What Is MOQ in Procurement? Meaning, Challenges & Tips

You see something you like and feel ready to purchase it. 

The next step should be obvious: carry out the payment. 

But a message pops up on the site: You haven't reached the minimum order quantity.

Annoying?

Yes, but for some businesses, more precisely suppliers, it can be a common practice.  

Whether it's a method to segment their customers or a logical move in highly specific markets, your company needs to be prepared for it.

This article shares the best practices to do so.

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What's MOQ? 

Minimum order quantity, or MOQ, 's literally the lowest amount of units or dollar value a supplier is willing to sell in a single order. If your company is interested in working with them, you need to meet this threshold. 

Some suppliers, depending on their internal policies, might agree to change their MOQ as long as there's an increase in the final price.

Usually, you'll find two main categories of MOQ

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• Units-based MOQ: “We only sell this item in lots of 1,000.”
• Value-based MOQ: “Your total order must be at least $3,000.”

If you were planning to make some more flexible purchasing, finding out about the minimum order quantity can be a bit frustrating 

Why would suppliers pretend to force you to buy on their terms?

Well, if you see it from their perspective it makes sense. Setting MOQs helps them to cover setup costs and aligns production with cash flow.

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Why Suppliers Set MOQs 

Manufacturing and setup costs

Just like your company has to deal with costs to keep production levels running. Suppliers have to do the same. Setting up machines, prepping materials, and training staff. If you only order 50 units, they lose money. A higher MOQ spreads those costs over more units. You can't deny it has a point, right?

Economies of scale

The markets are crazy right now, raw materials, packaging, and logistics all get cheaper when purchased in volume. Suppliers want orders that justify buying bigger batches so it's simpler to find better rates for themselves.

Inventory and storage limitations

Have you ever looked around your warehouse and thought: Wow this is pretty simple to manage? Not really.

Holding stock ties up cash and warehouse space. If suppliers produce small custom batches for every buyer, inventory becomes a nightmare.

Demand planning from the supplier's side

Because suppliers also need to make conscious-based plans regarding their production operations.

Bigger, consistent orders help suppliers plan and allocate resources. In that context, MOQ gives them more predictability, especially for made-to-order items, in highly challenging industries like robotics or aerospace.

Challenges MOQs Create for Buyers 

Okay, so sufficient empathy, even when you can understand why MOQs exist, that doesn't mean it's great news for your business. 

Or your budget…

Budget constraints

This is probably the main problem companies have regarding MOQs. 

Money 

You may not have the cash or approval to buy 5,000 units up front, especially if the product isn’t validated internally yet or you are relatively new to the market 

Warehousing and inventory risk

Warehouse management is already messy stuff. Why the heck would you order dozens or hundreds of items you don't need?  Large MOQs mean large orders, and that’s a risky gamble. If demand drops or the product underperforms, you’re stuck with stock you can’t move, and money is wasted. 

Not an ideal scenario.

Cash flow concerns

Not to make everything about money but really…

Committing to big orders upfront means allocating financial capital that could be used elsewhere in your business.

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Supplier lock-in or limited options

It’s harder to switch suppliers or tweak specs without wasting inventory or starting from scratch. So if you're considering broadening your supplier base, MOQs can be a serious obstacle.

How to Manage and Negotiate MOQs 

Consolidate your orders  across SKUs

Suppliers want volume, yes but that doesn’t mean it has to be all of one product.

Because who has that budget?

Try grouping multiple SKUs into a single order.

For example, let's say that if you're ordering 200 units of three related items, that's 600 total. It’s easier for them to justify the run, and you get more variety without breaking MOQ.

Complete win-win 

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Commit to longer-term contracts

Volume doesn’t have to mean all at once. If you can commit to recurring orders over time, many suppliers will reduce the MOQ upfront. Just make it clear you're not a one-off customer—they're more likely to meet you halfway.

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Faster payment terms

Cash talks. Offering early payment or reduced net terms (like Net 15 instead of Net 45) can make your order more appealing. For suppliers managing tight cash flow, this can be more valuable than a large order.

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Bring in sales and ops people 

Sometimes, the procurement team alone can’t justify the quantity. But if you bring sales or operations into the conversation, you might uncover future needs or bundling opportunities that strengthen your case internally and externally.

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 Sample or trial runs

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If it’s a first-time order or you're testing a new supplier, request a trial batch. Some suppliers will offer a one-time exception or a paid sample run, especially if you show growth potential.

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What Can I Do If I’m a Small Company and Can’t Meet MOQs?

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If you’re running lean or just starting out, hitting high MOQs can feel impossible. But you’re not out of options. 

One workaround is going through wholesalers or local distributors, this is a great option because they often split large volumes across multiple customers, so you can buy in smaller batches without dealing directly with the supplier’s full MOQ. Another route is joining a buyer group or co-op, especially if you’re in a niche industry or just starting developing your products. Joining  purchasing forces with similar businesses can unlock better terms and make your order more attractive to suppliers.

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You can also rethink your model. If you're in e-commerce or retail, on-demand or drop-shipping setups can help you avoid holding inventory altogether. 

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You're basically paying a premium to stay flexible, but it’s a fair trade-off from the very beginning. And don’t forget about local sourcing, smaller, regional suppliers may have lower MOQs and be more open to negotiation since they’re not dealing with the same scale or overhead as big manufacturers.

As a bonus?

Everyone loves buying from companies that work with local suppliers. 

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