HS Code stands for Harmonized System Code. It is a coding system that classifies goods being imported and exported internationally. It is used to identify the Customs Tariffs or Duty Rate that will be applied to a product when received at the destination port of entry.
HS Codes can also be used for other things, such as ensuring banned or hazardous products are not imported.
You can see the HS codes for a product that has been imported under the Shipment Information section, shown here:
The main reason you should determine the HS Code in the sourcing phase is to work the duty rate into your costs and ensure you can still be profitable. This step is often overlooked, and you need to know what code the product would have to determine its actual costs.
Each code corresponds to a percent, which is applied to your cost of goods as shown on your commercial invoice. The duty rate owed when importing is calculated and paid, and your goods are released.