T/T, FOB, WU, EXW, CIF, and a whole lot more of alphabet soup…You went to Alibaba and saw all of these of other acronyms.
You were told Alibaba was in English, right? All of these business terms might as well have been in Chinese.
What do they mean? How do they affect you as an Amazon Private Label Seller?
When I first saw all of these terms on Alibaba, I didn’t think much about it. However, I’ve been a merchant for over 25 years now and have worked with each quite a bit.
But I do get a lot of what does they mean questions so let me go to the “Mark Thesaurus” and translate a few of them for you.
T/T…Telegraphic Transfer. In modern terms this really means a bank wire transfer. Most banks will charge about 50 US dollars to send or “wire” money to a foreign bank.
L/C…Line of Credit. Typically you will establish a line of credit at a third party, usually a bank and when payment is required the bank will wire the money to the supplier. This is usually used in larger transactions from larger companies
W/U…Western Union. Yes the telegram company. They have modernized and you can use this to transfer money not only to friends and family but also business suppliers.
FOB…Free on Board or Freight on Board. This means the suppliers will prepare your shipment and deliver it to the shipping company, however their quote does not the cost of shipping.
However, a lot can get lost in translation when dealing with someone in another language. Double and triple check what their quote includes.
CIF…Cost, Insurance, Freight. This means the supplier will include the cost of freight in their quote. Sometimes it means shipping to your nearest port and sometimes it means to your door.
Again, double and triple check with your supplier
EXW…Ex Works. Really means you plan on picking up the order at the sellers warehouse. Typically used with big companies that have their own shipping systems, like 18 wheeler trucks.
As the typical Amazon seller you won’t be importing large containers of goods, so many of the the terms you see won’t apply. However, you’re now a little more knowledgeable and hopefully a little more confident.
Now go out there and get started!
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Mark Scott Adams is a serial entrepreneur who has started, built and sold six businesses. He has sold millions of dollars of physical products on and offline over the last two decades. He is currently a speaker, author and successful Amazon Seller. To take his free amazon sellers training click here. To Get his free product checklist list click here