Do You Know What MOQ Is and How Can You Negotiate MOQ?


插图1.jpegWhenever you decide to place an order for certain consumer electronics made in China, often the issue of MOQ may come up. The price of any product will depend on this factor. Quite a few of you may be taken aback as may not have heard this term and are not aware of its significance.

Often you may also need to do a very hard negotiation of MOQ to finalize the deal. Now let us try to understand what this MOQ is all about and why it is so important for most of your suppliers. 

What does MOQ really mean?

MOQ means minimum order quantity and is used for every purchase deal. It is the lowest quantity that can be ordered from a source and yet have it be accepted after negotiation of MOQ.

It is normally set as a certain minimum quantity per product, but it can also be configured as your "Minimum Order Value," if the supplier will only accept orders that satisfy a predetermined price limit across a range of products.

Why MOQs are so important?

MOQs are very important for two parties:

  • Buyer

  • Manufacturer

A MOQ lowers the entry barrier for buyers and reduces their need to invest much in inventory. Additionally, if the supplier proves to be unreliable, the buyer may test things before ordering them, lowering the likelihood that they would receive a significant number of defective products.

Before agreeing to a sizable order, you might proceed more gradually and ensure the supplier is a pleasure to work with.

MOQ is crucial to the manufacturer since it allows them to screen out unreliable customers and those who are not committed to launching or expanding their enterprises.

Additionally, suppliers employ their MOQ to ensure that they are not turning a profit on the goods they provide. Every order will result in a profit if the supplier sets the MOQ at 10 and only needs to produce 5 products to reach break-even.

It offers businesses more leeway for negotiation of MOQ with clients and, if they so want, incur a certain loss on an order.

插图2.jpgWhat do you mean by a low MOQ?

Anything between the figure of 1 and 50 units is considered a low "Minimum Order Quantity." It will however depend on your company and how much you sell. If you have got a very high demand and just want to observe how a manufacturer performs with a bigger order, you can place "Trial Orders" that are between the quantity of 50 and 200.

You may tell you are dealing with a certain supplier who only prefers to deal in huge quantities when a manufacturer requests a minimum order of more than 200 units. Although the provider is amenable to negotiation, they might not.

Why do many suppliers use MOQs?

Suppliers mostly employ MOQs in order to keep product production costs under control. Suppliers would like to produce the goods, pay for all associated costs, and still make a profit.

For doing that, they total up all of their costs and choose a price that will satisfy both themselves and their clients. One unit is the MOQ for some providers. While the supplier is not necessarily making money on each item they sell, they are prepared to incur some loss in order to attract a client.

Advantages and disadvantages of MOQs

Always the best available price per unit is provided by MOQs, which is their main benefit. Frequently, the cost per unit decreases the more in high quantity you purchase from a provider. As a result, you may optimize the profit you make when you will sell that product by spending less for each unit that is manufactured. Therefore, there is a need for negotiation of MOQ.

The upfront expense necessary to get your units manufactured is the largest drawback of MOQs. For instance, 1000 items at $10 each indicate that the manufacturing run may cost $10,000 upfront, which may be frightening or difficult to meet if you are a new business.

Additionally, any expenses associated with conducting business with your vendor, such as the price of delivering the goods to you when the manufacturing run is complete or the price of the paperwork needed to clear the goods through customs, are not included in this cost. Just the price of making the goods itself.

How can you meet MOQs?

Meeting MOQs might be frustrating if your company is just getting off the ground. As a young company, sometimes you just want to buy products in small quantity and cannot satisfy the MOQ demand of many manufacturers.

In case this is the case, you may speak openly and directly with your manufacturers about the number of units you require and your financial capabilities.

Or you can move on and try to find any different supplier offering MOQs that meet your needs if you are unable to fulfil a supplier's MOQ criteria and they are unable to negotiate further down to the number of units that you need.

Finding these suppliers is not difficult because there are several who provide low or almost no MOQs. To identify suppliers who may meet your MOQ requirements, do a tonne of research and go deep into supplier directories.

Another choice would be to find wholesale products, which you can buy unit-by-unit, negating the need for MOQs, depending on the things you are looking for. Even though it can end up being more expensive in the longer run, this alternative allows you to buy things just when you actually need them, as opposed to bulk purchases that you have to figure out how can you sell.

How to negotiate MOQ

While making any purchase deal there is an extreme need for negotiation of MOQ and an experienced purchase manager who is a tough negotiator can very conveniently convince the supplier to be agreeable to a certain desired MOQ. 

Let us discuss here what are the various tactics that may be used for this?

插图3.jpg1. Try to close your deal quickly

In some circumstances, a vendor will set a high MOQ for you, but if they anticipate having you as a long-term customer, they may be ready to create fewer units up front.

Note: The standard payment schedule is 30% down payment and 70% after completion.

The supplier accepted the offer when as a customer you directly request their bank account details and offer to send them the money right away.

2. Offer to agree to a little higher price

In some circumstances, a vendor will set a high MOQ for you, but if they anticipate having you as a long-term customer, they may be ready to create fewer units up front.

At this point, negotiating price is always a better way rather than the actual MOQ. The supplier will probably choose it if producing fewer units makes financial sense for them.

Finding a medium ground where both suppliers, as well as buyers, are happy is therefore important.

You could propose to pay higher costs for fewer units as one option. If the vendor's MOQ is 500 products at $1 each, for instance, you could offer to purchase 300 units at the price of $1.25 each.

If you are very close to the ballpark price figure of your supplier’s profit requirement, then sometimes you can get them to be agreeable to a certain lower MOQ.

3. Offer to increase your overall order size

With this approach, often it is more effective if you want to buy several distinct variations of the same item. If you buy plastic product from China in a range of colours, as an example. However, in general, each color has a different MOQ.

As an example, you must buy a certain quantity of plastic bowls for the vendor to consider the expense of the dyeing procedure to be profitable.

Due to the fact that you sell far fewer orange bowls than white bowls, you can just promise to increase the total order of your white bowls by a particular proportion to cover your cost. Usually, this is enough to persuade the vendor to agree to the MOQ for the orange bowl.

4. Pay in instalments

Ask the supplier whether they can produce the complete production run and delivery you the order in instalments if you are unable to pay the supplier's MOQ in one go. Offer to pay almost for half up front and the balance half over the course of three months, for instance, if their MOQ happens to be 1000 units.

Not every seller will be ready to do this approach, and once more, it all depends on how much the vendor values your business. They might accept this arrangement if they think you are worth the money.

5. Use a sourcing agent

If you got stuck on the MOQ problem, and can’t figure out the way to solve it. Maybe it is time to look elsewhere and use help from sourcing agent in China. There exists many sourcing agent and they can use their connection and method to solve the problem based on a few commission.


It can be difficult to locate a vendor who can satisfy your MOQs in terms of price and quantity, but you can relax. There is a supplier out there who can accommodate your company's size.

Keep in mind that operating an online store is an iterative type of process, and you must rise through the ranks gradually. Until your firm gains traction, start out modestly with suppliers who have low MOQ requirements. Reinvest your earnings with factories to secure better terms.

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