1. MOQ definition

MOQ stands for Minimum Order Quantity. It means the minimum order requirement you need to meet for the manufacturer to accept your offer. Each supplier has their own MOQ and that standard is set based on the average cost of one production unit. MOQs are determined in order to ensure that the supplier can also make a profit, therefore they only accept orders that benefit from mass-production or expensive orders though in small quantities.

2. The importance of MOQ

MOQs are extremely important for suppliers because it sets a standard for the scale of business they can work with. Small businesses need to find a manufacturer or a wholesaler who has low MOQ so as to match with their requests whereas large scale businesses should look for manufacturers with higher production capabilities.

3. The best way to negotiate MOQs as a retailer

As a seller, you definitely want to strike the best deal for your business. Consider some tips below for negotiation in case you are struggling with fulfilling MOQs.

• Sometimes an upfront payment or immediate storage can be problematic when you are setting the orders to meet a supplier’s MOQ. To mitigate this issue, ask the manufacturer if they can divide the final product bulk into two shipments, one half first and the other half in a few months or weeks. Some will accept this offer, some will not. It depends on your attitude and reputation that they may decide to help you.
• If you don’t want to manage the excess inventory when you have to place an order larger than needed to meet the MOQ, simply tell the supplier to keep the leftover. Even though you still have to pay the full price, it will save you from the hassle of dealing with the products you don’t want to keep. This might sound like a bad call for some business, but it’s worth taken into account.

Another way to subsidize an order with MOQ is making your products available for pre-orders and raise money from crowdfunding. This will not only help you obtain the deposit quickly but also help estimate the amount of products in demand from customers.