· What is MOQ
MOQ (minimum order quantity) is the minimum order quantity, which sellers generally encounter when looking for suppliers to purchase products. For an order, the supplier is only willing to start production if the order quantity exceeds MOQ.
General suppliers will set up MOQ, especially Alibaba suppliers, their MOQ is usually very high, for novice sellers, it is completely unaffordable. However, it is not difficult to solve the MOQ problem.
Dealing with Chinese suppliers is also skillful. Sellers should understand the supplier’s concerns and adopt corresponding negotiation strategies.
· The reason why MOQ is generally higher
The minimum order quantity generally depends on the cost of the supplier’s production, which includes not only labor and material costs, but also the cost of opening the machine, and even other special costs. It is not only complicated and time-consuming but also the overall cost. higher.
Because the production volume is large, the cost of a single product will be reduced, so the unit price provided by the supplier is usually the most favorable. The minimum order quantity for each order is usually at least thousands, or even as high as 10,000. However, some suppliers may be willing to provide test orders, the quantity is usually 50-200 pieces.
B2B suppliers have higher MOQ because their customers are not ordinary small sellers, but large companies with stronger purchasing power. Such suppliers are not suitable for small sellers.
· Five tips for small wholesale
Some suppliers set their MOQ higher than the actual MOQ because they want to prevent small wholesale orders in order to maintain a higher profit margin. As a seller, you can understand it. This will help you get the right idea to start a negotiation.
1. Place a sample order
Before placing an order formally, you must first ask the supplier for samples. After confirming the quality of the products produced by each supplier, calculate the minimum order quantity. Note that the quotation and MOQ of each supplier’s product may be different.
Note that when you purchase a sample order from a supplier, you must tell the other party that you intend to continue cooperating. Tell him that you need to inspect the goods before you ask for samples, and the size of the final order will depend on the quality of the samples.
2. Say that you are the first time seller
As a seller, I believe you can consider from the perspective of suppliers doing business. Therefore, do not tell the supplier that you are not sure whether the product can be sold, or that you do not have enough funds to buy more quantities. In this way, the supplier will not care about you, and even less willing to cooperate with you.
You have to say that this is the first time you purchased products from him. In the beginning, you want to buy small order for testing. The quantity is about 20-25% MOQ. Generally speaking, the supplier will immediately accept this request, and they will think that you really want to buy instead of just asking for the price.
But be psychologically prepared, the final single product price may be higher than the MOQ price. If you think it doesn’t matter, you can place an order for purchase.
If your product needs to be customized, the supplier generally will not accept small orders, because if they want to produce customized products, they may have to purchase special parts. But you can still try to negotiate with the supplier to reduce the MOQ by 30% or more.
Let the supplier know that you attach great importance to the successful completion of the first order. Put forward your requirements for product production first, and then negotiate with the other party to reduce the MOQ. Tell him that you want to collect feedback from the market to improve the product before you are ready to place a large order.
Note that when negotiating, the reduction range is best controlled within 30%. If the MOQ you quote is too low, the supplier will not be able to get back the cost, and the negotiation will not be successful. If the supplier is unwilling to compromise, then try the next strategy.
3. Understand the supplier and give him confidence
If the previous negotiation fails, then show that you can understand his position. Tell the supplier that you will never let him lose money and that you have the idea of long-term cooperation.
Negotiate from the supplier’s standpoint. If they understand, they may accept your MOQ.
4. Bring your sincerity and affection
Continue to build a rapport with the supply.
You don’t need to be very professional, as long as your overall tone is sincere. During the conversation, you can take the initiative to explain your ability to sell products and assure them that you are a buyer who is really interested in buying. If their MOQ seems to be more difficult than others.
Reiterate that you will spend the cost on promoting this new product. Provide detailed information, such as the percentage of free gifts and how much you will spend on advertising. Be straightforward.
When negotiating, you must clearly let them know: Although you think this supplier is the most suitable, you currently have other suppliers to consider. If they cannot meet your MOQ value, you can only look for other suppliers. business.
The best response time to the other party is 48 hours. If the other party is just an employee, there is time to ask the boss and give you a specific answer.
You can also buy the stock that they have already produced. Generally, the factory only produces when there is an order demand, but occasionally orders are temporarily canceled or there is excess output. In this case, you can usually use the MOQ you proposed Purchase products because the manufacturer wants to sell this batch of goods as soon as possible.
5. Modify other conditions
There may be individual manufacturers or actors who have chosen your MOQ for your product. However, they are very small for chocolates and you, but they can’t accept MOQ. For this, you can continue the negotiation with a slight change in other conditions. Specifically, it depends on which of the following manufacturers have difficulties:
Machine start-up cost
If the supplier says the problem is the start-up cost of the machine, you can tell them that you are willing to split the cost.
The supplier cannot accept your MOQ situation because they have to purchase special parts to handle it. You can accept your MOQ.
The supplier cannot accept your MOQ because it cannot recover the cost. Then you can increase the product quotation or increase the MOQ, for example, increase the MOQ from 30% to 50%. Everything can be discussed.
If they refuse to continue and do not provide any other terms, then you can be sure that they really cannot lower the MOQ.
·What to do if negotiation fails
If you have been unable to negotiate with this supplier, then go find other suppliers to negotiate. The key to negotiation is whether you can accept the price point.
If you want to conduct market research on the product first, you can first find a small supplier to cooperate with. After that, the business slowly developed, and the order quantity from suppliers increased greatly.
Be careful, when negotiating with the supplier is out of date, let things leave some leeway, and let the other party end their headaches unhappily, because you may still come back. They may feel pressured and tell you politely. The supplier said that you need to release the product for testing before you formally place a large order.
If you follow your own purchasing level, then MOQ will be reduced by at least 30%. But remember, you can’t order MOQ products in quantity at the lowest price. Therefore, sometimes products are not worth small wholesale. , Because when all the costs are added up, you may have to pay a fairly high price.
One suggestion is to work hard with the supplier and know what to give up.