4 Tricks To Get Alibaba Suppliers To Lower Their Minimum Order Quantity (MOQ)

Published on: December 9 2022 by MyWifeQuitHerJob Ecommerce Channel

4 Tricks To Get Alibaba Suppliers To Lower Their Minimum Order Quantity (MOQ)

4 Tricks To Get Alibaba Suppliers To Lower Their Minimum Order Quantity (MOQ)

4 Tricks To Get Alibaba Suppliers To Lower Their Minimum Order Quantity (MOQ)

startTime	durationTime	text
00:00:00	00:00:03	don't have the money to buy 500 units
00:00:01	00:00:05	from your wholesale supplier and do you
00:00:03	00:00:07	wish you could order less up front from
00:00:05	00:00:09	your factory well here's the exact
00:00:07	00:00:11	process that i use to negotiate down the
00:00:09	00:00:15	minimum order quantities for my first
00:00:11	00:00:15	bulk order of private label products
00:00:19	00:00:23	now the minimum order quantity is the
00:00:21	00:00:25	lowest quantity of products or services
00:00:23	00:00:27	that a supplier is willing to produce or
00:00:25	00:00:29	provide now every supplier will have
00:00:27	00:00:30	different moqs for different products
00:00:29	00:00:32	and there are different size factories
00:00:30	00:00:35	that cater to different size businesses
00:00:32	00:00:36	now some suppliers might have an mmq of
00:00:35	00:00:39	a thousand units while others might have
00:00:36	00:00:41	an moq of 10 000 units the minimum order
00:00:39	00:00:43	quantity will vary depending on the
00:00:41	00:00:45	supplier and the product or service
00:00:43	00:00:46	being offered now if you find that your
00:00:45	00:00:49	factories are quoting you extremely high
00:00:46	00:00:50	moqs then that factory is likely out of
00:00:49	00:00:52	your league you should look for
00:00:50	00:00:54	factories that work with businesses your
00:00:52	00:00:56	size now you might think that this is
00:00:54	00:00:58	unfair but when it comes to working with
00:00:56	00:01:00	factories it doesn't make sense for a
00:00:58	00:01:01	manufacturer to produce items for you
00:01:00	00:01:03	unless they can make money on the
00:01:01	00:01:05	transaction now if you think about a
00:01:03	00:01:07	factory as an assembly line it's not
00:01:05	00:01:09	cost effective for a manufacturer to
00:01:07	00:01:11	create a brand new process for your
00:01:09	00:01:14	product unless you can exceed a certain
00:01:11	00:01:15	volume threshold after all manufacturers
00:01:14	00:01:18	must bear the large upfront cost of
00:01:15	00:01:19	training machinery and tooling now
00:01:18	00:01:21	making money with your own private label
00:01:19	00:01:24	products is all about scale and you have
00:01:21	00:01:25	to be willing to meet a factory's moq in
00:01:24	00:01:27	order to get the lowest prices possible
00:01:25	00:01:28	for your products
00:01:27	00:01:30	now as i mentioned earlier every vendor
00:01:28	00:01:31	is going to have a different moq for a
00:01:30	00:01:34	given type of product some wholesale
00:01:31	00:01:35	suppliers only work in extremely large
00:01:34	00:01:37	quantities whereas other vendors are
00:01:35	00:01:40	willing to sell you as few as 100 units
00:01:37	00:01:42	at a time and this mlq is dictated by
00:01:40	00:01:44	the type of vendor that you're working
00:01:42	00:01:46	with now are you working with a factory
00:01:44	00:01:48	a factory is a type of supplier that
00:01:46	00:01:50	actually manufactures your products for
00:01:48	00:01:51	sale in an ideal world you want to work
00:01:50	00:01:53	with the manufacturer directly because
00:01:51	00:01:54	your prices are going to be lower
00:01:53	00:01:56	there's going to be no middlemen and no
00:01:54	00:01:58	additional markups you can create custom
00:01:56	00:02:00	products and quickly make adjustments
