If you are new to manufacturing and have been looking for quotes, you have likely come across the term MOQ, or minimum order quantity. This is the smallest number of units a factory will accept for an order. While it may seem initially counterintuitive that factories set MOQs instead of accepting as much business as they can, there can be several reasons a manufacturer will set them. Here we will delve into what factors may set an MOQ.

  1. Setup Costs

    Factories will have to set up machinery and tooling to delve into a production run. Setting up and calibrating tooling and molds takes time, and will cost more depending on the complexity of the product. If it costs a factory some hundreds of dollars to setup tooling for a tiny order, it won’t be appealing business to the manufacturer and in some cases will cost them money.

  2. Materials

    Factories will in many cases order materials in bulk to manufacture products. This is to lower the material costs to manufacture a product. Sometimes the cost to procure materials is prohibitive, making factories increase the volume of the order to offset costs.

    Other materials are difficult to work with and sometimes this will also cause higher MOQs to make it more worthwhile for manufacturers.

  3. Production Queues

    Depending on the time of the year, factories can have longer production queues. These will happen especially around the holidays, namely Christmas and before the Chinese New Year. Factories may be a bit more picky about the volumes they will accept these times as their queues fill up to get orders done before the holiday.

How to Get Around Low MOQs

  1. Manufacture Domestically

    Many overseas factories are geared to larger scales of operation. It may be easier to find a local shop willing to make smaller volumes of products. This will be considerably more expensive per unit, but is an option until you are ready to scale your business.

  2. Adjust your Products Design

    You can adjust the design of your product to make it easier to manufacture with cheaper materials. This may make it more appealing for factories to lower their MOQs depending on the effect of the changes. Anything that makes setup costs lower will go a long way to lowering MOQs.

  3. Use Qualified Sourcing Agents

    Using sourcing agents can also greatly help with lowering MOQs. They will often have existing relationships with factories, and thus will have more negotiating leverage. At Global Trade Specialists, we work with customers of all sizes to manufacture their products at the quality they deserve.

    If you need help getting products made at lower to higher volumes, please contact us to see if we may be a fit for you.