Do you want to know what MOQ (minimum order quantity) is and why it is important?
Do you want to make orders on lower MOQs but the supplier asks for higher quantity?
Let us tell you that you’re at a right place to get to know about the MOQ and everything about it. MOQ is a crucial element when you are trying to start a new business. This defines your profit margin and can affect it if not taken into consideration.
Many buyers want to order a specific amount of products but that amount cannot meet the MOQ of the supplier. However, there are ways to persuade the supplier to lower the MOQ.
So, in this blog, we will explain you about what does MOQ means, its importance, how you can negotiate lower quantity and some strategies to estimate the best MOQ for your business.
Table of content
Chapter 1: What does MOQ means?
Chapter 2: How to negotiate lower MOQ with Suppliers?
Chapter 3: MOQ of different suppliers
Chapter 4: Average MOQs of different items
Chapter 5: What affects MOQ in China?
Chapter 6: Tips to get a lower MOQ while purchasing
Chapter 7: Precautions for buyers when searching for perfect MOQ
Table of Contents
Chapter 1: What does MOQ means?
What does MOQ mean on Alibaba or 1688? Well, let’s understand what MOQ means and how it affects your buying experience.
1. Meaning of MOQ
MOQ is basically defined as “Minimum Order Quantity”. In simple words, MOQ means the minimum amount of products that you need to order. Or you can also see it as a minimum quantity that a supplier will sell.
When doing business, some suppliers change quantity into money. Let’s say you are dealing with a shoe supplier who has a MOQ of $1000. The supplier will take the order if you reach that set amount.
So MOQ can be in order quantity or investment amount.
2. Why is MOQ important?
MOQ is crucial for any manufacturer. It also enables a manufacturer to make a profit. Most of the manufacturers in China work on a low-profit margin. So, their own source of good cash flow is taking orders in bulk quantity. Hence, they set a minimum order quantity.
3. Why MOQ is taken into consideration by suppliers?
The reason MOQ is taken into consideration by suppliers/manufacturers is that it is there to cover the cost of production and provide good profits to the factory. Basically, if the quantity is too small, it can become difficult to operate on the production line.
Plus, it will also become hard when purchasing raw materials for making that product. To sum this up, suppliers/manufacturers set the quantity to meet a certain threshold.
4. Is MOQ good or not? (how to deal with it if not)
This question right here is subjective. That is because both (supplier and buyer) see it as an opportunity.
For a supplier, they hope that you buy the product in as much quantity as you can and in as many designs as they have available.
But, from a buyer’s angle, new businesses or startups that have a large inventory that comprises of different parameters (sizes, colors, designs), then following a large MOQ is difficult, for example, If a buyer wants to buy 1000 pieces in 5 styles.
Keeping the supplier’s MOQ pattern in mind, he/she can only buy that quantity in 3 or fewer styles. In simple words, MOQ is not friendly for new businesses.
If a business has just started, the only solution for that startup is to go for items that have less SKU. These kinds of items have only 2-3 models. With this, there will be less stress on filling the inventory with multiple quantities.
Chapter 2: How to negotiate lower MOQ with Suppliers?
For new startups, MOQ is not as friendly as it should be. So, the idea behind this is to get the supplier/manufacturer to lower the MOQ quantity. Here is how you can do that.
1. Talk with supplier in friendly manner
There are plenty of e-commerce sites available out there that will tell you the method of being a pro or a newbie. For instance, if you are trying to negotiate a price unit price keeping a quantity of 20,000 pieces.
But, in actuality, you only want to get your hands on only 2000 pieces, that is not good at all. The reason for that is suppliers deal with buyers from time to time and they get to know whether you are a new brat or an experienced one.
Secondly, many Chinese suppliers will lower the quantity to a certain figure (keeping their cost in mind) in the first meeting. But, adopting to this one is also not good as the supplier will think that you are not reliable.
The solution to that is to communicate frankly with the supplier. Tell them what you need and what you are looking for. For instance, you can go with the theory that you are trying to test the market and the MOQ you are asking is 30%-40% of the total quantity.
Yes, the final quote price will be higher than the previous one. But, it is feasible as it will be beneficial in the longer run.
2. Communicate keeping supplier’s perspective in mind
Business is always made on mutual considerations. Whether it is your employee or supplier, it is essential to understand their side of the story. Talking about the supplier, you should build trust with the suppliers and understand his situation as well.
For instance, you can tell your supplier that you understand their problems. Or you can assure them by telling them they won’t lose their money by doing business with you.
3. Don’t rush while ordering
The important factor when negotiating quantity with the supplier is keeping cool and doing the talking patiently. If you rush while doing that, there is a chance that the supplier will think that you are just playing with their time. So, the key thing is to handle this procedure by being patient.
For example, you can tell the supplier that you can consider lowering the MOQ and let you know in 2-3 days. During this day, it is important for you to wait patiently and let the supplier contact you.
4. Apply some pressure to get low MOQ
This is the formula that is risky so you should be prepared. When talking with the supplier, you can tell them that “despite they being the best supplier for you, you also have the option to choose from suppliers”. If they cannot lower the MOQ that you are asking for, you will drop them and contact other suppliers.
