What Makes a MOQ? 2017-12-22T14:43:29+00:00

Project Description

What Makes a MOQ?

    MOQ stands for Minimum Order Quantity.

    When it comes to international business negotiation, the MOQ part is the only one that can compete with pricing part. In other words, the buyer may accept that you raise your price higher, but you need to lower the ordered quantity.

    In fact, the MOQ is not coming from nowhere, their exist are for some reasons.

    Then what makes a MOQ?

    1.Customized products

    Customized means unique, customized products are not common products that a factory would produce everyday.

    Customized products may require a unique logo printed, they may also need different raw material, they also could be products which require the unique model and tooling to create unique specification and shape.

    Let’s take some brand products as an example, they require the brand’s logo printed.

    No matter which printing method you choose, offset printing, flexo printing or other printing, they all need to create a printing plate, the price of which can’t be ignored and are different based on the printing methods.

    More important, the printing machines usually are very big, it cost a lot if you are just printing a few pieces. Only when the quantity hit a number, the seller could be break even.
    That is all OEM manufactures know, so here comes the MOQ requirement.

    2.Models using products

    Some of you who has visited factories may have seen there are a lot of machines running and running without a break.

    Actually if one of these machines stop, means the factory is losing some profit, cause the times machines taking break could have produced products which can sell and make profit also, but now they are just standing there taking a breathe.

    Assume that the machines only need to produce one item, that is to say, you don’t have to change the models to do other different items, which usually takes time, takes labor to switch the models and you got to get the engineers to adjust the machines to make sure they run smoothly, especially for some machines with complicated structures.

    The product line is the part which can’t waste any time. Any time wasted means efficiency wasted, means money wasted.

    Go ask the workers of the workshop, they hate all of the different products, all the new products and all innovations.

    That’s why MOQ is needed, it is to decrease the models change over time to keep the machines running as long as they can.

    3.Transportation requirement

    As for I know, there are many factories have a policy that their MOQ is one whole container, some of them may have no choice because of the products they produce require so.

    Let’s say, if our products shipped as a whole container are only just make like one thousand or even few hundreds dollars profit, if you sell just few pieces, what’s the meaning? No profit?

    Some sellers are just want to divide their clients by the MOQ, they only want to chase the customers require large and bulk purchasing.

    4.Negotiation tactic

    Sometimes, as a salespeople, you need to deal with a lot of “customers” with a lot of enquiries.

    The “customers”, after analyzing, they shouldn’t be your target customers, then the MOQ is a good tactic to use to politely refuse the “customers”.

    To sum up, MOQ is necessary for internal and external reason.

    Know what makes a MOQ and use it when you need it.

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