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So you’re ready to grow your brand or introduce a new lingerie line but one of the biggest hurdles can be Minimum Order Quantities (MOQs) – especially if you’re not ready to make a big investment. If you can’t meet those MOQs, it might feel like your plans are in jeopardy. But why are MOQs set so high and what do you do if you can’t meet them? Understanding why MOQs exist and thinking through your options can turn a potential roadblock into an asset for your business. Today we’re talking about why MOQs exist, and how you can actually work with your vendors to meet their MOQs in a way that makes sense for you.
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Understanding MOQs: What Are They and Why Do They Matter?
What are MOQs? MOQ stands for “Minimum Order Quantity.” It is the smallest number of a product that a manufacturer is willing to produce in a single order. Lingerie manufacturers have MOQs in place to make sure it’s cost-effective and efficient for them to run production. They can’t produce a few of one thing and a few of another for all the buyers that they have, it’s too hard to manage. They have to produce production runs that are worthwhile for them.
Why do MOQs matter? MOQs matter because they protect both the manufacturer and the buyer. For manufacturers, MOQs help to cover the costs of raw materials, labor, and overhead for production. The manufacturer wants to make sure they produce enough quantity both to make up the costs and also to make money. For buyers, meeting the MOQ can often mean better pricing, access to more customization options, and a more reliable production schedule. If you fall short of the MOQ, it can cost more money, production could be delayed or worse, the manufacturer may not want to produce your line at all. Clearly, the MOQ is something that you must consider in order to move forward with your business.
Typical MOQ Requirements in the Lingerie Industry
For lingerie manufacturers, the MOQs vary based on the complexity of the design, the materials used, and the customization. At Xiesheng, the factory that manufactures all of my pieces, the MOQ is typically between 2,000 to 3,000 pieces per color. That’s quite a few pieces of lingerie you’ve got to sell to cover that order. The reason that MOQ exists is to make sure that the factory stays efficient and the quality of your product remains good. MOQs also make sense for the buyer because they’re typically going to get better pricing when they meet the MOQ, customization options improve, and the production schedule becomes more reliable. If you’re manufacturing your own line, knowing what the MOQs are for different products can help you better prepare for the actual costs associated with manufacturing.
What If You Can’t Meet the MOQ? Exploring Your Options
Not every business can meet these large MOQs, especially smaller brands or those testing out new designs. However, there are several strategies you can consider:
a. Negotiation: Sometimes, manufacturers are willing to negotiate MOQs, especially if you have a long-term partnership in mind. Offering to pay a higher price per unit or agreeing to a longer lead time can sometimes convince a manufacturer to lower their MOQ.
b. Group Buying: Collaborating with other brands or businesses to place a joint order can help you meet the required MOQ. This approach allows smaller companies to enjoy the benefits of large-scale production without the need for massive capital outlay.
c. Small Batch Production: Some manufacturers, including Xiesheng, might offer small batch production services for new customers or special projects. This usually comes at a higher cost per unit but allows you to test the market without committing to a large order.
d. Stock and Custom Orders: Mixing stock items with custom orders can help you reach the MOQ. You can order a standard product that the manufacturer already produces and combine it with a smaller custom run.
Case Study: Successful Negotiation of MOQs
Consider the case of a small European lingerie brand looking to expand its product line with a new style. Initially, the brand couldn’t meet the standard MOQ of 2,500 pieces. However, by negotiating a higher price per unit and committing to a longer-term partnership with Xiesheng, they were able to secure a smaller initial order of 1,500 pieces. This flexibility allowed the brand to test the market without overextending financially.
The Benefits of Meeting MOQs: Why It’s Worth It
While meeting a high MOQ can seem daunting, there are several benefits:
a. Cost Efficiency: Larger orders typically result in a lower cost per unit, making your pricing more competitive.
b. Quality Assurance: With larger orders, manufacturers can streamline production processes, often leading to higher consistency and quality across the batch.
c. Better Customization Options: Higher MOQs often come with more customization opportunities, allowing you to tailor the product more closely to your brand’s needs.
d. Stronger Relationships: Meeting the MOQ can strengthen your relationship with the manufacturer, potentially leading to better terms and more flexibility in future negotiations.
Conclusion: Strategic Planning for Your Next Order
When faced with a high MOQ, the key is not to panic but to plan strategically. Whether you negotiate, collaborate, or adjust your order strategy, there are ways to work within the constraints of MOQs. Understanding the benefits and exploring your options can help you turn this potential obstacle into an opportunity for growth.
At Xiesheng, we’re committed to helping our clients navigate these challenges and find solutions that work for their business. Whether you’re placing your first order or your fiftieth, our team is here to support you every step of the way.
