MOQ – Minimum Order Quantity
The minimum quantity a supplier requires. Affects cash flow and risk on new products.
In practice
A high MOQ plus an unproven product is a gamble. Always try a sample order before committing to a full MOQ.
Common misconception
'MOQ is fixed and non-negotiable.' It's usually negotiable. Have a supplier on Alibaba? Offer 10% more per unit in exchange for a lower MOQ.
How to fix it
High MOQ? (1) a sample order of 10-20 units, (2) a higher price with a lower MOQ, (3) consolidate with another business, (4) find a local supplier.
Example
A jewelry store: a supplier required 5kg. Paying $3.30/gram instead of $2.75 dropped the MOQ to 2kg — a 60% risk reduction.
Priority
Always start with a sample order before committing to a full MOQ.
Related terms
Keep learning. Metrics that touch the same area:
- Cash FlowFinanceThe movement of cash in the business. 'Profitable on paper, broke in the bank' — a common problem in growing stores.
- Lead TimeOperationsThe time from ordering with a supplier to receiving inventory. Critical for calculating the reorder point.
- DropshippingOperationsSelling without holding inventory — a supplier ships directly to the customer. Low margin (5-20%), no quality control.
- SKU – Stock Keeping UnitOperationsA unique identifier for each product variation. The basis for precise inventory management.
- Inventory ManagementOperationsTracking, ordering, and maintaining inventory. Too much means cash tied up. Too little means stockouts.
- StockoutOperationsA product unavailable for shipping. Immediate lost sales plus damaged trust.
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