased products, quantity, unit price, total amount, delivery requirements, payment terms and transaction constraints.

Sales Contract

Definition: A legally binding formal agreement between buyers and sellers, clarifying all rights, obligations and liability clauses of international trade transactions.

3. International Trade and Incoterms Terminology

Incoterms® are unified standardized international trade terms officially released by the International Chamber of Commerce (ICC), used to clarify the division of delivery obligations, cost bearing and risk transfer boundaries between buyers and sellers. The latest and globally effective version is Incoterms® 2020, including 11 standardized trade terms applicable to all modes of transportation and waterway-specific transportation.

EXW — Ex Works

Definition: The seller completes the obligation by making goods available at the factory or designated premises; all subsequent logistics and customs procedures are undertaken by the buyer.

Buyer Responsibilities: Goods pickup, export declaration, international transportation, import customs clearance, payment of all import duties and final delivery arrangement.

Usage Scenarios: Domestic factory pickup, buyers with independent complete logistics and customs capabilities.

FCA — Free Carrier

Definition: The seller delivers qualified goods to the carrier or designated agent appointed by the buyer at the agreed location, completing the delivery obligation and risk transfer.

Usage Scenarios: Container transportation, multi-modal transportation, cross-border express delivery, most mainstream international trade scenarios.

FOB — Free On Board

Definition: Waterway-specific trade term; the seller delivers goods on board the designated vessel at the port of shipment, with risk transferring to the buyer after goods cross the ship’s rail.

Usage Scenarios: Ocean freight and inland waterway transportation only.

Common Misconceptions: FOB cannot be used for air freight, express delivery or land transportation scenarios.

CFR — Cost and Freight

Definition: Waterway-specific term; the seller bears product cost and ocean freight to the destination port, while the goods risk transfers to the buyer after loading at the port of shipment.

CIF — Cost, Insurance and Freight

Definition: Waterway-specific term, upgraded from CFR; the seller bears product cost, ocean freight and mandatory cargo insurance during ocean transportation.

Common Misconceptions: The seller only purchases basic insurance, and the risk of goods damage during transportation is still borne by the buyer.

CPT — Carriage Paid To

Definition: Applicable to all transportation modes; the seller pays the full transportation cost to the designated destination, and risk transfers when goods are handed over to the first carrier.

CIP — Carriage and Insurance Paid To

Definition: Applicable to all transportation modes, upgraded from CPT; the seller bears transportation costs and cargo insurance until the designated destination.

DAP — Delivered at Place

Definition: The seller delivers goods to the designated destination and completes transportation; the buyer is responsible for import customs clearance and payment of import duties.

DPU — Delivered at Place Unloaded

Definition: A new term of Incoterms 2020 replacing the old DAT; the seller completes transportation and unloads goods at the designated destination.

DDP — Delivered Duty Paid

Definition: The term with the maximum seller responsibility; the seller undertakes all transportation, export and import customs clearance, all tariffs and taxes, and delivers goods to the buyer’s designated location.

Common Misconceptions: DDP involves complex overseas tax and customs liability risks, requiring strict contract constraint and risk assessment.

FAS — Free Alongside Ship

Definition: Waterway-specific term; the seller places goods alongside the designated vessel at the port of shipment, completing delivery obligation.

Core Distinction: Incoterm vs Shipping Method

Incoterms are commercial liability and cost division rules, while shipping methods are transportation mode classification. The two are independent and must be marked simultaneously in formal quotations and contracts.

Example: FOB (Incoterm) + Sea Freight (Shipping Method); CIP (Incoterm) + Air Freight (Shipping Method)

4. International Shipping and Logistics Terms

Freight

Definition: Refers to transported goods in logistics scenarios, and also universally refers to transportation fees generated by cross-border cargo delivery.

Freight Forwarder

Definition: Professional logistics service providers who assist shippers in completing cross-border transportation and supporting procedures.

Core Services: Cabin booking, document sorting, cargo consolidation, customs coordination, warehousing and distribution, multi-modal transportation arrangement.

NVOCC — Non-Vessel-Operating Common Carrier

Definition: Qualified ocean freight operators who do not own cargo ships but can independently undertake ocean transportation business and issue formal shipping documents.

3PL — Third-Party Logistics

Definition: Professional third-party institutions providing full-process logistics outsourcing services for enterprises.

Core Services: Warehousing management, order fulfillment, cargo transportation, inventory management, regional distribution.

