MOQ & Pricing
LET’S PLAN A BETTER FUTURE TOGETHER…
Minimum Order Quantity (MOQ)
Definition
The smallest number of units a supplier is willing to sell in a single order.
Supplier's perspective
Ensures that each production run is large enough to be cost-effective by covering fixed costs like labor and machinery setup.
Buyer's perspective
A commitment to a minimum quantity of product. Understanding MOQ is crucial for balancing inventory, cost, and market
Impact
Affects inventory levels, lead times, and storage costs.
PricingRelationship with MOQ
Pricing is directly tied to MOQ. A higher MOQ typically leads to a lower price per unit, and a lower MOQ often results in a higher price per unit.
Economies of scale
Placing larger orders (higher MOQ) allows for greater production efficiency, which can lead to significant cost savings per item.
Flexibility
Some suppliers may offer lower MOQs, but at a higher per-unit price, making it a viable option for businesses that are new or testing a product.
Negotiation
A buyer can negotiate better pricing by committing to a larger volume over a longer term, not just for the initial order. How to navigate MOQ and pricingCommunicate your forecast: Share your projected future needs with the supplier to help them plan and potentially offer better pricing upfront.
Negotiate terms
If a supplier’s MOQ is too high, try negotiating installment payments to manage cash flow or explore if the price can be lowered by committing to a larger volume in the future.
Balance inventory risk:
For high-margin products, a lower MOQ is ideal to keep inventory levels and risk low. For low-margin products, a higher MOQ might be necessary to achieve a lower per-unit cost.
Compare suppliers:
MOQs and pricing structures can vary significantly between suppliers, so it is beneficial to compare offers.
We want to meet the goal we are committed to putting in the best endeavours and working as a team efficiently for continual improvement of the quality management system.
IMPORTANT LINKS
Contact Info
Name: Md. Soliman Hossin
Designation: Managing Partner
Cell # +8801973550077
soliman@uttersourcing.com
Web: www.uttersourcing.com