Abstract: Factories around the globe generally require a minimum order quantity (MOQ) in order to begin the manufacturing process, and China is no exception. These MOQ levels ensure that the factory is be able to recoup the specialized tooling and custom manufacturing costs associated with brand new orders. Below a certain threshold, fulfilling the order is a money-losing proposition.
But that doesn't mean that all Chinese clothing factories require the same minimum quantities. If you do your legwork you can find a low MOQ China clothing manufacturer, or you can negotiate a better deal with a manufacturer willing to work with you.
In this guide, you'll learn how to look for a lowered MOQ clothing manufacturer in China and pick up some negotiation tips that could help you drop your numbers down even further. Remember - nothing ventured, nothing gained. Finding a MOQ quantity you can work with will require significant effort. But the benefits are worth it.
Before we discuss how to find a low MOQ China manufacturer, it’s important to understand why minimum quantities exist. This understanding can provide you with leverage in your negotiations. Especially to newbie buyer, low MOQ China clothing manufacturer is the best Cloting manufacturer in China for you.
Why Do Minimum Order Quantities Exist?
Consider what a factory has to do when it prepares to produce a new clothing order. Before manufacturing can begin, the production line needs to be retooled to satisfy the specifics of the order. Worker training may be required. Specialized equipment may need to be procured if the production run requires something the factory doesn’t already have online.
The factory also has to source raw materials, custom-printed textiles, buttons, hardware and etc.Their suppliers generally have minimum order quantities of their own.
Now imagine if you wanted to order a single custom jacket. All of the factory’s initial startup costs and materials quantities would have to be borne by the price of that one piece of clothing. This is of course unworkable, requiring an absurdly high unit cost that no buyer could afford.
If these costs were amortized out over 100 jackets, the per jacket price could be lowered significantly, but would likely still be too steep for most buyers. In order for the factory to offer a competitive price per unit, they have to set minimum order quantities. Beyond that threshold, the factory’s start-up costs can be amortized economically without adversely affecting unit costs.
These MOQs serve a secondary purpose as well. They help to separate serious buyers from day players. Businesses that can afford a manufacturer’s MOQ are less likely to cancel and more likely to have the resources to pay the bill when it comes due.
In short, MOQs help factories keep their prices competitive and ensure that they can recover their initial manufacturing costs. But you can find a low MOQ China clothing manufacturer if you work at it.
Why MOQs Are Bad For Buyers.
On the one hand, minimum order quantities help keep prices low by amortizing initial start-up costs. However, that’s little consolation to a small business that can only afford to order 500 units for their initial run and are told by manufacturers that they won’t do business for less than 1,000.
MOQs tend to penalize smaller companies that don’t have the resources required to meet these minimums. They’re either prevented from getting their businesses off the ground or they have to over-leverage themselves in order to participate, risking bankruptcy if they can’t sell their initial order.
MOQs are a barrier to commerce, but a necessary one. Factories will set them as high as they can possibly get away with in order to protect their interests, and buyers would prefer they not be there at all. Both sides recognize some minimum is necessary, however. As a buyer, your job is to try and find a low MOQ China clothing manufacturer you can work with.
China’s clothing manufacturing industry is massive, totaling $380 billion dollars annually, and employing roughly 4.6 million people. There are roughly 20,000 firms operating in the industry, ranging from large enterprises to smaller, specialty factories.
The industry enjoys healthy competition, which is good for buyers. While some factories opt for lower prices and high MOQs to protect their interests, other manufacturers look for long term relationships with their customers. These firms are willing to lose money on initial product runs because they make up for it through future orders. These firms are willing to work with smaller buyers that may be turned away by larger companies.
When you first begin your search for a low MOQ China clothing manufacturer, these are the factories you’re looking for. China’s dense market allows for a number of competitive strategies. You’re looking for those that offer lower MOQs as a selling point.
Tips For Negotiating Reduced Minimum Order Quantities.
You’re not powerless when it comes to a firm’s MOQ. In the end, they’d like to win your business, and if you can make them see that it’s in their best interest to make concessions, they likely will. Here are a few things to try. They won’t work with every manufacturer, but there are a lot to choose from.
At any given time a certain percentage of the market will be suffering from a number of issues and would welcome the business. You just have to find them and then make your case. With perseverance and a little luck, you can create your own low MOQ China clothing manufacturer through the power of persuasion.
Demonstrate Your Staying Power.
Manufacturers may be willing to lower their standard MOQs if you can convince them that your first order will likely become something regular.
Demonstrate to them that you’ve done your research and that a market exists for your clothing products. Show them that demand is high for your product category generally and that your unique selling proposition will enable you to quickly capitalize.
