5 Ways to Buy Small Volumes From Your Supplier

August 07, 2023
Table of Contents

The minimum order quantity (MOQ) requirement is the minimum number of units a supplier is willing to sell a certain product. If a supplier sets the MOQ for a certain product at 500 pcs, then they cannot accept orders of anything less than 500 pcs.

In this guide, you will learn why suppliers have MOQ requirements, and what you can do to reduce it.

Content Overview

1. Use factory standard materials and colors

2. Use the same materials for multiple products

3. Avoid product customization

4. Negotiation

5. Offer to pay a bit more

What is the standard MOQ?

There is normally more than one MOQ requirement to keep track of:

  • MOQ per order
  • MOQ per product
  • MOQ per material
  • MOQ per color
  • MOQ per size

Example: T-Shirts

  • MOQ per order: 1000 pcs
  • MOQ per product: 500 pcs
  • MOQ per material: 500 pcs
  • MOQ per color: 250 pcs
  • MOQ per size: 75 pcs

If we only take the main MOQ, which is often set on a per order basis, into consideration we might quickly jump to the conclusion that we must buy 1000 pcs of blue t-shirts, all in the same material and size. However, when digging a bit deeper, as in the example above, we quickly find that not to be the case.

Understanding your suppliers ‘MOQ structure’ is essential.

Who decides the MOQ?

The MOQ is rarely set by the factory. Instead, its set by their material subcontractors. For example, a fabric supplier may only be able to turn a profit if they produce 1000 m2 of cotton fabric, per color.

As such, the t-shirt factory must adjust their MOQ requirements in order to ensure that they are not stuck with a large oversupply of materials.

This is another key point when it comes to lowering the MOQ requirement.

Keep in mind that many suppliers would be happy to offer a lower MOQ if they only could. But it’s often outside of their control.

1. Use factory standard materials and colors

Factories often have certain standard materials and colors available, which they purchase on a regular basis for one or more customers. Another scenario is that the material is available from local wholesalers, that keep restocking the material and color on a regular basis, which therefore enables your factory to buy smaller volumes.

As a result, your supplier can then offer you a lower MOQ requirement on a per material and color basis.

That said, this also comes with the limitation that you cannot get your product in a certain Pantone color, as this requires the material supplier to make a batch specifically based on your color code - thus forcing you to match the entire MOQ requirement on your own.

2. Use the same materials for multiple products

Another quick fix is to use the same material and color for more than one product. While the total MOQ remains the same, you can divide it by a number of different products.

Example: Bathroom Rugs

A few years ago we helped a European furniture retailer create a collection of bathroom rugs by applying this strategy. Their intention was to launch up to 12 new products in one go but didn’t want to buy 1000 pcs per design and color, as this was a new untested product.

As such, first had to ask the supplier to offer a breakdown of their MOQ

MOQ breakdown

  • MOQ per order: 1000 pcs
  • MOQ per material: 500 pcs
  • MOQ per color: 300 pcs

That said, their MOQ per design was only 100 pcs, as they had more flexibility when it came to inhouse cutting and sewing.

As a result, the customer opted for the same material (MOQ: 500 pcs) in 3 different colors (MOQ: 300 pcs) cut in three different shapes (100 pcs).

Result: 3 designs x 3 colors = 9 different SKUs

Order volume: 100 pcs (per color and shape) x 9 variations = 900 pcs

This allowed them to test a new collection, while also reaching the suppliers MOQ requirement per color.

3. Avoid product customization

Customizing the product design, materials and colors make it harder to apply the two strategies I mentioned below. Keep in mind that anything that’s non-standard often results in a higher MOQ as you must then have materials custom made.

Example A: Colors

  • MOQ (Standard color): 100 pcs
  • MOQ (Pantone color): 500 pcs

Example B: Fabrics

  • MOQ (Standard fabric): 200 t-shirts
  • MOQ (OEM fabric): 1000 t-shirts

4. Negotiation

The reason I saved this one for last because it’s normally the least effective approach to reducing the MOQ requirement. However, it’s also the most common.

As I already mentioned, the MOQ set by your supplier is in most cases only a reflection of the MOQ set by their subcontractors. The best way to reduce the MOQ is therefore by working with your supplier to help them reduce the MOQ per product, while still matching the MOQ set by their subcontractors.

With that being said, there are situations in which a MOQ negotiation can actually work.

Many suppliers are willing to offer a lower MOQ when placing an initial test order. They want to get new customers on board and see the bigger picture - even when dealing with startups.

5. Offer to pay a bit more

The MOQ is not always set by the material suppliers. The factory may simply deem your order volume to low to make it worth their while.

Keep in mind that many OEM manufacturers operate with a profit margin below 5%. If your order volume is too low it may just not be worth the risk.

Unless you’re willing to bid a bit more.

That said, don’t bid too much as you may end up paying the same amount as if you match their standard MOQ.

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