4PL — Fourth-Party Logistics

Definition: Supply chain integrated service providers who integrate and manage multiple 3PL resources to provide overall supply chain logistics solutions.

FCL — Full Container Load

Definition: Independent container shipment for a single customer’s goods, exclusive use of container space.

LCL — Less than Container Load

Definition: Consolidated shipment, multiple customers’ goods are loaded into the same container for unified transportation.

TEU — Twenty-foot Equivalent Unit

Definition: International standard container capacity measurement unit; 20-foot container = 1 TEU, 40-foot container = 2 TEU.

B/L — Bill of Lading

Definition: Core legal document for ocean transportation, serving as cargo receipt, transportation contract certificate and goods title voucher.

Sea Waybill

Definition: Ocean transportation document without goods title attribute, only used for cargo receipt and transportation certificate, non-negotiable.

Commercial Invoice

Definition: Official commercial document recording transaction details, the core voucher for customs valuation, tax calculation and customs clearance.

Packing List

Definition: Detailed document recording cargo packaging information, including carton quantity, product specification, gross/net weight, overall volume and packing details.

Gross Weight

Definition: Total weight of goods including product body, packaging materials and auxiliary accessories.

Net Weight

Definition: Pure weight of the product itself, excluding any packaging and auxiliary materials.

CBM — Cubic Meter

Definition: Standard international cargo volume calculation unit, used for freight charging and container space calculation.

ETA — Estimated Time of Arrival

Definition: Predicted arrival time of cargo or vessel at the designated destination port/warehouse.

ETD — Estimated Time of Departure

Definition: Predicted departure time of cargo or vessel from the port of shipment.

Transshipment

Definition: Cargo transfer from one means of transportation to another during cross-border transportation to complete subsequent delivery.

POL — Port of Loading

Definition: The designated port where goods are loaded and shipped for international transportation.

POD — Port of Discharge / Proof of Delivery

Definition: Double meaning according to scenario: port where goods are unloaded; or official voucher proving cargo delivery completion.

5. Customs and Tariff Terminology

HS Code — Harmonized System Code

Definition: A unified global commodity classification coding system formulated and updated by the World Customs Organization (WCO), with a fixed 6-digit international standard core code.

Core Attributes: Covering more than 5,000 commodity categories, adopted by over 200 countries and economies worldwide, used for customs tariff calculation, trade statistics and commodity supervision.

Version Update: The current global effective standard is HS 2022 edition, with supporting supplementary amendments applicable to subsequent years.

Common Misconceptions: The 6-digit code is globally unified; each country can add 2-4 digit extended codes for local tariff supervision, and the extended part is not universal.

Tariff

Definition: Legal taxes levied by national customs on imported and exported goods according to commodity classification and trade rules.

Import Duty

Definition: Special tariffs levied by importing country customs on cross-border incoming goods, the core cost of import trade.

Customs Value

Definition: The recognized commodity value determined by customs authorities as the basis for tariff and tax calculation, subject to national customs valuation rules.

Customs Clearance

Definition: The whole process of enterprises declaring goods information to customs and obtaining official entry/exit approval.

Customs Declaration

Definition: Formal declaration behavior of submitting commodity information, transaction documents and cargo details to customs authorities.

Country of Origin

Definition: The legally recognized production and processing origin of goods, not equivalent to the shipping country.

RoO — Rules of Origin

Definition: Unified rule standards for judging commodity origin, used for tariff preference identification, trade remedy implementation and quota management.

Classification: Preferential Origin (for free trade agreement tariff reduction) and Non-Preferential Origin (for conventional trade supervision).

COO — Certificate of Origin

Definition: Official certification document proving the legal origin of goods, the core voucher for enjoying preferential tariffs.

MFN — Most-Favored-Nation

Definition: Basic WTO trade principle, requiring member states to implement non-discriminatory tariff treatment for all trading partners.

FTA — Free Trade Agreement

Definition: Bilateral or multilateral trade agreements between economies to reduce or eliminate tariffs and break trade barriers.

Trade Remedy

Definition: Official regulatory measures adopted by governments to rectify unfair import trade behaviors and protect domestic industries.

Core Types: Anti-dumping duty, countervailing duty, safeguard measures.

6. International Payment Terms

T/T — Telegraphic Transfer

Definition: Bank-to-bank electronic wire transfer, the most mainstream and flexible payment method in B2B international trade.

Common Payment Ratio: 30% deposit in advance + 70% balance before shipment (customizable as per negotiation).