00:01:58	00:02:02	during the manufacturing process but the
00:02:00	00:02:04	main downside of working with a factory
00:02:02	00:02:05	is that they have higher moq's in
00:02:04	00:02:07	addition it's often difficult to work
00:02:05	00:02:09	with the factory directly because it
00:02:07	00:02:12	requires navigating through a maze of
00:02:09	00:02:14	complex relationships for example many
00:02:12	00:02:15	factors in china won't even tok to you
00:02:14	00:02:18	unless you go through a rep or a
00:02:15	00:02:19	sourcing agent now that being said if
00:02:18	00:02:21	you can buy product in larger quantities
00:02:19	00:02:24	then working with a factory is the best
00:02:21	00:02:26	way to get the lowest prices possible
00:02:24	00:02:28	you can also work with a trading company
00:02:26	00:02:29	a trading company doesn't actually make
00:02:28	00:02:31	their own products instead they work
00:02:29	00:02:33	with multiple factories to create
00:02:31	00:02:34	products for their clients they already
00:02:33	00:02:36	have close relationships in place with
00:02:34	00:02:38	trusted manufacturers and act as a
00:02:36	00:02:39	middleman to facilitate product creation
00:02:38	00:02:41	now
00:02:39	00:02:42	the main benefit of going with the
00:02:41	00:02:45	trading company is that they can offer
00:02:42	00:02:47	you lower mlqs in a much larger product
00:02:45	00:02:48	selection because they work with
00:02:47	00:02:50	multiple factories across many different
00:02:48	00:02:53	disciplines they can often help you with
00:02:50	00:02:54	a variety of your sourcing needs now the
00:02:53	00:02:56	downside of course is that they're going
00:02:54	00:02:58	to be more expensive in addition you
00:02:56	00:02:59	have less control over the details of
00:02:58	00:03:01	your final product because all
00:02:59	00:03:03	communication with the factory must go
00:03:01	00:03:04	through the trading company now the
00:03:03	00:03:06	grand scheme of things it doesn't matter
00:03:04	00:03:08	whether you work with a factory or a
00:03:06	00:03:10	trading company as long as you can make
00:03:08	00:03:12	a decent profit with your goods in fact
00:03:10	00:03:14	finding the right supplier is often a
00:03:12	00:03:17	self-selecting process after all you may
00:03:14	00:03:18	not be able to meet the moq of a factory
00:03:17	00:03:20	and a factory may not even be willing to
00:03:18	00:03:22	speak with you unless you have the right
00:03:20	00:03:24	relationships in place now over the
00:03:22	00:03:26	years running my store over at bumblebee
00:03:24	00:03:28	linens i've worked with both factories
00:03:26	00:03:30	and trading companies with great success
00:03:28	00:03:32	and your order size will dictate who you
00:03:30	00:03:34	get to work with now once you have more
00:03:32	00:03:36	purchasing power you can gradually work
00:03:34	00:03:37	your way up the chain and push down your
00:03:36	00:03:39	product costs
00:03:37	00:03:41	now how do you find the moq well you
00:03:39	00:03:43	just ask here's a sample script that i
00:03:41	00:03:44	use hi vendor my name is steve and i'm
00:03:43	00:03:46	the purchasing agent from bumblebee
00:03:44	00:03:47	linens a store in the u.s that sells
00:03:46	00:03:48	handkerchiefs we're interested in
00:03:47	00:03:50	carrying many of the items that you have
00:03:48	00:03:53	to offer i would like to get pricing and
00:03:50	00:03:56	availability for the following items
00:03:53	00:03:57	please send pricing in 500 1000 and 5000
00:03:56	00:04:00	unique quantities if you can send us
00:03:57	00:04:02	your product catalogs lead times and moq
00:04:00	00:04:03	we would greatly appreciate it
00:04:02	00:04:04	now one thing you'll notike about the
00:04:03	00:04:06	letter i just toked about is that i
