Hello everyone, welcome to Morefar Global Sourcing, do you know how to negotiate a low MOQ with expert help from a China sourcing company. Especially with Alibaba suppliers, they are the biggest challenge. Many Amazon sellers face meeting the Chinese supplier requirement for a minimum order quantity (MOQ) because there are so many people having an issue with MOQ in sourcing their product in China.
So how we can convince the supplier to change their MOQ to our desired quantity. we gonna share with you some awesome tips,
Firstly, let’s answer 2 questions,
Question 1, is the MOQ quantity rail is real and wrong, some of the MOQ quantity is completely made up. It is a subjective number, your supplier asked you to follow them in your place the first purchase order. Some of MOQ is real, because in order for the factory to produce the product, not only they have to buy a minimum quantity of raw material, but they also need to set the machine up. Sometimes the set-up time is very long and it’s very expensive. So you are customizing a product, they have to buy a unique component, just to run your order. Therefore, they need you to buy a minimum order quantity.
Assume your supplier MOQ is real, question 2 is why you are the buyer and you wanted to buy a quantity less than your supplier MOQ, your primary reason to buy a smaller quantity should be using a smaller quantity to validate the supplier’s production quantity. If your reason is that I am not sure if the product is going to sell or I don’t have a lot of money night now, well there is valid reason. But if you are not sure if this product is going to sell, please go back and continue to validate the market research and make sure that you feel confident to move forward and you don’t have a lot of money which understands. But keep in mind after this small quantity by you are going to need more money in order to continue to buy more. So regardless of your reason, please don’t ever and never to use this reason, I am not sure if the product is going to sell or I don’t have a lot of money, don’t let your supplier see your weakness. Always negotiate from a position of strength and confidence. Now you are confident going into the negotiation.
When to negotiate, the answer is when you got quotes, you got five supplier quotes, they all have a different price and different MOQ. It is so tempting to start negotiation, but wait please don’t waste time, because you don’t know if their sample is going work out yet. But in this process, now you can plant a seed, you can say something like this, just for you know our first purchase order quantity may be lower or higher than your MOQ, it is depending on your product sample quality. after you get the sample, you are evaluating the sample and you are serious about getting into the customization stage and designing the product, customizing the logo, different variations, and different colors, maybe customize the package. Now you can put your cards on the table and start to negotiate. Instead of continuing talking, let us show you some scenarios and show you some negotiation techniques.
Let’s say your supplier MOQ is 500, and your desired buying is 150. Let’s go into the negotiation with the supplier.
Going to be found,
Negotiation round 1:
Remember I said previously if your reason is that I am not sure if the product is going to sell or I don’t have a lot of money to start. Don’t use those reasons. If you’re customizing your product, you can say something like this, improvements and customizations were making us critical, we will get the first production run done. For the first order, we have a decision to order 150 pieces to validate your company’s production quality, now give her some specify reasons,
Number 1, we need to make sure some key specs are done right, what are the key specs you should know if you’re customizing your product if you don’t know to go on to Amazon to find an item. That is close to what you are going to, what you are going to make, and read the negative reviews that should give you some warning signs, some warning signs for your product. Then use those as key specs for your supplier to validate.
Number 2, we need to test the packaging whether durability, to make sure the design is sufficient to sustain the potential shipping damage, we need to test those.
Number 3, the small order will also help us gather market feedback, so the next large is going to do perfectly.
Those are valid reasons, and those are very fair reasons if your supplier agrees by now, that is good for you, but if your get the answer like this, sorry we cannot make 150, we will lose money.