Deposit / Advance Payment

Definition: Prepaid partial payment by the buyer before production or shipment, used to guarantee order validity and cover raw material costs.

Balance Payment

Definition: The remaining payment settled by the buyer after completing production inspection or before formal shipment.

L/C — Letter of Credit

Definition: Bank credit-based secure payment method; the issuing bank undertakes to pay the seller in full upon receipt of compliant documents.

Applicable Rule: Globally unified UCP 600 standard documentary credit rules.

Documentary Credit

Definition: Official standard term for Letter of Credit, payment liability is based on document compliance rather than physical goods status.

Applicant

Definition: The buyer who applies to the bank for issuing a letter of credit in L/C transactions.

Beneficiary

Definition: The seller who receives payment rights under the letter of credit.

Issuing Bank

Definition: The bank that officially issues the letter of credit and bears the final payment liability.

Advising Bank

Definition: The bank responsible for verifying the authenticity of the letter of credit and notifying the beneficiary.

Confirming Bank

Definition: The bank that adds independent payment guarantee liability on the basis of the original letter of credit.

Sight Payment

Definition: Immediate payment mode; the bank makes full payment immediately after receiving compliant documents.

Usance / Deferred Payment

Definition: Term payment mode; payment is completed at the agreed future time point after document verification.

D/P — Documents Against Payment

Definition: Documentary collection mode; the shipping and customs documents are released to the buyer only after full payment is completed.

D/A — Documents Against Acceptance

Definition: Documentary collection mode; documents are released after the buyer accepts the bill of exchange and promises deferred payment.

Open Account

Definition: Credit transaction mode where the seller ships goods first and receives payment later, with relatively high seller risk.

Trade Credit

Definition: Commercial credit granted by the seller, allowing the buyer to settle payment within the agreed credit period after goods delivery.

7. Quality Control and Inspection Terms

QC — Quality Control

Definition: Post-inspection control work, focusing on detecting defective products and screening unqualified goods in the production process.

QA — Quality Assurance

Definition: Pre-system guarantee work, focusing on optimizing production processes and management systems to prevent quality problems from occurring.

Core Distinction: QA = Prevent problems; QC = Detect problems

IQC — Incoming Quality Control

Definition: Quality inspection of purchased raw materials and components before warehousing to control source quality risks.

IPQC — In-Process Quality Control

Definition: Random inspection and process monitoring during product mass production to avoid batch defective products.

FQC — Final Quality Control

Definition: Full inspection of finished products after production completion to confirm product qualification.

OQC — Outgoing Quality Control

Definition: Final re-inspection before product shipment to ensure shipped goods meet customer standards.

PSI — Pre-Shipment Inspection

Definition: Professional third-party or factory self-inspection before shipment, verifying quantity, specification, appearance, function and packaging compliance.

AQL — Acceptable Quality Limit

Definition: International standard statistical sampling inspection standard, defining the maximum allowable defective product ratio in qualified batches.

Common Misconceptions: AQL is a sampling inspection standard, not a fixed guaranteed defective rate for all products.

Defect

Definition: Product performance or appearance failure that does not meet specified technical standards, divided into critical defect, major defect and minor defect.

FAT — Factory Acceptance Test

Definition: Performance and function test completed at the factory before large equipment and production lines leave the factory.

SAT — Site Acceptance Test

Definition: Final commissioning and acceptance test after equipment is installed and debugged at the buyer’s site.

Inspection Report

Definition: Official document recording inspection data, defect status and product qualification results, serving as shipment and acceptance voucher.

8. Certifications and Compliance Terminology

Compliance

Definition: The state where products, processes and enterprise operations fully meet the legal, regulatory and contractual requirements of the target market.

Certification

Definition: Official formal certification issued by authoritative institutions to confirm that products or systems meet specified standard requirements.

CE Marking

Definition: Mandatory conformity mark for EU market access, proving products comply with EU safety, health and environmental protection regulations.

Common Misconceptions: CE is a market access compliance mark, not a universal quality certification.

RoHS

Definition: EU environmental protection regulation, restricting the content of harmful heavy metals and toxic substances in electrical and electronic products.

REACH

Definition: EU chemical supervision regulation, standardizing the registration, evaluation, authorization and restriction of all chemical raw materials in products.

UL

Definition: US authoritative safety certification standard, widely used in electrical equipment, electronic products and mechanical equipment export.

