What Does MOQ Mean In Wholesale Business
Are you planning to import goods for the first time from China, maybe you will have some issues with MOQ. As many of new importers will have a limited budget for investment in goods imported from China, So to have a lower MOQ will be quite important for them to start up their business by importing from China. So in this blog, I will teach you how to get lower MOQ from suppliers, and you will learn the most useful and effective negotiation tips on MOQ.
What is MOQ
MOQ, a foreign trade term, shorted by Minimum Order Quantity, refers to the least amount of products that our suppliers will sell to a single customer in a single bulk order. but the MOQ will also differ from supplier to supplier and also depend on the product and leading time you require, it will be affected by many factors
Some suppliers may have an MOQ of 1,000 units, while others may have an MOQ of 10,000 units. In the case you find your factories are offering you an extremely high MOQ, it means that factory is not your target factory and you can look for another factory that can work with your business size.
What does MOQ mean in the Supply Chain?
As we have to know the difference between retail and wholesale business ., the wholesaler suppliers or factories have to make money by selling goods in bulk in order to cover the lower unit price.
So you may know how important the MOQ will be for suppliers in their own supply chain. They have to take MOQ into consideration to make sure that the bulk order can cover their production cost. in case the order quantities are really small. it may happen that the order earnings can not even cover their labor cost and raw materials or packaging materials fee.
What does MOQ mean in the e-commerce business?
In past years, online e-commerce platforms have become good alternatives for new businesses men want to start their business on a small quantity scale . . so will care about the MOQ online platforms in China. I will list some examples of online wholesale and supplier platforms in China, such as Alibaba, DHGate, or Global Sources.
Not like the offline traditional business, you need to talk with suppliers face to face, and they will tell you the MOQ of the product you want to order. Usually, the e-commerce website will directly indicate different order quantities with corresponding prices clearly., which means the bigger the order quantity is, the cheaper the unit price will be.
If you are a fresh businessman and are interested in importing bottles in bulk from China, you may have to do research on the price and market situation in your country before you come to China. Then you just go through these websites to choose suppliers.
MOQ on Alibaba
MOQ meaning is always the same on all wholesale websites, Alibaba is also not accepted. As you can see in the following picture, you can find each quantity range matches a price. Let’s just take this picture for example ., if your order quantity is less than 500 pieces. The unit price is 5.49$, if your order quantity is less than 5000 pieces, the unit price is 4.67$, if your order quantity is less than 50000 pieces, the unit price is 4.04$, but if your order quantity is over 50,000 pieces, the price will be 3.49$.
But anyway, the displayed prices in different order ranges are only for your reference, you can still negotiate with suppliers based on your real order quantity. For example, if you want to order 4000 pieces of bottles in this picture, you can still negotiate with the supplier for a better price that may be in the price range of 4.67 -4.04 $. . probably you will get a price of 4.3$.
In other words, the listed MOQs on the product page are not final ones. You can always negotiate with suppliers to get a lower minimum order quantity and unit price.
MOQ on DHgate
We can obviously see the difference between DHgate and Alibaba, DHgate offers lower MOQ in different order quantity ranges. But the average price is higher than that of Alibaba, so DHgate compared with Alibaba is more suitable for new small businessmen with limited order quantity required. While Alibaba is not quite suitable for small businessmen. But for this platform. before starting up ., don’t forget to check its safety.
MOQ on Global Sources
Global Sources is a wholesale platform for big MOQs. you will see in the below picture, that the MOQ is quite large. while the price is lower than both Alibaba and DHgate. so if you have already a quite scaled business, in this case, you can choose Global Sources to wholesale products
You can see below there is an “inquire now” button, you can click the button to start a negotiation with suppliers for lower prices and MOQs.
5 Tips To Teach You How to Negotiate Lower MOQ with Suppliers
Tactic 1”: Thinking from Suppliers’ Perspectives
As we all know a successful business is always built on the base of double-win cooperation. The supplier sometimes will also have their consideration of profit and production cost. The production costs will consist of many parts, such as labor cost, machine operation cost, electricity fee, and also raw materials cost. So as a buyer, you may need to consider their difficulties as well.
If think from the side of suppliers better understand their difficulties, and sincerely express your willingness to cooperate with them. So your negotiation will be easier. Try to convince your suppliers and get their trust that business with you will be profitable for them.
Tactic 2: Give a certain pressure to suppliers
Many times only the gratitude and sincerity that you expressed in front of your suppliers, may be not enough to get a lower MOQ. You should also exert certain pressure on your suppliers, which is a commonly used tip in business negotiation.
So you can tell your suppliers that you have also other suppliers in negotiation. But you don’t want to lose cooperation with them if they still insist on high MOQ. You will consider other suppliers to cooperate with, the purpose of doing this is to increase the pressure of competition., as you can not put all your hope on one supplier. Otherwise, you will be in a passive position. You will have no room to negotiate for a lower MOQ.
In this case, if they can still have some profit, they will work with you, to accept your terms. As they don’t want to make their competitors get this business.
Tactic 3: Don’t Rush To Place an order and have always comparison
Before you make the decision of which supplier to choose. You need to be patient and spend time on comparison of different suppliers to find out the most suitable one
If you rush to place an order, you may lose other suppliers that can offer you even lower MOQ. For example, you have found a supplier that can give a MOQ of 300 units, which is within your acceptable MOQ. Then you directly place an order to them. But without any other comparison, so if you try a second supplier or third supplier ., they may give you lower. on the other hand, the suppliers will think that you have no other choice, they will not give you any concession about the trading terms.
Tactic 4: Choosing Stock Rather Than Customized Products
The stock order usually will have a lower MOQ than the customized order . as the stock generally means a large inventory of products done in the warehouse, these products are usually their classic items with a large capacity of daily output, so for them, their is no difference, you order 300 pieces or 600 pieces.
So if you plan to order hundreds of pieces, better to purchase existing products from their warehouse. But in contrast, if you want to customize products from suppliers, the MOQ is usually higher, and difficult to get it lower, because the supplier needs to open a new mold for your products.
Tactic 5: Change payment method
The common payment method is a 30% deposit in advance when you place an order, the balance will be paid T/T after you receive the goods. But if you really want to lower your MOQ, you have to increase the deposit proportion, then the suppliers will lower the MOQ for you.
CONCLUSION
MOQ is always a topic between vendor and buyer. but anyway you can not be stuck a lot with only the lower MOQ, you have to consider the price range and also, think if the price and MOQ are within your budget range.
Bestsuppliers As a professional sourcing company we are also willing to help you to find the right suppliers in China with our over 20 years of successful sourcing experiences.
If you have any questions about the MOQ. Or if you need our help to source products in China, we’re available 24hrs/7 days. CONTACT US right now to boost up your privileged business.
