Doing foreign trade is like learning a new language, and besides the business itself, you need to be familiar with various foreign trade terms。
Some introductory terms are presented here, almost throughout the entire process, from negotiation, signature, payment to logistics and clearance。
For starters, seeing a combination of letters such as fob, cif, ddp may be cloudy, but they often determine the cost and risk allocation of a business。
I. Terminology related to trade patterns
1. Fob (free on board, fob)
The seller was responsible for loading the goods on a ship designated by the buyer, with subsequent transportation costs and risks borne by the buyer. Often used for maritime transport。
Scenario: fit for buyer with experience and familiarity with international logistics channels。
2. Cif (cost, insurance and freight, cost plus insurance plus freight)
The seller was responsible for freight and insurance until the goods arrived at the buyer's port. The buyer had to pay only for customs clearance and subsequent transportation。
Scenario: fit for new buyers, low risk。
3 ddp (delivered duty paid, after tax delivery)
The seller was responsible for all transportation, customs clearance and taxes until the goods were delivered to the buyer。
Scene: the buyer is the most responsible seller when it does not have the qualifications to import。
Exw (ex works, plant delivery)
The seller had to prepare the goods at the factory, and then all costs and risks were borne by the buyer。
Scene: used in very few cases and suited to the strong buyer。
Ii. Payment and settlement terminology
1 t/t (telegraph transfer, wire transfer)
The most common forms of payment are the 30 per cent down payment and the end payment before shipment。
Advantages: speed。
Disadvantages: risks are mainly on the buyer's side。
L/c (letter of credit, letter of credit)
The bank guarantees payment by the buyer, which is less risky but complex and costly。
3, d/p (d)Documents against payment
The buyer paid for the bill of lading. The seller is less risky, but may affect the turnover rate。
D/a(d)Documents against access
The buyer could take delivery of the goods by signing forward bills of exchange, with the risk being mainly on the seller。
Logistics and transport terminology
1 b/l (bill of lading, bill of lading)
Goods receipts and property documents issued by transport companies are important documents for delivery。
2, eta (estimated time of arrival, projected time of arrival)
The date on which the goods are expected to arrive at the port of destination。
3 fcl full coNtainer load, locker
It refers to the exclusive ownership of a container by a single cargo owner。
4 lclNtainer load, box
Multiple cargo owners share a container suitable for small shipments。
Marketing and cross-border related terminology
With the rise of cross-border electricians and independent stations, foreign trade terms are no longer limited to traditional imports and exports. More and more new terms appear:
1, seo (search engineering optimization, search engine optimization)
Important ways to access natural flows on independent stations。
2, ppc (pay per click, click-pay ad)
It's popular in google ads and amazon ads, and it's good for quick diversion。
3, tiktok shop
There is an emerging cross-border electrical channel, with rapid growth in live tape。
Ip isolation / environmental isolation
Cross-border sellers, when operating multiple accounts, must avoid the platform being judged to be “account connections”. At this point, proxy servers (e. G., residential or data centre agents provided by ipfly) can help sellers model the local network environment and secure account operations。
V. Contract and trade operations
1, moq (minimum order quantity, minimum start order)
Number of minimum orders acceptable to sellers。
2. Oem (original equipment manufacturer, surrogate production)
The buyer provided brand names and the seller produced them。
3. Odm (original design manufacter, design agent)
The seller provided the design and the buyer sold directly。
Incoterms
The international chamber of commerce (icc) has developed trade rules that regulate the sharing of responsibilities and costs between buyers and sellers。
Why is there familiarity with foreign trade terms
Avoiding misunderstanding: one letter is missing, but transport costs may be completely different from risk allocation。
Increase bargaining power: knowing what ddp means, you can assess whether the seller has reported excessive prices。
To expand new channels: in the emerging channels such as tiktok, stand-alone stations, terms such as environmental isolation and advertising optimization directly affect business success or failure。
Summary
Foreign trade terms appear to be complex and are indeed a “common language” for international trade communication. The acquisition of these terms allows for a quick understanding of contract terms, barrier-free communication with buyers, and the reduction of losses from misunderstandings。
In addition to traditional trade terms such as fob and cif, emerging concepts such as seo, ppc and environmental segregation are equally important in the light of the trend of transborder electric operators in foreign trade transition. In particular, with regard to account security, the provision of high-quality agents such as ipfly can help cross-border people to isolate multiple account environments and avoid miscalculation by the platform。
Foreign trade is not just a “sale product”, but a professional communication. You know the term, you're already on the starting line。