Now you will go into negotiation round 2
They said they are going to lose money what about you, you understand that, understand we certainly don’t want you to lose money especially for the round 1, that is true because they are your business partner, if they lost money, they can not support to you, and specifically not only they lose money, actually lose more money, you are in this together. So you can see something like this, to order small quantity, because our company will lose a lot of more money because we are going to pay a lot more on shipping as you know, the air freight is going to cost us XXX dollar, that is why we only want to do this one time, just to make sure everything is done right. So, you basically put yourself on an equal footing with them. They said they will lose money by running your smaller quantity and you tell them, not only they lose money, you lose more money, and you are in this together as a partner, so if your supplier understands, they may give you a smaller MOQ right now, but if they continue to say something like this, I understand, but my boss said we cannot produce at 150, oh now she is poling her boss cart, you have to go into negotiation round 3.
Round 3, so if you’re going into the negotiation round 3. You can start by being a little bit more playful because even though the negotiation is very serious, you can still build rapport with the representative from your supplier set, because start by saying something like this, your boss still says no, should I talk to your boss directly, smelly face and now you can show her your credibility of selling the product, you can say something like this, we have successfully sold much product, your company seems to be like the most difficult to work with on MOQ, we are a serious buyer for any new product launch, we have to spend a lot of marketing dollars to promote it. For example, half of your 150 units will be given away free. Now notice this, I said that half of your 150 units. I am not saying my 150 units or our 150 units, and this is like making a commitment for her, and secondly, we will spend some money on local photography and packaging, and the third after receiving your first 150 units, we are going to have to spend a lot of more money on advertisement. Now you begin to be a little bit more place playful again. We plan to sell a lot of your products; you are going to make a lot of money for your boss. So, this is the key point. Before this supplier walks away to say something like this, okay I will talk to my boss one more time, she is walking away. Where she is walking away, you got to put your foot down by saying something like this, thank you I hope you don’t lose your business, because of your MOQ. Right now, we are comparing 2 suppliers, your company is one of them, we would love to work with you, but we need to let me know by tomorrow if 150 pcs order is okay, if not we won’t waste more time on this. Basically, this is what you are showing, you are giving her deadline, you are signaling her your willingness to walk away, this is quite powerful. Guys if you show this 80% of the time, your supplier should be able to give you their compromise to your lower quantity. In this case, it’s 150 pieces instead of a thousand. However, if you are really facing a challenge, you get this in round 4.
Round 4, your supplier is saying like this, sorry, my boss still say no, because now you have to really listen carefully to them because. Because that is there to know, their true reason, the reason they cannot work with you to lower their MOQ, if you listen carefully, you will be able to score on the final round, let’s go into the final round.
Final round, I am gonna share with you five negotiation tips to really tell a home,
1st，you can ask how much raw material they need to buy, (you can source the raw material by yourself, so you can know how much raw materials will be needed for each piece. that you can use this for negotiating the better MOQ.
2nd, if there because is there setup fee, for example they said our setup fee is very high, how much? 200? 150? how about I share a little bit with you? Be flexible working with them understand they do have a setup fee. Therefore, you are willing to share with them, because you are a partner with them.
3rd, because they have to buy a minimum quantity if a unique component for your customized product, if that is to ask them, can you buy the smaller quantity for the unique component and pay a little bit more, if you can, so I don’t have to buy the minimum quantity for the entire product, so ask them.
4th， if they really cannot lower the MOQ, they said they will lose money, how about offering a slightly high slight higher price, for example, if their MOQ price for 500 pcs is 5 dollars, you can offer maybe I will pay you five-thirty for 150 quantity or more.
5th, instead of buying 150, how about I offered to buy 300 pcs, still less than you thousand, but I am trying to compromise and make it work.
6th, you can draft a purchase order and send it over to them and show your commitment, and show that you are serious of working with them, if they still say no, you know they can’t, but most likely by now, you should be able to score.
Alright, after you try all these negotiation techniques. I am pretty sure you are getting a good chance of getting what you want from a little help from China sourcing company, even if you make a little bit of compromise during the negotiation. Now you know a lot about your suppliers cost structure, their decision-maker, and also their negotiation style, and most important is that they know that you are a serious buyer, you are professional buyer, they cannot run you over, and take advantage of you, I hope this can help you.