00:04:04	00:04:09	specifically asked for pricing in 500
00:04:06	00:04:11	1000 and 5 000 unit quantities and i use
00:04:09	00:04:13	these numbers to fill out the supplier
00:04:11	00:04:15	if the vendor is not in my league then
00:04:13	00:04:17	they won't even reply on the flip side
00:04:15	00:04:18	attaching real numbers to my initial
00:04:17	00:04:21	request lets the vendor know that i'm
00:04:18	00:04:22	serious about purchasing quantity now
00:04:21	00:04:23	depending on whether you're working with
00:04:22	00:04:25	a large factory a small town
00:04:23	00:04:27	manufacturer or a trading company you'll
00:04:25	00:04:29	often receive a variety of moqs from
00:04:27	00:04:31	your suppliers and some are just going
00:04:29	00:04:32	to be way too high and you should simply
00:04:31	00:04:35	ignore these suppliers altogether they
00:04:32	00:04:37	are clearly out of your lead some moqs
00:04:35	00:04:38	will be suspiciously low which generally
00:04:37	00:04:41	means that you can get a better deal
00:04:38	00:04:42	elsewhere now the key is to work with a
00:04:41	00:04:45	supplier that is within your range in
00:04:42	00:04:48	terms of moq and price for example if a
00:04:45	00:04:50	supplier has an moq of 500 units and
00:04:48	00:04:51	you're willing to buy 300 or 400 units
00:04:50	00:04:53	well then that's well within the
00:04:51	00:04:55	ballpark but if you were off by more
00:04:53	00:04:57	than a factor of two or three then i'd
00:04:55	00:05:00	probably move on now here's how to
00:04:57	00:05:01	negotiate your moq's down now if you're
00:05:00	00:05:03	in the ballpark of a supplier's moq then
00:05:01	00:05:05	there are a variety of tactiks that you
00:05:03	00:05:07	can use however the effectiveness of
00:05:05	00:05:08	these strategies that i'm about to tok
00:05:07	00:05:11	about largely depend on whether the
00:05:08	00:05:13	supplier respects you as a buyer if the
00:05:11	00:05:14	supplier does not believe that you're
00:05:13	00:05:16	legit then they will likely not
00:05:14	00:05:18	negotiate with you at all in fact they
00:05:16	00:05:20	may ignore you altogether or give you
00:05:18	00:05:22	prices that are ridiculously high to
00:05:20	00:05:23	make you go away
00:05:22	00:05:26	therefore the first big tip that i have
00:05:23	00:05:29	to give is to always act larger than you
00:05:26	00:05:31	really are project a sense of confidence
00:05:29	00:05:32	in your communications show the supplier
00:05:31	00:05:34	that you know what you're doing even if
00:05:32	00:05:35	you are a beginner because think about
00:05:34	00:05:37	it this way every good supplier is
00:05:35	00:05:39	bombarded with hundreds of sourcing
00:05:37	00:05:42	requests day in and day out and you must
00:05:39	00:05:44	stand out so do your research and try to
00:05:42	00:05:45	not ask any bone-headed questions that
00:05:44	00:05:47	can be googled
00:05:45	00:05:50	so here's tactik number one try to close
00:05:47	00:05:52	the deal right away now in some cases a
00:05:50	00:05:53	vendor will give you a high mlq but they
00:05:52	00:05:55	might be willing to produce less units
00:05:53	00:05:57	up front if they think that you're going
00:05:55	00:05:59	to be a long-term customer now for my
00:05:57	00:06:01	store there have been occasions where i
00:05:59	00:06:03	couldn't meet the mlq but i was willing
00:06:01	00:06:05	to pay for sixty percent of the units
00:06:03	00:06:08	immediately in upfront now typical
00:06:05	00:06:10	payment terms are 30 down and 17 upon
00:06:08	00:06:11	completion but when we directly asked
00:06:10	00:06:13	for their bank information and offered
00:06:11	00:06:15	to wire them the money immediately the
00:06:13	00:06:17	supplier took the deal
00:06:15	00:06:19	negotiation tactik number two offer to
