Determining a reasonable Minimum Order Quantity (MOQ) is a crucial business decision for retailers. Excessive inventory can tie up your capital and increase company storage costs, while insufficient inventory can lead to difficulties in fulfilling customer orders. However, finding the right MOQ can help you control costs and meet customer demands. Therefore, as a newcomer, it is essential to consider MOQ as a key factor before engaging in children’s wholesale purchasing.
What Does MOQ Mean?
The Minimum Order Quantity (MOQ) is the lowest number of products a buyer can purchase from a wholesaler at one time. In other words, your order quantity must be a multiple of this number. For example, if you need to order girls’ denim shorts priced at $10 each, and the children’s clothing wholesaler you are dealing with has an MOQ of 50 pieces, this means you need to spend $500 to purchase this batch of goods.
Why Is MOQ Important?
MOQ is significant for retailers. Buying products in bulk allows retailers to purchase each item at the lowest possible price, which is also known as economies of scale. Retailers can sell a girls’ jacket and price it appropriately to make a profit, but for wholesalers, selling one product at a time could result in a loss. This is why wholesalers sell products in bulk to retailers through a minimum order quantity, and then retailers sell individual products to consumers.
Moreover, the larger the order quantity, the lower the logistics and transportation costs. This is also an important way for retailers to reduce operational costs.
Therefore, this also tests the stability and responsiveness of the supplier. During the retail sales process, if the supplier can replenish stock quickly, a lower MOQ can be adopted to reduce the risk of inventory backlog. If you are considering a lower MOQ, you can consult https://lezonkids.com/, a supplier with 14 years of OEM/ODM experience in children’s clothing. You can obtain the minimum order quantity by consulting with their professional customer service.
What Preparations Should Be Made Before Determining MOQ?
1. Market Demand Analysis
Understanding and analyzing the purchasing factors of target customers can make your children’s clothing business more efficient. Whether you are selling online or offline, you can analyze customer orders to understand their purchasing habits and preferences. You can also conduct effective surveys by releasing targeted questionnaires.
In addition, consider seasonal factors. Customers’ demand for children’s clothing varies significantly with different seasons. If it is a seasonal change, the MOQ for the previous season should be set lower, and the MOQ for the next season can be planned reasonably based on past experience.
However, if there is still excess inventory, do not be anxious. You can quickly clear the inventory through seasonal clearance sales.
2. Negotiate with Children’s Clothing Suppliers
Communicate with suppliers to see if it is possible to adjust the MOQ or provide more favorable terms under specific conditions. A good children’s clothing supplier is likely to become your best partner in the children’s clothing business, growing and facing challenges together. Therefore, communicate more with children’s clothing suppliers (insert a button here to link to home/customer service) until you find a rapport between you.
Request Samples from Children’s Clothing Wholesalers
Most of the time, looking at pictures on a website alone cannot ensure that the product has no color difference or how the fabric feels. Therefore, the best way to determine whether the product is as good as the supplier describes is to obtain and inspect it personally. So, you can communicate with your cooperating wholesalers to request samples of the products you intend to retail. This will be of great help in negotiating the order quantity with the supplier.
Potential Storage Issues
Inventory management may not be a concern in the early stages of your business, as you might only need a small space to store the goods you have wholesaled. However, storage management is an expense that must be considered, and it is too late to think about it after the company has expanded.
Moreover, in your children’s clothing retail business, inventory management may be an underestimated expense. Inventory products can easily erode your indirect costs. Let’s get back to today’s topic and consider storage management in conjunction with the minimum order quantity. You will find that if your children’s clothing wholesaler’s order quantity is too high, you will not be able to sell these products quickly, and thus you will not be able to offset the storage costs.
When you decide to enter the children’s clothing industry, it means that there will be many problems and challenges waiting for you. The Minimum Order Quantity (MOQ) is one of the problems you must solve.
However, despite this, there is no need to be overly anxious. As a children’s clothing retailer, you can still make good use of MOQ in many ways. By focusing on MOQ, you can more scientifically determine a reasonable minimum order quantity that meets market demand while controlling costs and risks, thereby reducing the risks associated with wholesaling children’s clothing.
