Why small manufacturing orders increase costs

The right order quantity can often drive your costs down and the quality up. Understand Minimum Order Quantity (MOQ) and the importance of smart manufacturing. Tips from top rated China Sourcing Agent for manufacturing and production.

Vaughn Cook RockWell Window Wells
Jeff Crawshaw
February 24, 2019
MOQ - Minimum Order Quantity Explained - Sourcing Allies

The right order quantity can often drive your costs down and the quality up. This is because larger orders tend to give you more influence and control at a factory level. Factories are rarely totally independent and often rely on other people and services in the supply chain that often influence the focus of a factory. So smaller quantities can almost never really give you the necessary attention to both reduce costs as well as improve quality.

Minimum Order Quantity or MOQ

Take for example a forged brass door lock. The handle may be forged brass so a 5000 piece MOQ is acceptable. But the locks also contain among other things, a small spring. The spring manufacturer makes these with a MOQ of 50,000 pieces due to their small size and he in turn has to adhere to his raw material suppliers MOQ and so on. So in this instance if you want to buy just 200 spare springs you might have problems. If however these are off the shelf springs then you may be ok, but if you want a brand new design then you would be up against this 50,000 pieces MOQ.

If you interested in knowing more about Sourcing from China and other low cost countries, feel free to send me a query below.

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