00:06:17	00:06:20	pay higher price now when it comes to
00:06:19	00:06:22	negotiating with the vendor it often
00:06:20	00:06:25	comes down to the money and not the
00:06:22	00:06:27	actual moq now if producing less units
00:06:25	00:06:29	makes sense financially for the supplier
00:06:27	00:06:30	then they'll likely go for it as a
00:06:29	00:06:33	result it's about finding that middle
00:06:30	00:06:34	ground where both parties are satisfied
00:06:33	00:06:37	now one thing that i like to do is offer
00:06:34	00:06:39	to pay higher prices for less units for
00:06:37	00:06:41	example if the mlq is 500 units at a
00:06:39	00:06:44	buck apiece i might offer to buy 300
00:06:41	00:06:46	units at a buck 25 a piece now if you're
00:06:44	00:06:48	in the ballpark of a vendor's profit
00:06:46	00:06:50	requirement you can sometimes get them
00:06:48	00:06:52	to agree to a lower mlq
00:06:50	00:06:54	here's negotiating tactik number three
00:06:52	00:06:56	offer to increase the overall order size
00:06:54	00:06:58	now this strategy is generally more
00:06:56	00:07:00	applicable if you're trying to purchase
00:06:58	00:07:02	many different styles of the exact same
00:07:00	00:07:03	product now with my company we often
00:07:02	00:07:05	purchase our handkerchiefs in a variety
00:07:03	00:07:08	of different colors but in general each
00:07:05	00:07:09	style carries its own moq for example we
00:07:08	00:07:11	have to purchase a minimum amount of
00:07:09	00:07:13	ivory hankies to make the cost of the
00:07:11	00:07:15	dyeing process worth it to the vendor
00:07:13	00:07:17	now because we don't sell nearly as many
00:07:15	00:07:18	ivory hankies as we do white
00:07:17	00:07:20	handkerchiefs we simply offer to
00:07:18	00:07:22	increase our overall order of white
00:07:20	00:07:23	hankies by a certain percentage to
00:07:22	00:07:25	offset the cost and usually that's
00:07:23	00:07:28	enough to sway the vendor to waive the
00:07:25	00:07:30	mlq for our ivory hankies once again it
00:07:28	00:07:32	all comes down to the money negotiating
00:07:30	00:07:34	tactik number four paying and
00:07:32	00:07:36	installments now if you can't pay for a
00:07:34	00:07:38	supplier's moq all in one shot then it's
00:07:36	00:07:40	worth asking if they will produce the
00:07:38	00:07:42	entire production run and ship you your
00:07:40	00:07:44	order in installments for example if
00:07:42	00:07:46	their moq is a thousand units then offer
00:07:44	00:07:48	to pay for half up front and then the
00:07:46	00:07:50	remaining half in three months not every
00:07:48	00:07:52	vendor will be willing to do this and
00:07:50	00:07:55	once again it all hinges on whether the
00:07:52	00:07:56	vendor respects you as a company if they
00:07:55	00:07:58	believe that you're good for the money
00:07:56	00:08:00	then they may agree to this arrangement
00:07:58	00:08:02	but it doesn't hurt to ask
00:08:00	00:08:04	now what do you do when you exceed the
00:08:02	00:08:07	moq now ironically one of the biggest
00:08:04	00:08:09	mistakes that i see my students make is
00:08:07	00:08:11	that they don't order enough product for
00:08:09	00:08:12	their first order for example one of my
00:08:11	00:08:14	students was extremely conservative and
00:08:12	00:08:16	only ordered 500 units for their initial
00:08:14	00:08:19	shipment but she ended up selling all
00:08:16	00:08:21	500 units in a single month and missed
00:08:19	00:08:23	out on the entire holiday shopping
00:08:21	00:08:24	season now whether or not you feel
00:08:23	00:08:26	comfortable placing larger orders is
00:08:24	00:08:28	your prerogative but eventually your
00:08:26	00:08:30	e-commerce business will outgrow your
00:08:28	00:08:32	existing moq and it's in your best
