The easiest way to ask suppliers to lower MOQ

By justchinait
 / 
January 6, 2021
 / 

Generally, suppliers will set up a MOQ, especially Alibaba suppliers, the MOQ is usually very high, for novice buyers, it is completely unaffordable.

It is not difficult to solve the MOQ problem. Buyers should understand the concerns of suppliers and adopt corresponding negotiation strategies.

In today’s article, we will introduce how to negotiate with suppliers to allow them to accept your quantity.

What is MOQ?

MOQ is the minimum order quantity, which sellers generally encounter when looking for suppliers to purchase products. For example, for a product, the supplier is only willing to start production if the order quantity exceeds 1,000 pieces. The minimum order for this product is 1,000 pieces.

The minimum order quantity generally depends on the cost of the supplier’s production, which not only includes labor and material costs, but also includes the cost of opening the machine, and even other special costs.

The production volume is large, the cost of a single product will be reduced, so the unit price provided by the supplier is usually more favorable. The minimum order quantity for each order is usually at least thousands, or even as high as 10,000 pieces.

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.

If the MOQ is small, the supplier will increase the unit price of the product to avoid loss of its own interests. You can find a small supplier to order, but you cannot get the goods at the best price.

So, is there no way for small sellers? In fact, this is not the case. Many sellers have negotiated with their suppliers to settle the MOQ issue. The following 5 strategies will help you succeed in negotiating with suppliers:

5 tips for negotiation

Some suppliers set their MOQ higher than the actual MOQ because they want to prevent small orders in order to maintain a higher profit margin. As a seller, you can definitely 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 buy a sample order from a supplier, you must tell him that you intend to continue to cooperate. Tell him that you need to inspect the goods first, and the final order size 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 it 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 purchase products from him. In the beginning, you want to buy a small order for testing. The quantity is about 20-25% MOQ. Generally speaking, suppliers will consider accepting this request, and they will think that you really want to buy instead of just asking 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 lower the MOQ.

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 him 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 in the negotiation, the reduction range is best controlled within 30%. If the MOQ you quote is too low, the supplier will not be able to recover the cost, and the negotiation will not be successful. If the supplier is not willing to compromise, then try the next strategy.

3. Consider from the perspective of the supplier

Many people won’t consider issues from the other side’s point of view, but the business is always based on win-win cooperation, you shouldn’t allow suppliers to unilaterally compromise. You can express from the other side’s perspective and let the supplier think you can understand his difficulties. You should make it clear to the supplier that they won’t suffer losses due to your business. Tell them that you want to establish a long-term business relationship with them, and communicate your business model and situation with them. For example, your marketing plan, advertising budget, etc. A good salesman will judge whether you are a potential customer. Be sincere and not blindly show your professionalism

4. Put some pressure on suppliers

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, you can only find other suppliers.

Give the supplier 2-3 days to consider. 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 the order is temporarily canceled or the output is excessive. In this case, you can usually use the MOQ you proposed to Purchase products because the manufacturer wants to sell the goods as soon as possible.

5. Modify other condition

Maybe some manufacturers are still unwilling to provide you with products based on your MOQ. However, they are not necessarily unwilling to cooperate with you, but they just can’t accept this MOQ. At this time, you can continue the negotiation with a slight change in other conditions. Specifically, it depends on which of the following manufacturers have difficulties:

Machine startup cost

If the supplier says the problem is the start-up cost of the machine, you can tell them that you are willing to share part of the cost. This shows that you are flexible and take your cooperation with them seriously.

Special parts

Maybe the supplier cannot accept your MOQ because they have to purchase the special parts to customize it. In this case, you can ask him if you are willing to pay for the parts cost of this order, whether they can accept your MOQ. After all, your first order must also ensure that the parts are suitable.

Offer

If the supplier cannot accept your MOQ because it cannot recover the cost, then you can increase the product quotation or increase the MOQ value, for example from 30% MOQ to 50% MOQ. Attach a purchase order and send it to the other party to let them know that everything can be discussed.

If they still refuse and do not provide any other terms, then you can be sure that they really cannot lower the MOQ.

What if the negotiation fails?

If you have been unable to negotiate with this supplier, you have to find other suppliers to negotiate with. The key to negotiation is the price point you can accept.

If you want to conduct market research on the product first, you can first find a small supplier to cooperate with. After the business develops, look for large suppliers with higher MOQ.

Note that when negotiating with the supplier, leave some room for things, and don’t end the negotiation unhappily with the other party, because you may come back and find them again. Don’t feel pressured to see that the MOQ is very high. Tell the supplier politely that you need to release the product for testing before placing a large order.

3 platforms to find suppliers

If you still cannot reach an agreement with the supplier on the MOQ, you can also find suppliers on other platforms. The main websites are:

1. dhgate.com

dhgate.com is a product wholesale website, mainly to cooperate with small sellers, so the minimum order quantity is generally relatively small. You can pay the supplier after confirming the receipt. Although the unit price of the product may be higher, you can reduce the risk.

2. Aliexpress.com

AliExpress is a well-known B2C website, you can find small suppliers on the website, and the MOQ is not high. However, it is not easy to verify the supplier here.

3. Globalsources.com

Global Sources is a third-party platform for sellers and suppliers to provide transactions. If you can’t find a supplier yourself, you can go to this website to check it out.

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