Glossary for first-time importers: MOQ, FOB, EXW, DDP, HS code and OEM/ODM in detail
Start with what each term changes in your order: quantity, delivery responsibilities, customs classification or design work. Always ask for the exact product, named place and written agreement behind the abbreviation.
- Applies to
- Overseas small-business buyers planning a first or small commercial order from China.
Dear friend,
Welcome! This letter sets out what you need to know, plainly and in order.
Plain words
| Term | Meaning | What to ask |
|---|---|---|
| MOQ | Minimum order quantity: the smallest order this supplier offers for the stated product or variant | Per order, colour, size, material or packaging? |
| EXW | Ex Works, an Incoterms delivery rule with limited seller obligations at a named place | Who can arrange pickup and lawful export clearance? |
| FOB | Free On Board, an Incoterms rule for sea or inland waterway transport | Which loading port and version? For other transport, choose a suitable rule. |
| DDP | Delivered Duty Paid, an Incoterms rule placing extensive delivery and import obligations on the seller | Exact delivery point, lawful import arrangements and evidence of charges? |
| HS code | A customs product classification, based internationally on the Harmonized System | Which destination tariff code fits the actual material, function and product? |
| OEM | Original equipment manufacturer; in sourcing conversations, often production to a buyer's design or specification | Who owns the drawings, tooling and brand rights? |
| ODM | Original design manufacturer; often a supplier's existing design adapted for the buyer | What changes are allowed, and what rights does each party actually have? |
MOQ, OEM and ODM are commercial descriptions here. They are not promises of a standard price, exclusivity or ownership. Put the actual arrangement in the contract.
Three distinctions that prevent expensive mistakes
Delivery is not always arrival. An Incoterms rule defines a delivery point and transfer of transport risk; do not assume it means arrival at your door.
DDP is not a compliance exemption. Ask how import obligations will lawfully be performed. It does not make an unsuitable product legal to sell.
HS is not a supplier's guarantee. The international system uses six-digit groupings; confirm the full destination tariff classification and current measures rather than copying a code from another market.
Copy this into a quote request
"Please give the quantity basis, exact delivery rule and named place, currency, specification version, production scope and any excluded charges."
Risk signals
- "FOB airport" without clarification of the intended rule.
- "DDP, no paperwork needed" with no explanation of import arrangements.
- "ODM means the design is yours" without a written rights agreement.
Official sources
ICC: Incoterms 2020.
US ITA: Know your Incoterms: lists the transport categories.
ICC Academy: EXW and DDP: practical import/export constraints.
WCO: What is the Harmonized System?.
Sources read October 26, 2026.
Still uncertain
The complete Incoterms rulebook, your classification and your design rights have not been reviewed for your transaction.
Next step
Ask every supplier to expand the abbreviations in the quote before comparing totals.
Sources for this letter
Wishing you good business,
The mouwise team
Checked 2026-10-26
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