00:08:30	00:08:34	interest to renegotiate in general you
00:08:32	00:08:36	should ask for lower pricing whenever
00:08:34	00:08:38	you meet a new quantity threshold and
00:08:36	00:08:40	this threshold is largely determined by
00:08:38	00:08:42	the type of product that you sell
00:08:40	00:08:43	now if you start out ordering 500 units
00:08:42	00:08:46	and all of a sudden you're placing
00:08:43	00:08:47	orders of a thousand or 2 000 units then
00:08:46	00:08:50	you should definitely try to negotiate
00:08:47	00:08:51	for lower pricing in fact i would argue
00:08:50	00:08:53	that you should make a habit of asking
00:08:51	00:08:55	for lower pricing no matter what after
00:08:53	00:08:56	all if you do not ask you will not
00:08:55	00:08:58	receive now if you have a good
00:08:56	00:08:59	relationship with your vendor they'll be
00:08:58	00:09:01	willing to work with you to find a
00:08:59	00:09:02	mutually beneficial price
00:09:01	00:09:05	now here are some gotchas when
00:09:02	00:09:06	negotiating whenever you negotiate with
00:09:05	00:09:08	a supplier you have to be extremely
00:09:06	00:09:10	careful with quality control some
00:09:08	00:09:12	vendors want your business so badly that
00:09:10	00:09:14	they're willing to negotiate only to end
00:09:12	00:09:16	up compromising on the quality of your
00:09:14	00:09:18	products one time we struck a fantastik
00:09:16	00:09:20	deal with the vendor for a shipment of
00:09:18	00:09:22	hankies only to find they used a much
00:09:20	00:09:24	thinner and lower quality fabric now the
00:09:22	00:09:26	way to combat quality control attrition
00:09:24	00:09:28	is to create a quality control checklist
00:09:26	00:09:30	and use an inspector in china to inspect
00:09:28	00:09:32	the goods before they are shipped a
00:09:30	00:09:34	quality control checklist is a document
00:09:32	00:09:36	that specifies every minute detail about
00:09:34	00:09:38	the product that you're trying to source
00:09:36	00:09:40	for example whenever we purchase linen
00:09:38	00:09:42	napkins we specify the width the exact
00:09:40	00:09:44	measurements the exact color and then we
00:09:42	00:09:46	give this checklist along with a golden
00:09:44	00:09:48	sample of our product to an inspector
00:09:46	00:09:49	that we hire in china
00:09:48	00:09:51	following these two steps will ensure
00:09:49	00:09:53	that your products will arrive with the
00:09:51	00:09:54	quality that you expect
00:09:53	00:09:56	now when it comes to minimum order
00:09:54	00:09:57	quantities it can be frustrating to find
00:09:56	00:10:00	a vendor that meets your pricing and
00:09:57	00:10:01	quantity requirements but rest assured
00:10:00	00:10:04	there is a supplier out there that
00:10:01	00:10:05	caters to the size of your business now
00:10:04	00:10:07	remember running an ecommerce business
00:10:05	00:10:09	is an iterative process and you have to
00:10:07	00:10:11	gradually work your way up to the top
00:10:09	00:10:13	start out small with a low moq supplier
00:10:11	00:10:15	until your business gets some traction
00:10:13	00:10:17	and then reinvest your profits with
00:10:15	00:10:19	factories to get better pricing hope you
00:10:17	00:10:20	enjoyed this video now if you like what
00:10:19	00:10:22	you saw there's actually a lot more
00:10:20	00:10:24	where that came from if you subscribe to
00:10:22	00:10:25	my channel below and if you are
00:10:24	00:10:27	interested in learning how to sell
00:10:25	00:10:29	physical products online then click over
00:10:27	00:10:30	here and take my free six day mini
00:10:29	00:10:32	course where i'll walk you through
00:10:30	00:10:34	everything that you need to know to get
00:10:32	00:10:36	started in e-commerce thanks for
00:10:34	00:10:36	watching