MOQ (Minimum Order Quantity)
The smallest quantity a supplier will accept per order - it shapes how much cash gets tied up in a single purchase. A high MOQ can be the single biggest barrier for a small or new business testing a product idea, forcing a large cash commitment before there's any sales data to justify it.
In practice
MOQs exist because production and shipping have fixed costs a supplier needs to spread across enough units to make an order worthwhile - a new or small business often has to negotiate a lower MOQ or accept tying up more cash than it would prefer in a first order.
A supplier requires a minimum order of 1,000 units per SKU, meaning a new brand testing a product has to commit to that volume even before knowing if it will sell.
Why it matters
A high MOQ can be the single biggest barrier for a small or new business testing a product idea, forcing a large cash commitment before there's any sales data to justify it.
Worth knowing
- Often negotiable, especially in exchange for a slightly higher per-unit price on a smaller order.
- Some suppliers offer a lower MOQ for a first trial order, then require the full MOQ on repeat orders.
- A high MOQ combined with slow sell-through is a common path directly into dead stock.
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