If the factory representatives agree that your business is likely to be successful, they’ll be more apt to offer you a lower MOQ, making up for their initial loss on future orders.
Leverage Quality Control to Your Advantage.
If it’s unclear whether your clothing line will be successful you won’t be able to use the promise of future orders to woo a low MOQ China clothing manufacturer. Instead, you can turn the tables on the manufacturer and call into question their business practices.
You can insist that their standard MOQ is too onerous given that you don’t know whether they’ll be able to satisfy the quality standards you’ve set for your products. You might say that you can’t afford to get stuck with 1,000 units of poorly manufactured merchandise.
When trying this angle, make sure you’ve worked out a minimum order amount you can afford. Also, specify the exact quality parameters you’re looking for the manufacturer to meet. Finally, let the manufacturer know that your preferred MOQ will allow you the quantity you need to perfect your product based on user feedback, ensuring the next, larger production run is perfect.
Depending on the manufacturer’s current situation, they may be willing to lower their MOQ in order to win your business.
Offer a Higher Per Unit Price in Exchange For a Lower MOQ.
If factories have some flexibility in their minimums, they may be willing to lower them if you agree to a price bump per unit. This arrangement can be a win for both parties. You get a low MOQ China clothing manufacturer, and they get a new customer.
The buyer benefits if the additional cost is less than what they would have had to pay assuming standard pricing. The manufacturer benefits by winning new business without having to lower the cost of entry as low as they might have had to otherwise.
Just be careful to do your math. If the higher per-unit price multiplied the lowered minimum order ends up the same as your original cost, you haven’t gained anything.
Suggest Paying a Portion of Their Start-Up Costs.
It’s likely that the manufacturer is applying a markup to their initial costs and then amortizing it out across your first order. In exchange for a lower MOQ, you could offer to pay a portion of their true starting costs. This helps them recoup some of their initial investment while costing you less overall and can be good leverage in your effort to find a low MOQ China clothing manufacturer.
Get Quotes From Manufacturers of Every Size.
It might seem reasonable to assume that only large manufacturers will have the operational headroom to offer lower MOQs, but that isn’t necessarily true. They certainly can do this, but oftentimes they don’t need to. They tend to deal with larger buyers that don’t have an issue with their standard MOQ levels.
Sometimes it’s the smaller factories that are more flexible. They recognize that smaller buyers can’t compete when faced with high MOQs, and so they’re more willing to negotiate in order to close the sale.
Smaller firms also tend to suffer from market fluctuations more than larger manufacturers. As a result, they’re more likely to fall on hard times and suspend their normal MOQ standards in an effort to fill their production pipeline.
In general, it’s wise not to pre-judge manufacturers. You never know what’s going on for them, and you never know when the window of opportunity is open. The low MOQ China clothing manufacturer you’re looking for might be your very next phone call.
Plan a Business Trip to China.
Trying to arrange for lower MOQs over the phone and via email can be a difficult, frustrating process. If you’re not having luck it may be worth hitting the pavement and talking to manufacturers in person.
There are wholesale vendors aplenty in China, along with large-scale and organized markets where you can interact with them. In many cases, these markets are the best place to find a wholesaler willing to work with you.
There’s also value in getting to know a vendor in person. It’s easier for the two parties to get a read on each other. You may find it easier to convince a low MOQ China clothing manufacturer to satisfy your request with a face-to-face conversation than over the phone.
If you’re unable to find a low MOQ China clothing manufacturer willing to meet your request, you can try partnering with another company or two, submitting your orders together, thus sharing the minimum.
Trading companies are third parties that help bring these sorts of shared orders together. If you don’t know any other companies in your industry who can help you purchase, a trading company can find like-minded businesses for you.
By sharing the start-up costs with other companies you all get what you’re looking for — a lowered MOQ along with low per-unit pricing.
Finding Lowered MOQs Is Difficult, But It Isn’t Impossible.
Low MOQ China clothing manufacturer vendors are out there. You just have to be diligent and tenacious in order to find them. It’s a numbers game. The more manufacturers you talk to, the more likely it is that you’ll find a firm willing to work with you. Just don’t give up.
You don’t want to put your business in a difficult position where you’re paying more than you can afford to kickstart your clothing line, particularly if it means going into debt. If you find you’re unable to sell the volume of clothing you have manufactured, you could be looking at a default or a slow, painful process of digging out.
Following the preceding advice will put you well on your way to finding a low MOQ China clothing manufacturer, that’s happy to satisfy your request in exchange for a long-standing business relationship.
In the end, future business can be worth significantly more to a manufacturer than current costs. Good customer service initially can lead to returns far in excess of the losses they might suffer in the short term. If you can successfully convince manufacturers of this, you’ll find the vendors you need to get your clothing produced.
