A supplier offers you 300 units at $6 each. Another offers 120 at $7.50. The first quote saves $1.50 per unit at the supplier’s price, but it also asks you to buy 180 more units. Can your business sell those units quickly enough to justify the extra cash?
To decide whether a supplier’s minimum order quantity works for you, compare what you’ll pay, when you’ll pay it, and how long the stock is likely to last. Run the numbers at your expected sales pace and at a slower pace you could realistically face.
A supplier’s minimum order quantity (MOQ) is the smallest quantity it will accept. A pack size is the increment in which you can order. If the MOQ is 100 and the supplier sells only in cases of 24, the smallest valid order is 120 units. A minimum may also apply to an individual product variant. Stockie Help Center
1. Confirm what the minimum applies to
Ask the supplier to confirm the minimum per order, product, colour, or size, along with any minimum order value. Find out whether the first order and subsequent orders have different terms.
Suppose you want three colours and the supplier requires 100 units per colour. Your minimum for that assortment is 300 units. If the supplier accepts 100 units across colours, you can assign more units to the colours that usually sell faster.
2. Estimate how long the stock will last
Use sales from periods when the product was available. Account for seasonal peaks, promotions, and one-off orders. For a new product, use sales from a comparable item as a starting estimate and test a slower scenario.
Months of stock at arrival = (Expected stock on hand when the delivery arrives + New order units) ÷ Expected monthly sales
If you expect 30 units to remain when a shipment of 120 arrives and normally sell 60 per month, you’ll have roughly 2.5 months of stock. At 30 sales per month, those same 150 units would cover five months. If slower sales also leave you with more stock before delivery, recalculate your arrival balance for that scenario.
Set a coverage limit that reflects your storage capacity, selling season, and confidence in demand. Use each variant’s sales rate when minimums apply separately. A popular colour can make the overall product look healthy while a less popular colour sits on the shelf.
3. Compare landed cost and cash due
Get both quotes to the same delivery point. Include freight, insurance, duties, taxes, and handling where applicable. Check which charges the quote already covers so you count each cost once. trade.gov
Landed cost per unit = Total landed cost ÷ Units ordered
Ask when the deposit, balance, and delivery charges are due. Compare those amounts with the cash available on each due date after allowing for operating expenses. If you pay a recoverable tax upfront, show it separately in your cash plan.
Worked example with two suppliers
Assume identical product quality, zero stock on hand at delivery, and all charges paid by receipt. The figures are hypothetical.
| Measure | Supplier A | Supplier B |
|---|---|---|
| Minimum order | 300 units | 120 units |
| Supplier price per unit | $6.00 | $7.50 |
| Goods cost | $1,800 | $900 |
| Additional costs to reach your store | $360 | $180 |
| Total cash due by receipt | $2,160 | $1,080 |
| Landed cost per unit | $7.20 | $9.00 |
| Stock cover at 60 sales per month | 5 months | 2 months |
| Stock cover at 30 sales per month | 10 months | 4 months |
With a $1,500 purchasing budget and a four-month stock limit, Supplier B fits both sales scenarios. Supplier A costs $1.80 less per unit landed but requires an extra $1,080 by receipt and exceeds the coverage limit at either sales rate.
Before choosing Supplier B, check its reorder lead time. If replenishment takes two months and you expect the first shipment to last two months, you may need to place the next order as soon as the first one arrives to avoid a stockout. Check whether you can fund that order while the first batch is still selling.
4. Negotiate the part that causes the problem
| If the issue is… | Ask about… |
|---|---|
| Uncertain demand | A smaller trial order, even at a higher unit price |
| Minimum per colour | A mixed assortment with more units in proven colours |
| Storage space | Staggered deliveries with written release dates and fees |
| Upfront cash | A different deposit and balance schedule |
| Custom production requirements | A standard product or plain packaging |
Staggered deliveries can ease storage pressure while leaving the full purchase commitment in place. Confirm when you pay and what happens to stock the supplier holds. Get revised terms in writing before comparing them.
Frequently asked questions
Is MOQ the same as a reorder point?
MOQ tells you the smallest order the supplier accepts. The reorder point tells you when to place an order based on demand, replenishment time, and any safety stock you hold.
Is a lower unit price worth a larger MOQ?
Compare the landed price difference with the extra cash, storage, and potential markdowns. A larger order is easier to justify when demand is established and the batch will sell within your planning window.
What if I have no sales history?
Start with a smaller trial order where possible. If you must commit to a larger batch, test several sales scenarios and decide how you would handle the stock if demand falls short.
Can a supplier let me combine different products?
Some suppliers offer mixed orders. Ask which products count toward the minimum and whether any separate variant, case, or order-value rules still apply.
What should I check before accepting a revised MOQ?
Confirm the exact quantities, pack sizes, total delivered price, payment dates, and lead time. Recalculate stock cover and cash due using the revised quote.
Conclusion
Accept a minimum order when you can fund it on the supplier’s payment schedule and sell through it within a realistic window. If it fails either test, negotiate the term causing the problem or compare another offer using the same delivery point and cost assumptions.
