How to Negotiate Minimum Order Requirements

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.