What does MOQ stand for?
MOQ stands for Minimum Order Quantity.
What does MOQ mean?
Minimum order quantities (MOQ) are minimum quantities that you can purchase from a factory or a supplier.
Why do factories and suppliers have MOQ?
Factories and suppliers have operational overheads that they need to set to justify the cost of a product sold. Within that operational overhead they account for both direct and indirect operational costs such as labor, production set-up, upstream costs and minimums of the materials for manufacturing, and assembly set-up and costs.
What does MOQ mean on Alibaba?
MOQs that are displayed on Alibaba are often times the minimums that those factories have set for a product they already produce - often from Original Design Manufacturers (ODMs). This is often times not the same MOQ if you make customizations to products that may require an Original Equipment Manufacturer (OEM).
How to negotiate minimum order quantity?
Negotiations are going to be vital to lower MOQs. In order to negotiate effectively you'll need to be prepared to give as much as you wan to take. A few methods could be to; offer a higher dollar value per unit, pay the supplier a one-time fee, or to show them how it will benefit them to provide you with a lower minimum order quantity to begin with.
Why use MOQ in unit testing?
Many retailers choose to order the lowest quantity a factory can provide when testing the sales of products online through platforms like Amazon, Google Shop, and Walmart.com. They do this to mitigate their financial risk in their inventory, but this can drastically limit the level of customizations to the product and packaging when ordering custom products.
Why is MOQ important?
Minimum Order Quantities (MOQ) are important to suppliers because that is the minimum they need to produce/sell in order to make a desired profit margin. Many times it doesn't make sense for them to do a production run for lower than the calculated MOQ because they'd be running at a loss.
