Articles covering best business practices and important insights

How to Negotiate Minimum Order Requirements

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Don’t Have a Budget for a Minimum Order? How You Deal With Who You Deal With May Make All the Difference in the World

If you have ever tried to order items directly from a factory then you know of the minimum order requirements. But do you know how to negotiate minimum order requirements? Whether you are ordering your items from a local factory or online, you will find minimum order requirements.

The manufacturers usually set a high minimum order quantity (MOQ) because they are looking to make more sales. It is also a way of keeping expenses down because they can produce in bulk.

For small businesses new to the market, the huge MOQs can be intimidating. You can, however, learn how to negotiate minimum order requirements before you make a purchase, to ensure you get what you want.

What is minimum order quantity?

The minimum order quantity (MOQ) is the least number of units of an item that a manufacturer is willing to deliver in one order. The value is set depending on the products that you are buying, and the cost.

However, in most cases, the manufacturers will set a high MOQ, as a tactic to sell more in one order; all the more reason you need to learn how to negotiate minimum order requirements.

If you have experienced this on a product you were interested in, then read on to educate yourself on how to negotiate minimum order requirements. Here are some tactics you can use:

  • Pose as a first-time buyer.Tell the manufacturer that you are purchasing for the first time, and you would like to test out their product with a smaller order.
  • Combine different types of items in one order.Order a variety of products from one manufacturer, but with the MOQ of just one order. This is a great business move, because it also allows you to spread your risk on different products.
  • Order with another person. Buy together with someone who is buying a similar item from the same manufacturer.
  • Ask for products that are ready to ship.The manufacturer could have some items ready at the warehouse; such items should not require minimum order quantities, because they do not have to be manufactured for your order.

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If you are not successful with any of the above, or you just want to avoid the hassles of having to know how to negotiate minimum order quantities, then you can order from smaller manufacturers.

What is minimum order value?

The minimum order value is the least amount charged for your product/service in order to make a profit. This is used to determine the MOQ.

How do you find the minimum order quantity?

To determine the MOQ,the manufacturer first determines how much they would want to make for every order; they then consider the expenses for the order.

What does FOB mean?

FOB means free-on-board, where the seller loads the goods on the ship that has been hired by the buyer; the seller clears the goods for export.

How to Test Market a Food Product

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Your Food Product May Be Awesome, But Will It Sell?

The food industry is estimated to be worth trillions of dollars, according to Forbes. This means that, if you are looking to launch a food product, the market is ripe.

There is room for growth here, but creating a product that people will love is tricky and difficult. With a high-quality, original product, you too can take a piece of the pie…but it is critical that you know how to test market a food product before you embark on this endeavour.

After you have created a product, then you have to test the market. So—ensuring you know how to test market a food product so you can determine whether the market is interested in your product is an all-important step.

This will save you time and money, trying to produce and launch a product people are not interested in.

For your product to be successful, you have to have a sizeable market of people interested. This is one of the reasons why you should learn how to test market a food product.

Testing the market properly gives you an idea of who would buy your product, how much they are willing to pay, and what people like or would change about your product.

Here are the more important aspects of learning how to test market a food product:

  • How do you test your market? Many people make the mistake of using their friends and relatives as the litmus test for their food products, and then they end up discouraged and disillusioned. But there are several strategies that you can use to test market a food product. One option is to do it online by using a website, a landing page, or social media. Through online platforms, you can ask people what they would prefer in your type of product; you can also ask them what they like/dislike in the existing brands, and then try to use this data to your advantage. You can also do sampling for your product; this is where you provide free samples for people to try out, and then have them give feedback about your product. You can also do a blind taste test, where consumers taste your product and that of your competitor; find out which brand they prefer, and why.
  • How do you test if your product will sell? You can test if your product will sell by conducting proper market research. Try to find out if there have been other similar products in the market, and if/why they failed. Also, try test marketing your food product at the local farmers’ market or at trade shows to see how it performs. Try selling the product for a couple of months before launching it to the stores.
  • How do you market a food product? To properly test market your food product, you need to ensure that your target customers know the value they are getting from it. The packaging for the product should be attractive, and you should aim at building brand loyalty with your customers. After you test market a food product properly, marketing becomes easy and successful. Ensure that the information you collected during the test is being utilized to get ahead of the competitors.
  • How do I get my product into local stores? While selling your product, at the farmers’ market and locally, before launch, ensure you get information from consumers on places where they usually shop. This will give you an idea of which local stores you should target first. Reach out to these stores and ask for a meeting to present your food product; have a sales pitch prepared, with your findings from the market test, before you go to the meeting.