When it comes to placing the first purchase order with the Chiness suppliers, especially the Alibaba suppliers, the biggest challenge that many small businessmen are facing is to meet the Chinese suppliers requirement for a Minimum Order Quantity (MOQ). In this article, I will give you some tips to convince the suppliers to change their MOQ to your desired quantity.
Why There Is A MOQ?
MOQ is the minimum order quantity that your supplier is willing to produce the product for you. And the MOQ denpends on the production cost of the factory, because when the factory produces the product, not only does your supplier have to buy a minimum quantity of q raw materials, but the supplier also needs to set the machine up. Sometimes, the set-up time is very long and expensive. In addition, if you are customizing a product, the supplier may have to buy an unique component for your order. Hence, MOQ exists.
7 Tips for Negotiation
Small buyers may want a lower MOQ for the reasons like validate the supplier’s production quality, don’t have enough money, not sure if the product is going to sell well in the market and etc. But keep in mind, no matter what your reasons are, never use these reasons to negotiate with your suppliers. Don’t let your suppliers sense your weakness, always negotiate from a position of strength and confidence. Then how to negotiate with the Chinese suppliers? Following are some useful tips for you.
1. Show Your Strength
You need to show your strength, your power to make the supplier feel excited to cooperate with you. You can paint a picture of which markets you supply, which countries and your annual volumes. You need to let your suppliers believe that your company is a powerful one and your company is going to be successful over the long-term. Actually, Chinese suppliers are not thinking about how much money they can make from this order, they are more interested in how much money they can make from this customer. If you can make them think you are a promising long-term partner, they are willing to give you a lower MOQ for the first order.
2. Order At the Right Time
Like other industries, manufacturers have high and low seasons. If your order quantity is lower than your supplier’s MOQ, and the product has no obvious seasonal characteristics, then it is recommended that you can place an order in the supplier’s off-season, that is, to avoid some important holidays. Then your supplier will not ignore your order and will be more likely to give you a lower MOQ.
3. Select Smaller Manufacturers
In general, smaller manufacturers are more flexible and adaptable to meet your needs, while the big manufacturers always have very strict systems and processes. Thus, a smaller one will be willing to offer a low MOQ than a big one.
4. Place A Trial Order
You can ask the suppliers for a low MOQ by saying this is just a trial order to make sure that the process and the systems are smooth. And if this order can be finished smoothly, then there is a bigger order, and you can send them some screenshots of your sales to prove. If they think you are a serious buyer, they will be willing to give you a low MOQ even if it is a loss for them for the first order because that’s a cost of gaining your business.
5. Ask the Suppliers What Products Are Holding in Stock
Suppliers also get canceled orders from other customers or some over order products left in stock. If you want a low MOQ and they already have those in stock. If you can find a similar one, then you can consider ordering from the factory’s excess stock. And your suppliers are happy to give you a low MOQ at a lower price.
6. Consider Paying for A Slight Higher Unit Price
If your product needs customization, suppliers generally won’t accept small orders, because if they want to make customized products, they may need to buy special parts. You can negotiate with your supplier for an acceptable higher unit price with a lower MOQ. Some buyers may feel it’s stupid to do so, but paying a higher upfront costs can allow buyers to save on shipping, storage and other costs in the future.
7. Put Some Pressure On Your Suppliers
You should let the supplier know that you currently have other suppliers to consider, they are not the only option, put some pressure on the supplier. If they can’t give you a low MOQ, then you have to walk away from the deal. And give your supplier 2-3 days to consider it.
Everything is negotiable . If you’re not satisfied with your supplier’s MOQ, just use the tips mentioned above for a lower MOQ. If you need any help in importing from China, please contact us for help.