Glossary

Sourcing & manufacturing terms, defined.

The terms every product founder meets when working with Asian factories — Incoterms, order math, production, quality control, certifications, and logistics. Plain English, written by Frenzee operators.

Incoterms

EXWEx Works: The factory's obligation ends at their loading dock — you pay for everything from pickup through destination customs and last-mile delivery. The lowest-headline quote, hardest to execute for first-time buyers.
FOBFree On Board: The factory delivers goods to the origin port and loads them onto the ship you specify. From the moment they cross the ship's rail, ocean freight, insurance, destination customs, and last-mile are your costs. The default for most product founders.
CIFCost, Insurance, Freight: The factory does everything FOB does plus pays ocean freight and minimum-coverage insurance to your destination port. You handle destination customs from there. Convenient; usually marked up 5–15% over arranging freight yourself.
DAPDelivered at Place: The factory delivers goods to your warehouse address, but you still pay destination customs and duties. Common for small-volume air-courier shipments.
DDPDelivered Duty Paid: The factory pays for everything including destination customs and duties. Looks magical until you realize they mark up duties and often get the HS code wrong. Useful for samples; not recommended for bulk.

Order math

MOQMinimum Order Quantity: The minimum number of units a factory will accept per SKU, per colorway. A 500 MOQ across 3 colors means 1,500 total minimum — not 500.
GSMGrams per Square Meter: Fabric weight. The single most important spec for textiles. Cheaper quotes sometimes deliver 180gsm sold as 220gsm — confirm a fabric pre-cut sample on a $30 GSM scale.
FCLFull Container Load: You buy the whole shipping container (20' or 40'). Lower per-unit cost than LCL when you have ~15+ cubic meters of cargo.
LCLLess than Container Load: Your cargo shares a container with other shippers'. Higher per-cubic-meter rate than FCL but right for small orders that don't fill a container.
Landed cost: The all-in unit cost when goods arrive at your warehouse — FOB unit price plus freight, insurance, duties, customs broker, last-mile, sample-fee amortization, and rework allowance. Typically 50–100% higher than the quoted FOB price.

Production

OEMOriginal Equipment Manufacturer: A factory that builds your product to your design and spec, branded as yours. Standard model for most contract manufacturing relationships.
ODMOriginal Design Manufacturer: A factory that designs the product themselves and lets you re-brand it. Faster to launch; less differentiated; less defensible.
Tech pack: The spec document a factory needs to quote and produce your product — measurements, materials, construction details, trims, labels, packaging. Without it, you get back vague guesses, not real quotes.
Lab dip: A small fabric swatch dyed by the factory's lab to match a Pantone reference. Approved before bulk dyeing. Each color goes through 2–3 rounds at $30–80 each before approval.
BDABulk Dye Approval: Approving a sample of the actual bulk-dyed fabric after dyeing but before cutting starts. The single highest-leverage QC step in textiles — catches color drift before it becomes 1,000 mis-dyed units.
Sample run: The factory cuts and sews 5 pieces of each size at the start of bulk cutting, so any grading error is caught early — not after 1,000 mis-graded pieces have been made.

Quality control

AQLAcceptable Quality Limit: The defect rate a factory is contractually allowed to ship at. AQL 2.5 for major defects, AQL 4.0 for minor defects is the apparel industry standard. Above AQL = contractual right to reject.
DUPRODuring Production Inspection: A mid-production QC inspection at ~20% complete by a third-party house (SGS, Bureau Veritas, QIMA). Catches finishing problems before the remaining 80% runs. $300–400 per inspection.
PSIPre-Shipment Inspection: A final QC inspection at 100% complete before you release the 70% balance payment. The inspector samples ~80 pieces from a 1,000-unit order against AQL. Your contractual gate for rejecting shipment.
Delta-E: The measurement of color difference between two samples. 0.5–1.5 Delta-E drift is normal even from good factories; 1.5–2.5 calls for a price concession; above 2.5 should be re-dyed at factory cost.
Pantone: The industry-standard color reference system. "Royal blue" is not a spec; "Pantone 19-3949 TPX" is. Required for any custom color.

Certifications

OEKO-TEX Standard 100: Chemical-safety certification for finished textiles — tests against ~350 banned and restricted substances. Required by major retailers for kids' clothing, intimate apparel, and sportswear. Confirm the cert number on oeko-tex.com.
GOTSGlobal Organic Textile Standard: Chain-of-custody certification for organic textile production. ≥70% organic fiber AND every processing stage in GOTS-certified facilities. Required for legal "organic" claims in the US and EU.
BSCIBusiness Social Compliance Initiative: Labor-conditions audit framework run by amfori (a Belgian retailer consortium). Grades factories A through E on working hours, wages, child labor, harassment, and safety. Most EU retailers require Grade A or B.
Fair Trade: Premium-payment certification where the factory pays workers above local minimum wage, the premium is verifiably distributed, and the supply chain is traceable. Adds ~10–15% to landed cost. Right for premium-positioned brands only.
GRSGlobal Recycled Standard: Confirms recycled content (typically polyester from rPET). Required for any product making a "recycled" claim on packaging.

Logistics

B/LBill of Lading: The shipping carrier's receipt for cargo, used as proof of shipment and to claim goods at destination. In India and Vietnam, factories typically request balance payment "against B/L" — i.e., when they hand it to you.
HS codeHarmonized System code: The international product classification code that determines duty rate at destination. Wrong HS code costs you reclassification fees at customs and sometimes shipment seizure. Always get one from the factory pre-shipment.
Demurrage: Per-day port charges that compound when your container sits past the free-storage window because you haven't cleared customs fast enough. $100–300 per container per day. Plan ≥5 days buffer.
MPF + HMF: US customs fees added on import: Merchandise Processing Fee (~0.3464% of value, capped) plus Harbor Maintenance Fee (~0.125%). Small but easy to forget in a landed-cost calc.
LC at sightLetter of Credit at Sight: Payment instrument where your bank releases funds to the factory only when shipment documents are confirmed at destination. Saves you the working-capital cost of pre-shipment payment, but bank fees run $300–1,000 per transaction.

Keep reading

Brief without the jargon hangover.

Tell Frenzee what you want to make. Frenzee handles the FOB-vs-CIF math, the MOQ negotiation, and the AQL inspection booking — you see landed cost and lead time, never the jargon.

Start with the Sourcing Guide