How to Negotiate Minimums

‘Minimum Order Requirements’ (MOQ’s) can be a stumbling block for many new buyers. It’s not uncommon for a fabric supplier to require an order of 1,000 yards, or a cut/sew supplier to require that you spend at least $2,000 in one order (or much more)! When you have limited funds allocated for production, or simply want to play it safe by starting with a small “test run” before investing a larger sum, it’s sometimes necessary to find ways around MOQ’s.

 Here are a few pointers on how to negotiate minimums:

Find out the reason for the minimum

Before you can figure out how to get a supplier to reduce their MOQ, you should find out why they have it in the first place. What problem are they avoiding by having their customers produce a certain amount? For many suppliers it’s the cost of setting up equipment. For others it’s because they are so busy, they want to work only with clients who provide them with the most profit. Understanding the reasoning behind the minimum will help you devise an offer that accounts for the supplier’s needs, as well as your own.

Propose a Compromise

Once you “get” the supplier’s position, propose an offer for a lower order quantity that accommodates their set-up and costs. For example, it’s time consuming for a fabric supplier to do the prep work required to custom dye material (mixing the custom color, sending you a swatch for approval, etc.). If you want 500 yards of a certain blue when the supplier’s minimum is 1,500 yards, you could offer to pay a flat ‘dye fee’ in addition to the regular cost of the custom fabric. While this fee represents an added cost, your order total is still most likely less than if you were to order three times the amount of fabric.

Related Reading:  Advice For New Factory Owners

Other compromises include:

  • Giving the supplier a deposit for a larger order, but just producing small amounts at a time.
  • Offering to pay a higher price per piece for a quantity under the MOQ.
  • Asking the supplier to group your order with another client who is buying a similar item. (This would most likely require you to be flexible with your schedule.)

 Look for an Alternative

If you try unsuccessfully to convince a supplier to lower their minimum order requirement, you might need to look for an alternate product or material. Say you’re sourcing buttons, and the supplier won’t budge on their 5,000 piece minimum for buttons imprinted with your logo. You could instead ask them for a smaller order of buttons that they already have in stock. Or maybe another one of their customers is imprinting a custom button similar to yours, and you could take some of the blanks from that order. It might mean that you don’t get exactly what you wanted on the first order (buttons that have your company logo), but it will allow you to start a relationship with a given supplier, and grow your business to the point where you can afford to meet the MOQ.