ISO 9001

Definition: International universal quality management system certification, aiming to standardize enterprise production and quality management processes.

Common Misconceptions: ISO 9001 certifies enterprise management system, not individual product quality.

Product Compliance

Definition: Product compliance with all mandatory regulatory standards and technical specifications of the sales market.

Technical File

Definition: Complete technical document package used to prove product compliance with market regulatory requirements.

DoC — Declaration of Conformity

Definition: Official self-declaration document issued by manufacturers, confirming products comply with relevant standard regulations.

9. Manufacturing Engineering Terms

CNC — Computer Numerical Control

Definition: Precision digital processing technology, completing high-precision product processing through computer program control.

Core Processes: CNC milling, CNC turning, drilling, precision machining.

Injection Molding

Definition: Mainstream plastic product processing technology, injecting molten plastic raw materials into molds for cooling and forming.

Die Casting

Definition: Metal pressure casting process, applying pressure to molten metal to fill molds, suitable for aluminum, zinc and other alloy parts.

Stamping

Definition: Sheet metal forming process, using dies and mechanical pressure to process metal sheets into target shapes.

Welding

Definition: Processing technology to connect metal or plastic materials through heat, pressure or dual effects.

Fabrication

Definition: General term for raw material processing and structural forming of mechanical parts and metal components.

Tooling

Definition: General term for production auxiliary tools such as molds, dies and fixtures required for product processing.

Mold

Definition: Shaping tool with fixed cavity structure, used for mass production of standardized products.

Prototype

Definition: Preliminary trial-produced sample, used for design verification, function testing and scheme optimization before mass production.

EVT — Engineering Validation Test

Definition: Engineering design verification test, checking the rationality of product structural design and parameter design.

DVT — Design Validation Test

Definition: Design standard verification test, confirming product design fully meets functional and performance requirements.

PVT — Production Validation Test

Definition: Production process verification test, ensuring the production line can stably produce qualified products in batches.

MP — Mass Production

Definition: Formal large-scale batch production stage after all design and process verification is completed.

10. Supply Chain Terminology

Supply Chain

Definition: The whole industrial chain system covering raw material procurement, production and processing, warehousing logistics, distribution and terminal sales.

Procurement

Definition: Full-process work of enterprise raw material, product and service purchasing, including demand confirmation, supplier selection and order management.

Strategic Sourcing

Definition: Long-term optimized procurement strategy, focusing on cost control, quality stability, risk avoidance and long-term supplier cooperation.

Supplier Qualification

Definition: Supplier capability evaluation mechanism, auditing supplier production qualification, quality system and compliance level.

Supplier Audit

Definition: On-site or documentary inspection of factory production environment, process standards and management systems.

Second Source

Definition: Alternative qualified supplier for the same product, used to avoid single supplier supply risk.

Dual Sourcing

Definition: Long-term simultaneous procurement from two qualified suppliers for the same product to stabilize supply chain.

Safety Stock

Definition: Reserved inventory to cope with demand fluctuation, supplier delay and transportation interruption risks.

Inventory Turnover

Definition: Operational indicator reflecting enterprise inventory sales and consumption efficiency.

11. Commercial Pricing Terminology

Unit Price

Definition: Single unit transaction price of products, the core basis for order amount calculation.

Total Order Value

Definition: Total commercial amount of a single order, calculated based on unit price and order quantity.

Landed Cost

Definition: Total comprehensive cost of products arriving at the buyer’s designated warehouse, including product price, freight, insurance, tariffs and handling fees.

TCO — Total Cost of Ownership

Definition: Full life cycle cost of equipment and products, including purchase cost, installation, maintenance, energy consumption and scrap cost.

Target Price

Definition: Expected procurement price formulated by buyers based on market conditions and budget standards.

Cost Breakdown

Definition: Detailed splitting of product composition costs, including raw materials, labor, processing, packaging and logistics costs.

Price Validity

Definition: Valid period of supplier quotation, within which the price remains unchanged.

12. B2B Sales and Customer Relationship Terms

B2B — Business-to-Business

Definition: Commercial transaction behavior between enterprises, the core transaction mode of global manufacturing trade.

B2C — Business-to-Consumer

Definition: Retail transaction behavior between enterprises and individual end consumers.

B2B Lead

Definition: Potential corporate customers with product procurement intention and demand.

Qualified Lead

Definition: High-quality potential customers meeting industry, budget, procurement volume and decision-making authority standards.