5. Talk on extra expenses
If still, you cannot make a supplier lower his/her quantity, you can talk about things like these.
-The expense of starting the machine: A supplier will not take an order if it does not cover the cost of starting the machine. So, what you can do is tell them that you will cover a certain proportion that it takes to start the machine.
-Custom components: Another reason a supplier is giving you a higher MOQ is you are asking for customizations. These customizations can lead a supplier to buy additional raw materials, leading towards high MOQ.
6. Combine your order with other orders for lower MOQ
Another important aspect that you can go for is merging your order with orders that are matching your requirement.
This way, a seller will get his minimum quantity that is required to cover the production costs, and it will get the work done.
Chapter 3: MOQ of different suppliers
Now that you have an idea about ” What does MOQ mean”. let’s talk about the quantity of different suppliers. Mainly, these MOQ scales vary from item to item. But, to give you an idea, we will see some of the order quantity that is given by different factories.
1. Small scale factories
If you are trying to import fom China (Less than a container), then you are dealing with small-scale factories. These factories are the ones that need a good minimum order quantity requirement. That scale ranges from $1000-$2000.
2. Wholesale markets
Wholesale markets are the ones that are producing items in bulk and MOQ in wholesale also puts in an affect. There is an advantage to these types of markets. They have lower MOQ compared to small scale. For example, their quantity requirement will range from $100-$200. if you are going for custom styles, that can go up to $1000.
3. B2B sites (Alibaba)
Alibaba suppliers are of great advantage to a new business. That is because they are trusted by a lot of users. That means they are dealing with multiple customers at a time.
There is a chance that they will merge your order to an existing order that is running on the production line because of working with multiple buyers. There MOQ can range from $500-$2000, inclusive of customizations. Or the customizations can charge a little bit.
However, it is important to note that MOQs can vary from factory to factory and order to order. It might be that you are buying an expensive machine. In that case the MOQ can be 10,000$. So again, it will depend on order.
4. B2C (Aliexpress, DHGate, Taobao, Tmall)
Usually, Aliexpress and related sites do not have an MOQ requirement. But in some cases, some suppliers ask for quantity requirements. That MOQ requirement can be in a couple of dollars. Like minimum 2 units to order.
Chapter 4: Average MOQs of different items
MOQ also means that you have to go through the minimum order quantity of every product that can be sold easily. The items mentioned below with their MOQs are for reference only and just to give you an idea.
1. Leather items MOQ
The first product that has a demand is leather items. The items that belong here are leather shoes, leather bags, and leather gloves. The average MOQ requirement of these kinds of products ranges from 100-500 units.
2. Furniture MOQ
Moving towards the second in the blog of “What does MOQ means” is the furniture items. For instance, items like chairs, tables, bookshelves, and racks come under this category. You will find the range of average quantity to be 100-300.
3. Clothing MOQ
Apparel is one of the top trending categories in the online business. We all know that there are shirts and pants that are offered in different designs. For basic and plain MOQ is round about several dozens. For customizations, it can vary according to the design and color scheme.
4. Toys MOQ
Toys have huge market demand. Getting into this business can make you hefty profits. For plastic toys, the MOQ requirement starts from 500-2000, and for high-tech, the range starts from few dozens.
5. Fashion Jewelry MOQ
Talking about fashion jewelry items in MOQ meaning article, these items are small, yet they have an amazing profit margin. For a supplier, the MOQ that he/she asks ranges from 100-350.
6. Backpacks MOQ
Another category that has good potential is backpacks. But, these items require a good investment. That is because their quantity ranges from 50-500.
7. Socks MOQ
With the socks business, there is nothing to worry about. That is because these items are easy to produce. Basic socks designs have an MOQ range starting from 30. For customized socks, it can go up to 300 pieces.
Chapter 5: What affects MOQ in China?
In your business, we are sure that you would have seen quantity on Alibaba way too high. The reason for this is there are multiple things that affect MOQ. Some of them are
1. Product Type
If you are into the business of simple items like pencils, pens, pins, and toothpicks, you will definitely encounter quantity requirements that range from 10,000 or higher. Items like notebooks, glass items, plush toys come under the complex category and they can range to 1000 pieces. Similarly, items that lie under a high-tech list like the point of sale (pos) systems can have 50-80 piece MOQ.
2. Customizations and tweaks
Whenever you make the supplier make customization to a product, he/she has to buy additional material for making the item. For example, if you are trying to get your hands on a colored T-shirt and the seller is only offering it in white color, that can make the MOQ go up.
3. Price of mold
You want a shark-shaped glass cover. And the supplier only offers dove shaped glass cover. Your demand can lead towards a higher MOQ as the supplier will have to create a new mold.
4. Quality of the product
Let’s divide the quality factor into A and B (best to worst) categories. Suppose, you are looking for eyeshades of A quality. But, the supplier is offering the item in B quality. To meet your requirements, the supplier has to buy premium quality frames and lenses. That can affect the cost of starting the machine. Hence, he/she increases the quantity limit.
