You might have seen the term minimum order quantity on supplier pages or product catalogs. It often appears when you’re exploring manufacturers, wholesalers, or dropshipping platforms. But what does it actually mean for your business?
Let’s unpack it in plain language.
Minimum Order Quantity Definition
Minimum order quantity, often shortened to MOQ, is the smallest number of units a supplier is willing to sell per order. For example, a clothing supplier might set their MOQ at 100 pieces per style. If you want to order less, they may not fulfill it.
This is common in manufacturing, where producing or packaging small amounts isn’t cost-effective for the seller.
Why Minimum Order Quantity Matters
Understanding MOQ helps you plan your budget, inventory, and storage needs. If you’re working with a new supplier or testing a product, a high MOQ might be a dealbreaker.
On the flip side, higher quantities usually come with better per-unit pricing. So MOQs also impact your product margins.
How to Calculate Minimum Order Quantity
There’s no single minimum order quantity formula that works for every business. It usually depends on factors like:
- Production cost
- Supplier pricing structure
- Expected customer demand
- Storage capacity
Some businesses calculate MOQ with this approach:
Minimum Order Quantity = Fixed Costs / (Selling Price – Variable Cost per Unit)
But for most small brands or startups, it’s more about striking a balance between supplier terms and what they can realistically sell.
Minimum Order Quantity in Dropshipping
For businesses using dropshipping models, the idea of Minimum order quantity drop shipping may sound contradictory. But even in dropshipping, some suppliers set MOQs. For example, they may require a certain number of orders per month or a prepaid commitment before they list your products.
That’s why it’s always important to review supplier terms even in low-inventory models.
Final Thoughts
Minimum order quantity is a key detail when sourcing products, especially if you’re working with new suppliers or trying to control cash flow.
Teamship helps simplify these kinds of supplier interactions and gives brands the tools to manage warehousing, product sourcing, and fulfillment all in one place. Clear inventory, better planning, and easier logistics, that’s what we’re here for.
Frequently Asked Questions
1. Can I negotiate an MOQ with suppliers?
Yes. Many suppliers are open to lowering the MOQ, especially for first-time buyers or sample orders.
2. Is MOQ the same for all products?
No. MOQs vary by product type, material, and production method. A high-cost item may have a lower MOQ than a mass-produced one.
3. Does MOQ affect shipping costs?
It can. Larger orders may qualify for bulk shipping rates, but they may also require palletization or higher freight costs depending on the volume.