RFQ Lead

Definition: Customers who actively initiate formal quotation inquiries with clear procurement demand.

Inquiry

Definition: Buyer’s preliminary consultation on product specification, price and supply capacity.

Conversion

Definition: Effective transformation of customer intention into formal behaviors such as order placement and transaction completion.

CRM — Customer Relationship Management

Definition: System and process for standardized management of customer information, communication records and sales progress.

After-Sales Service

Definition: Post-transaction supporting services including technical support, maintenance, spare parts supply and professional training.

Warranty

Definition: Seller’s quality guarantee commitment for product defects and failures within the agreed period.

Spare Parts

Definition: Alternative replacement parts used for product maintenance and fault repair.

13. Trade Documents Core List

Unified sorting of core documents involved in B2B manufacturing cross-border transactions, covering transaction, logistics, customs and compliance links:

14. Dangerous Goods and Chemical Shipping Terms

DG — Dangerous Goods

Definition: Goods with flammable, explosive, corrosive, toxic or radioactive risks that require special supervision during transportation.

UN Number

Definition: Four-digit exclusive coding for dangerous goods transportation classification, used for global dangerous goods transportation supervision.

SDS — Safety Data Sheet

Definition: Standard chemical safety document, recording product hazard characteristics, handling specifications, transportation requirements and emergency disposal measures.

MSDS

Definition: Old version name of SDS, gradually unified to SDS in modern international trade regulations.

Core Distinction: HS Code vs UN Number

HS Code: For customs commodity classification and tariff supervision

UN Number: For dangerous goods transportation safety supervision

A single product can have both HS code and UN number attributes.

15. Digital Trade and Modern B2B Terminology

Digital Trade

Definition: Cross-border trade activities realized and optimized based on digital technology, covering electronic documents, online transactions and intelligent supply chain management.

Electronic Trade Documents

Definition: Digitized electronic versions of traditional paper trade documents, with legal validity recognized by international rules.

eBL — Electronic Bill of Lading

Definition: Electronic digital bill of lading, with the same legal effect as traditional paper bill of lading.

eUCP

Definition: ICC supplementary rules for electronic letter of credit presentation, matching UCP 600 to realize fully digital credit settlement.

AI Procurement

Definition: Intelligent procurement mode relying on AI technology, realizing automatic supplier matching, demand analysis and quotation comparison.

AI Supplier Discovery

Definition: Intelligent screening technology that matches qualified suppliers based on semantic understanding of buyer’s product and capability requirements.

Structured Product Data

Definition: Standardized product information sorted by fixed fields, suitable for machine recognition, intelligent retrieval and automatic matching.

RAG — Retrieval-Augmented Generation

Definition: Core AI technical framework; the system retrieves professional knowledge from standardized knowledge base before generating answers, ensuring accurate and professional output results.

Platform Application: AI customer service consultation, professional term interpretation, supplier capability matching, trade scheme recommendation.

Vector Database

Definition: Intelligent database storing text semantic vectorization data, supporting fuzzy semantic matching and intelligent retrieval of trade terms and product information.

16. Commonly Confused International Trade Terms (Core Distinction)

Manufacturer vs Supplier

Manufacturer: Only refers to enterprises with independent production and processing capabilities.

Supplier: General term including manufacturers, trading companies and distributors. All manufacturers are suppliers, but not all suppliers are manufacturers.

OEM vs ODM

OEM: Buyer provides design and specifications; factory only produces; buyer owns IP.

ODM: Factory provides design and mature products; buyer makes minor modifications; factory owns core IP.

FOB vs CIF

FOB: Buyer bears ocean freight and insurance after goods are loaded on board.

CIF: Seller pays ocean freight and insurance to destination port; risk transfers at shipment.

MOQ vs MOV

MOQ: Minimum Order Quantity (quantity-based threshold)

MOV: Minimum Order Value (amount-based threshold)

Lead Time vs Transit Time

Lead Time: Production and order fulfillment cycle

Transit Time: Pure cross-border transportation cycle

HS Code vs SKU

HS Code: Global unified customs classification code for cross-border supervision

SKU: Enterprise internal inventory management exclusive code

Product Certification vs Factory Certification

Product Certification: For single product or product family qualification

Factory Certification: For enterprise production and management system qualification

Quotation vs Proforma Invoice

Quotation: Preliminary commercial offer for negotiation

Proforma Invoice: Formal preliminary document for order confirmation and payment arrangement

17. Essential Abbreviation Full Reference Table

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