Negotiating Minimum Order Quantities (MOQ) If you’re looking for a supplier for the first time, you’re going to quickly learn about ‘Minimum Order Quantities’ (MOQ’s). Minimum order quantities will largely depend on your product, the industry, your supplier and whether you’re manufacturing the product, wholesaling or dropshipping. Typically, if you are purchasing good wholesale for resell, minimum orders can be anywhere from a few units to a few dozen, sometimes more. If you are dropshipping, there is generally no minimums because you aren’t purchasing inventory up front. If you are manufacturing your own product, minimum’s are almost always the highest and can range from a few hundred to a few thousand. MOQ’s make it difficult when you have limited funds, or simply want to play it safe by starting small to test the market before making larger purchases. The good thing is that MOQ’s are almost always negotiable. Before you begin negotiating, the first step is to understand why the supplier has a minimum. Is it because there is a lot of work upfront to tool the machines? Maybe it’s because they just prefer to work with larger buyers. Regardless, understanding the reasons behind the manufacturer’s minimum will help you better understand their position and will help in your negotiations. Once you have a better understanding of your suppliers position, you can ask for a lower order quantity. Compromises can include giving the supplier a deposit for a larger order, but just producing small amounts at a time or paying a higher price per unit. Sometimes, just asking for a break on your first order may be enough.
TIP: One particularly effective method of negotiating a lower
minimum order is to ask for a break on your first order so that you can use the money saved to put into marketing their product. This makes the supplier feel that you are more committed to selling their product.
CHAPTER ELEVEN: LOCATING A SUPPLIER
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