Minimum order quantity (MOQ) is the lowest number of units a wholesale supplier allows buyers to purchase at one time. This concept is also often referred to as “minimum order policy.”
Suppliers put this restriction in place so that they are not wasting time and resources on orders that would deliver very little profit. This concept is very straightforward and is used by wholesalers around the globe.
To put this concept into perspective, let’s paint a picture of a clothing retailer, TeeWorld, placing an order of t-shirts from SupplierWorld.
TeeWorld wants to get a new t-shirt style in stock to expand its seasonal collection. They aren’t exactly sure how the collection will go over since they’ve never sold it before. They turn to SupplierWorld, their trusted wholesale distributor, to see the smallest order they can place.
SupplierWorld lets them know that there is a MOQ of 200 shirts. This means that unless they can negotiate a different deal with SupplierWorld, TeeWorld must buy a minimum of 200 shirts per order.
Some wholesale distributors will allow buyers to buy a small quantity sample of this product to make sure it is what they are looking for, but they will likely have to pay the retail price rather than the wholesale price.