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In shopping wholesale and retail, you must know the basic formula where you are very rarely allowed to buy units. This term is called MOQ or Minimum Order Quantity. Then, what is the MOQ, and what are the MOQ negotiating tips with the suppliers? is the range of the number of items you can at least buy in one order? Let’s see the review in the following article.
What is MOQ?
The minimum order quantity of a product (Minimum Order Quantities), also known as MOQ, can make novice sellers or product buyers fearful. The huge amount of MOQ can be frustrating, especially when the number is thousands; some products require MOQ as high as 5,000 or 10,000. This MOQ is quite normal, especially on sites like Alibaba and Global Sources.
These manufacturers’ platforms are based on a B2B model, which means that higher MOQ certainly applies. The reason is simple: manufacturers look forward to doing business with companies with huge purchasing power.
Manufacturers want to supply a large number of products because this is their way of making money, and it is also a way to make them cost-effective with just one product in the first place.
But the problem is that buyers have limited budgets, but they still want to complete transactions with these manufacturers and obtain competitive prices. What should they do? Or do you just want to test the market first?
First of all, don’t take these MOQs too seriously; they are just guidelines. The supplier certainly hopes that you can order 5,000 products, but everything is not what it looks like on the surface; you can negotiate.
You will be surprised to find that in most cases, you can quickly lose 30% of your MOQ, and sometimes even more if appropriately negotiated. Of course, some suppliers are unwilling to negotiate, but most of them are willing. Remember, they want to do business with you-so. Don’t be scared off when you see a high MOQ.
Here are some coups that can be used to negotiate MOQ with suppliers:
When dealing with a manufacturer for MOQ, you must have a realistic grasp of the numbers. If the budget allows, reducing the MOQ from 1000 to 250 but reducing it from 1000 to 25 is not easy. Of course, you can try, but don’t hope too much.
Pretend to be “the first time seller.”
Tell the supplier that this is the first time you buy something from them, and you want to buy some for each product. For example, the MOQ of a product is 1000 pieces, but you want to order 250 pieces and try the water first. After finishing talking, wait for a while and see the supplier’s response-it is normal for them to accept your order because you need products and they need orders. Sometimes when they lower the MOQ, they will increase the price of the product; as long as the price is still profitable for you, you can accept it.
2. “Mix and match” your order
In this case, you order different products from one supplier without having to meet a separate MOQ for each product. You still need to meet the overall MOQ, but you don’t need to order a large quantity of each product. In this way, you can spread the risk and capital to a diversified product line. But this method is only applicable to some products.
3. Order products that have been produced
Most factories in China only produce products when there is an order demand because they feel it is inefficient to keep a large amount of prefabricated inventory. This is usually the main reason for the massive amount of MOQ, because suppliers need to produce a certain number of products to ensure cost-effectiveness.
Occasionally, some products are ready to be shipped, but the order has been cancelled, or the inventory is surplus. In most cases, suppliers will be willing to sell these products to you at any MOQ value because they want to get rid of these products. Therefore, you can ask the supplier if they have backlogs or canceled orders taken over by you.
One more thing to note about MOQ:
If you follow the above points, then you can reduce the MOQ by at least 30%. But also remember that you can never order a product with a quantity lower than MOQ at the lowest purchase price. Therefore, sometimes it is not worth ordering products in small quantities because , you may have to pay a reasonably high price.
One suggestion is to negotiate hard with suppliers and know when to give up.
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In general, the MOQ or Minimum Order Quantity is the minimum order quantity. It can also be interpreted as the lowest amount of stock that the seller will serve to the buyer. So, if you do not buy according to the MOQ, your order will not be processed because it does not meet the purchase standard.
First, the MOQ can make their products not too long stored in the warehouse for the manufacturers. This is because the turnover of goods is very fast, considering that buyers are charged with a minimum order amount in one order.
As for buyers who are traders, the MOQ can provide them with a stock guarantee for sale. In addition, the MOQ will also allow them to save on other costs due to a large number of items in one order, such as shipping and unpacking costs.