Minimum Order Quantities

Minimum Order Quantity or MOQ is a common term for the order with the lowest number of items that the manufacturer would accept. The MOQ varies, depending on the product. The costlier items will usually have a lower MOQ. Less expensive items will typically have a higher MOQ.

In most cases, the minimum order quantity (MOQ) is not set by the business but rather by the vendors and manufacturer facilities. The MOQ is based on production batches, MOQ’s for raw materials, etc. Manufacturers ask for minimum order quantity (MOQ) for various valid reasons to ensure their own profitability.

The fixed cost of the manufacturer does not justify smaller orders. Each time an order is taken, the manufacturer would go through the process of developing a product, a massive amount of time and money goes into the design, sourcing suppliers, and buying equipment and tools. They also must work through the process of making individual samples, prototypes, etc. This is a lengthy and intense process.

The raw material supplier has imposed a similar MOQ. In apparel, it may be because a certain fabric needs to be custom-dyed, or the costs just do not work out over a small batch.

The minimum order quantity is an internal organizational issue, while a factory wants a longer commitment than the one offered. If a buyer is not in a hurry, production can be spread over a longer period, or several batches can be pre-ordered.

Often, larger orders that can be processed in big batches, drive their unit costs down by almost 30%. So, manufacturers would prefer to process larger orders.

It is often a clever idea to give smaller order quantities to smaller manufacturers who would take your order seriously. A smaller supplier would be more receptive to smaller batch sizes than a large one.