E-commerce terms can be extensive, and at times, it can feel like you’re drowning in eCommerce jargon. Here’s another one for you – MOQ, a common term used in the industry. But what does MOQ stand for, and what does MOQ mean exactly? Sit back and take a read as we take you through all the intricate details.

So, what does MOQ mean? Well, firstly we need to ask, what does MOQ stand for right? In short, MOQ stands for Minimum Order Quantity. More specifically, it refers to the least number of products or units that a supplier is willing to produce at one time. Everyone needs to make sure they aren’t selling themselves short, so MOQs are set by suppliers to ensure they are able to cover production costs and make a profit for themselves.
MOQs can vary from supplier to supplier, so it’s perhaps worth discussing this with your supplier, as the MOQ can sometimes be negotiable as well. MOQs are usually defined by the number of units that have been produced, or they can sometimes be defined by currency as well. It completely depends on the supplier.

What are the advantages and disadvantages?

You may be thinking that’s all great, but what does MOQ mean for my e-commerce store? Are there pros and cons? Well, of course, much like anything else, MOQs have their advantages and disadvantages. Let’s explore them in greater detail.
The biggest advantage of MOQs is that they give you the best price per unit. Often, the more units you buy, the lower the price is per unit due to the suppliers’ bulk pricing. Feel like the MOQ is too high? Another advantage to MOQs is that you can try and negotiate the MOQ, terms, and or price.
You can also establish a healthy, long-term relationship with your supplier(s) without having to worry about needing to outsource a new supplier at some point down the line. On the flipside of things, suppliers may not negotiate MOQs, leaving you with the option of trying to find someone else or accepting the suppliers MOQ.
MOQs can be intimidating, especially if you are a new business. The upfront cost can be high depending on the MOQ and price per unit. This could hinder the growth of your business and really put a strain on things. With this in mind, regardless of the scale and success of your business, there’s always going to be worry that the product won’t sell well, leaving you with excess stock, and therefore causing further issues.

Can you advise me?

Of course, we have lots of tips and tricks to share with you, so you can effectively meet and manage your MOQs.
First of all it’s research. Research, research, research. Lots of research!!!
We can’t stress this enough, finding what works best for you is critical, but that requires lots of research and comparison. We suggest you start by sourcing a supplier who has MOQ quantities you’re at least somewhat comfortable with. This is a good starting point especially if you are looking to negotiate. If you haven’t found a supplier who’s MOQs you’re 100% comfortable with, or if negotiations have been unsuccessful, the next step is to find another supplier since products usually tend to have multiple sellers.
Keep your options open until you’ve found exactly what it is you’re looking for. Don’t settle unless you absolutely have to.
Another thing that may be worth considering is to negotiate the actual price per unit- you can offer to pay higher prices for a smaller number of units. Of course, you would need to slightly increase the retail price to ensure you can cover the initial cost and make a profit, but doing this may help to ensure you don’t end up with excess stock. If the product does do well, you can always try to renegotiate to suit your demands.
However, it is worth mentioning that MOQ prices can change since they are usually a reflection of the current economic and marketing trends. As we know, they can change frequently, so this is definitely something to keep in mind.

Supply chain support with TSP

All seems a bit overwhelming and confusing, right? We know how it feels. But if you’re still needing support and want to know more about what MOQ means, then look no further than The Storage Place.
We offer supply chain support, and inventory management support with our unique range of fulfilment services tailored to the needs of your e-commerce fulfilment. Get in contact with one of our fulfilment experts today!

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