6 Strategies for Getting the Best Deal on your MOQ
Inventory management is one of the most important tasks when running a successful e-commerce business. You must make sure you have enough to meet your customer demand without getting stuck with high amounts of unsold stock. Thus, figuring out the correct inventory levels is crucial to your business’s fulfillment success.
Purchasing inventory or raw materials can be quite complex. You will likely have to deal with multiple suppliers, each of whom might impose different constraints on your order. One common constraint is the Minimum Order Quantity.
In this post, we will define Minimum Order Quantity and how buyers can effectively navigate it.
What is MOQ?
Minimum Order Quantity, or MOQ, is pretty self-explanatory. It refers to the minimum number of units needed to purchase while placing an order with a supplier. Here is an example:
A manufacturer might set a MOQ of 500 units of their products. This means that you cannot purchase less than 500 units in a single order, even if you need less. You will either have to buy more than you need or find a different supplier with a lower MOQ that matches your requirement.
Suppliers set different minimum order quantities, typically based on the product they sell. High-end products that tend to be expensive and have a higher cost of shipping will usually have a low minimum order quantity, whereas cheaper products usually have a higher minimum order quantity. It is imposed by wholesalers/manufacturers to ensure that you purchase enough quantity so that they can be cost-effective in their production and maintain a profit margin.
MOQ is often dreaded by the buyer, so let’s look at 6 different ways you can get the best deal on your purchase.
Negotiate!
Negotiation is an incredibly important skill in trade but is often overlooked. You can try to negotiate with your suppliers for a lower MOQ or lower prices. There is no harm in trying and the worst they can do is say no. Suppliers might be willing to bargain if they’re experiencing a slow turnover or if they’re overstocked. Having good relations with your suppliers also makes negotiation a lot easier!
Buy from an online market
In today’s day and age, the internet has a solution for pretty much everything! If you’re having trouble finding suppliers with the right MOQ for your business, you can try switching your search to an online B2B marketplace like Alibaba or Wholesale Central. These online market platforms allow you to look around and compare prices from a wide variety of suppliers so you can find the one that best matches your needs. Sellers face intense competition in these online markets, leaving no option but to offer low and no MOQ requirements to attract customers. Because you’re trading over the internet, be sure to research your supplier and read online reviews to ensure the business is legitimate.
Approach trading companies
Another way to potentially avoid MOQ is purchasing goods from a trading company. Trading companies are intermediaries who place large orders on behalf of multiple buyers. By brokering a deal with suppliers, trading companies split the MOQ among multiple buyers and lowers the price. This way, you do not have to worry about purchasing unnecessary goods and only pay for what you need.
Be a ‘first-time buyer’
If you tell your supplier, you are a first-time buyer, you can convince then to lower their MOQ requirements. Being a first-time customer, you can ask the supplier that you would like to try their goods and place a smaller order. The supplier will, more often than not, agree to it. They might, however, charge a little more for the smaller order, so make sure to work out the financial aspect before finalizing the order. If you are relying on this tactic, it is important to note you will have to keep finding new suppliers any time you want to make a purchase.
Mix and match your order
Instead of ordering more of a single product to meet the MOQ, you can also try to order a variety of different products from the same supplier. This way, you can split the MOQ requirement among different products and only buy in quantities you need. This isn’t a viable option for all cases but can be ideal if you’re looking for multiple products and want to lower the MOQ.
Build a relationship with your supplier
This is the opposite of the ‘first-time buyer’ trick. Instead of approaching new suppliers for each order, build a strong relationship with a single supplier by staying consistent and loyal. Creating good relations with your manufacturer will provide many benefits and opportunities like partnerships, discounts and lower MOQs.
MOQs are something you will frequently encounter while purchasing from wholesalers, but they are flexible and can be adjusted. Most businesses will be ready to negotiate and move their requirements around. After all, the main goal for any business is to generate sales.
After purchasing your inventory, you will need inventory management solutions. Here at Fulfyld, we provide various services to streamline your e-commerce fulfillment needs. We have connections across the globe and give you access to a network of affordable, reliable manufacturers and product designers. Contact us today for more information!