5. Factory size
High scale factories that are operating with multiple buyers often have high quantity requirements. That is because producing items lower than their average MOQ will not be worth it because they can make a profit by making bigger orders.
Chapter 6: Tips to get a lower MOQ while purchasing
When negotiating MOQ, there is an essential need to understand some factors. For that, use these tips that will help you in getting a lower quantity.
1. Use already available material
When working with the supplier, identify what types of material does the supplier has. Then use that knowledge and design a product that comprises those materials. Standard materials like colors are inexpensive most of the time and are easy to purchase in small quantities.
2. Consider small factories
Small factories are the ones that have 10 or less than that team working in it. These factories have lower quantities as they are not dealing with multiple customers. This move can help you get a lower MOQ.
3. Take joint orders into consideration
The main reason suppliers have high MOQ is that they have to take the operating cost into consideration. Operating cost includes the wage of the workers, starting the machine, etc. Ask the seller if he/she has an order that matches your specs sheet. Then, you can merge your order with the other one, allowing you to get a lower MOQ.
4. Minimize customizations as possible as you can
Another thing that you can do is lower the customizations. For example, if you are ordering a T-shirt, only go for color schemes. There is no need to print logos on it. These things can lead to higher MOQ.
5. Lower your profit margin and offer higher advance price
At the start, you can offer the seller to pay more in advance. This will help the seller in getting the required materials and that can help in getting a lower MOQ. Yes, it can affect your profit margin at the start, but it will develop a relationship.
6. Try to purchase from sourcing agents instead of purchasing from factory
Sourcing agencies like EJET Sourcing know ins and outs of the whole of China. They understand the meaning of MOQ and use that knowledge to get you a lower MOQ. Plus, they have good links and will get you the product according to your requirement and order quantity.
Chapter 7: Precautions for buyers when searching for perfect MOQ
Let’s say now you have an idea about MOQ meaning, let’s talk about the scams that you can encounter. Actually, online retailing has got a lot of attention. But, with that, there also comes an increased ratio of scams. Here is how you can prevent that.
1. Use Reputable websites
The first thing when getting an MOQ quote is checking whether you are using renowned sites or not. Sites like Alibaba or Ali express have verified suppliers. So, it is better to use those sites to prevent any mishap.
2. Beware of suppliers with extra ordinary MOQ
The second thing to look for is an extraordinary MOQ offering. The reason we have compiled the guide “What does MOQ means” is to make you understand how this works. With this, you will be able to judge whether a supplier is offering unusual MOQ offerings or not. For instance, they will offer you free customizations on a specific order quantity. But, later they don’t fulfill that requirement.
3. Factories with extreme lower MOQ is red flag
If you think that you are getting a good deal in the form of an extremely lower MOQ, you are wrong. The issue with that is sometimes suppliers show you a premium quality product and lower MOQ to gain your attention. Once it is done, they use B quality materials to make the product. So, extreme lower MOQ is a sign of a red flag.
4. Consider your hunch (Gut feeling) when buying
Whether it is a new businessman or a professional one, the hunch is the essential key here.
With the suppliers, it is worth noting that how they are talking to you. Are they offering bottom low discounts? Or, are they being too frank while talking to you. Yes, there is a chance that they are offering true deals or they have a frank style of talking. But, consider your hunch. If your gut tells you that there is something wrong, there is something wrong, period.
Chapter 8: FAQs About MOQ
1. What is the minimum order quantity?
Meaning of minimum order quantity is a check that is set by a supplier/manufacturer. This means that a manufacturer/supplier is willing to produce the items if that certain amount is ordered.
2. What is a low MOQ? What quantity is considered as a wholesale order?
A low MOQ is within the range of 1-50 items. Suppliers that setup this scale are the ones who are new in the market.
If you are buying any item in bulk (let’s say 5000-10,000) pieces, it will be considered wholesale. The advantage of that is you can get a lower price/unit.
3. How do I ask for MOQ?
Whether it is Alibaba or a sourcing agent, you can ask for a minimum order of quantity by communicating with the relevant party.
4. How do persuade the supplier to lower his MOQ?
You can persuade the supplier in lowering the MOQ by communicating with them nicely, understanding their difficulties, and offer large advance payment in the first meeting.
5. What is MOQ request?
On sites like B2B, you get an option to send an MOQ request. This request enables you to get information about what is the lowest quantity a supplier has to offer.
Conclusion
Talking about MOQ, there is no easy method to find the manufacturer that meets your specs and requirements. But, searching patiently can lead you towards your potential supplier.
So, the thing is to understand MOQ’s meaning. As it can affect your business.
The thing is there is no such thing as the lowest MOQ. That is because there is a chance that the supplier that is offering that MOQ is a scam. So, the ultimate goal is to get a trusted supplier who does not affect your profit margins.
We have compiled the guide “What does MOQ mean” to help you with every possible barrier. The blog contains the meaning of MOQ, along with how you can negotiate in getting a lower MOQ and tips related to that.
