Our Top 5 Tips to Negotiate Lower MOQs with Chinese Factories

Jun 13, 2024 | 0 comments

Here’s how we get the best Chinese factory MOQs (minimum order quantities)

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Wanting low MOQs isn’t just for new sellers. Mature, well capitalized brands also recognize the importance of risk management and product validation. Or in other words, not spending too much up front in case the product flops. 

Our Top 5 Tips

So, here’s 5 tips in asking your supplier to accommodate a smaller test run (Chinese word is: 试单 ). 

1.) Direct Communication 

Don’t hide behind email! Reach out to suppliers via phone or video calls to discuss your needs personally. Building rapport and putting a face to a name can lead to a lot more flexibility in negotiations.

2.) Negotiate pricing 

Offer to pay a slightly higher price per unit in exchange for a lower MOQ. Doing so can offset the factory’s risk and cost of smaller production runs.

3.) Simplify your product 

If your product is extremely complex or has many variations, a factory will be less likely to say yes to a lower MOQ. Speak with your designer, agent, or factory and try to understand the manufacturing process. 

If it’s overly complex, consider simplifying the product for an initial launch before then adding additional features or variations in the future. 

4.) Offer flexible payment terms 

Suggest favorable payment terms such as a higher initial deposit or quicker payment turnaround. This can help suppliers manage their cash flow and be more open to lower MOQs.

5.) Highlight future potential 

Prepare a detailed proposal that includes market analysis and potential order volumes. Showing you are a serious and organized buyer can make suppliers more willing to negotiate.

Ultimately, good factories get a lot of prospective businesses making requests. By understanding the above, you can better position your request to be accepted. 

How does the factory see a smaller MOQ?

They want to balance risk and reward owing to: internal R&D investment, raw material costs and transportation, machining setup, running and maintenance, inventory management, and labour costs. 

Feel free to give these 5 tips a try. They should help to engage in a meaningful factory conversation and hopefully get you closer to your goal of reducing risk on a trial order. 

Have you tried any of these ideas before? What’s something that’s worked well for you? 

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