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The Minimum Order Quantity (MOQ) requirement sets the lowest quantity of a certain product (e.g. 500 pcs) that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing or able to enter production.
In this article, I explain why the MOQ requirement exists, and what you can do to reduce the number of units you need to buy.
What is the Minimum Order Quantity (MOQ)?
The MOQ requirement is the minimum number of units you need to order from a supplier. It can be set per order, per product, per material or per color. For example, if a supplier sets their MOQ at 500 pcs, then you must purchase at least 500 pcs before they can accept your order.
How do I find out the MOQ of a supplier?
The MOQ is often specified on the suppliers Alibaba page, or website. You can also contact them directly to ask for their MOQ.
Keep in mind that the MOQ is fluid, as it varies depending on a range of factors. In addition, there are also different MOQs to keep track of, not just one.
What is the Minimum Order Value?
A Minimum Order Value is the lowest value of goods a supplier is willing to sell on a per order or product basis. If the Minimum Order Value is set at US$5000, then they will not accept orders below this figure. That said, manufacturers almost exclusively set a minimum quantity rather than a minimum value.
1. Low-profit margins require larger volumes
Most Chinese manufacturers tend to operate on razor-thin profit margins. Often as low as 3 to 4%. Low-profit margins require the supplier to produce a large number of products in order to break even. Continue reading Minimum Order Quantity (MOQ) – Why It’s Required by Chinese Suppliers