Private Label Process 3: How to Negotiate With Suppliers

Is MOQ negotiable? The short answer is yes, absolutely.

Your goal when working with a new supplier is to suss out everything about them. From communication to competency to product quality. And the best way to test product quality is to order as small a quantity as possible. The smaller the quantity, the smaller the risk you expose yourself to.

If the product you are interested in is something you haven’t sold before, then you are also testing the potential of the product in the marketplace in addition to the quality of the supplier. This is the second reason you want to keep the MOQ as low as possible.

Even within the same product type, you will see the MOQ vary widely. And in my experience, this MOQ is a starting point and definitely negotiable. Try to negotiate down to what you are comfortable with, and don’t be afraid to move on to another supplier if they are not budging. While your goal is to lower the quantity, the supplier’s goal is to squeeze as much quantity out of you as possible and make as much money as possible on the sale. 

It’s important to help Chinese suppliers realize that by accepting a lower quantity for the initial test order now, it will increase their chance of developing a long lasting mutually beneficial relationship in the future. Stress the fact that by providing quality products that meet expectations, they will develop bigger orders next time that will hopefully last for years.

But at the same time, keep in mind that suppliers have high overhead costs and do in fact have a floor quantity. Try to keep the quantity reasonable where you don’t expose yourself too much in case the product quality is poor or doesn’t sell, but at the same time high enough so the supplier also makes some money as well. 

It depends on the product, but for us, we aim usually for an initial order quantity of around 200-500 units. We show the supplier the other products we sell, our website, and our expected order size and frequency in the future (assuming all goes well). The idea is to show them we are established and will likely to continue to order if all goes well.

For highly customized products such as CNC’ed aluminum where tight tolerances are critical, we dropped the order quantity down to 20 units. Again, the idea is to assume the worst (poor quality, poor tolerances, etc) and after the supplier proves themselves, then increasing to 1000-2000 unit orders. 

Hope this helps and good luck out there!