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MOQ, FOB, T/T Explained: Sourcing Terms Every UAE Buyer Should Know
The first quote from a Chinese factory is full of abbreviations that set the real price and the real risk. None of them are complicated once explained. Getting them wrong is how new importers overpay or misread a deal.
These terms describe the factory quote. They are not GulfCN project terms. GulfCN works from a minimum of USD 15,000 FOB, 50/50.
MOQ — Minimum Order Quantity
MOQ (Minimum Order Quantity) is the smallest quantity a factory will accept for one order.
Factories set an MOQ because tooling, materials and line time cost roughly the same for 100 units or 1,000. Below the MOQ the unit price rises sharply, or the factory declines the order.
MOQ varies by product. A simple printed item might start at 500 units. Custom-moulded parts can need 3,000–5,000 to cover tooling. A factory MOQ in pieces is not the same as a project minimum in dollars.
If an order sits below a factory MOQ, some buyers negotiate a sample run at a higher unit price. Some trading companies pool small lots across clients. That is a market option — it is not how GulfCN works. GulfCN takes project orders from USD 15,000 FOB.
FOB — Free On Board
FOB (Free On Board) means the quoted price covers getting the goods loaded onto the vessel at a named Chinese port — and nothing after that.
Ocean freight, insurance, destination customs and local delivery sit on the buyer (or the buyer’s agent).
FOB is the usual pricing basis in China sourcing. It is not landed cost. A USD 10,000 FOB order can land closer to USD 12,000–13,000 once freight, duty and inspection are added. Budget the gap, not only the FOB line.
GulfCN quotes and project minimums are FOB unless a brief says otherwise.
CIF — Cost, Insurance and Freight
CIF (Cost, Insurance and Freight) means the price already includes freight and insurance to a named destination port. For UAE cargo that port is often Jebel Ali — the port, not an office address.
CIF is easier to budget because freight is inside the number. It also removes the chance to shop freight separately. Factories often mark up that freight portion.
T/T — Telegraphic Transfer
T/T (Telegraphic Transfer) is a bank wire — the usual way to pay a Chinese factory.
A common factory structure is a deposit to start production, balance against shipping documents. T/T is fast and cheap compared with other instruments. It has no built-in buyer protection: if a factory takes a deposit and disappears, recovery is hard.
Factory T/T splits vary. GulfCN project terms are 50/50 — not a 30% factory deposit unless a specific deal says otherwise.
L/C — Letter of Credit
L/C (Letter of Credit) is a bank-guaranteed payment. The buyer’s bank pays when agreed shipping documents are presented. The factory is paid only if those conditions are met.
L/C adds protection on large or first-time orders. It adds bank fees and paperwork. Most factories accept it only when the order size covers the overhead.
OEM — Original Equipment Manufacturer
OEM (Original Equipment Manufacturer) means the factory builds to the buyer’s specification, often under the buyer’s brand. The buyer brings the design.
ODM — Original Design Manufacturer
ODM (Original Design Manufacturer) means the factory already has a design. The buyer changes colour, brand or minor specs rather than starting from a blank drawing.
ODM is usually faster and cheaper to launch than OEM, because the base engineering already exists.
QC — Quality Control
QC (Quality Control) is inspection against an agreed standard, done before the shipment leaves China when it still matters.
It can be a quantity and packing check, or a full AQL sample with defect classes. Skipping QC almost always costs more than paying for it.
Golden sample
A golden sample is the approved physical piece that production is measured against. Once signed off, it is the reference in every quality dispute.
Keep the physical sample. Do not rely on photos alone.
How a quote actually reads
A typical factory line: “FOB Guangzhou, MOQ 1000 pcs, 30% T/T deposit, lead time 25 days.”
That means: the price covers loading at the Chinese port only; the factory wants at least 1,000 units; 30% is due by wire before production; the line takes 25 days before the goods even ship.
Read that quote as factory language. Then check it against the real project: FOB versus landed cost, piece MOQ versus a USD 15,000 FOB project floor, and 30% T/T versus 50/50.
Need a quote read in plain terms? GulfCN reviews manufacturer quotations, MOQ and payment terms as part of China sourcing for UAE buyers. Send the requirement and the quote.