Definition of MOQ
What is MOQ? It’s an acronym. MOQ stands for “minimum order quantity”. It means the minimum amount of items a manufacturer will accept for a production order. For example, if a clothing manufacturer offers an MOQ of 50 pieces per style, then you need to order at least 50 pieces of a particular style to satisfy their MOQ requirements for a single production run. Nearly all suppliers set an MOQ of some kind. But the quantities will vary widely based on what type of factory they are, what they’re making and where they are located. Each manufacturer will define MOQ differently. Some will base their MOQ on particular styles or colors. Others may be either more strict or more loose in their definition of MOQ.
What impact does MOQ have on pricing?
MOQ relates to quantity and quantity usually relates to pricing. So how big an impact does MOQ usually have on pricing? It has a VERY big impact on price. In general, high quantities are available at a lower price per unit. Low quantities are available at a higher cost per unit. The difference can be huge. If a fashion label is looking for a low MOQ manufacturer, then they shouldn’t expect to receive high volume pricing.
What do apparel manufacturers have such high MOQs?
Simple. Apparel manufacturers have high MOQs for efficiency. The initial communication and setup of a new garment manufacturing order is substantial. There’s all the back and forth discussion about pricing. Figuring out which fabrics will be used and whether they are available. Sourcing zippers, buttons, snaps, rivets, etc. And all the internal details such as scheduling the job, the staffing and all the various overhead that goes into the job. In addition to the garment production itself, there’s also the possibility that the designer still needs to work through all the prototyping and sampling processes. That alone can take a tremendous amount of time. There are two approaches that new fashion labels typically try when they’re just starting up a new fashion label:
The Big Garment Factory Approach
An apparel manufacturer requires a high enough MOQ to be able to cover their overhead and profit through the garment production itself. They will not typically have budgeted for a great deal of product development work. That helps keep their prices down. However, keep in mind that there are a LOT of positions within the company aside from the sewing factory staff. Here are just a few that have to be considered by the business owners:
Common Factory Expenses
- Human Resources
- Sales & Marketing
- Quality Control
- Delivery & Warehouse
- Supervisors & Floor Managers
Wow, lots of people to consider! Not to mention the electric power, water, supplies, internet, drinking water, and all the other various fixed overhead costs.
Every expense of the company, plus profit, must be covered by the garment manufacturing prices.
Big Factory = Poor Fit for Startups
With such heavy competition and tiny margins in the apparel factory business, then you can easily imagine that it could take quite a few pieces at a significant markup to be able to cover the costs of operating the whole company. Many start-up fashion designers don’t make that connection at first. They’ll often come in asking for both the minimum size order and the best price. Not only that, but they’ll also expect the apparel manufacturer to produce prototypes and samples either free of charge or very cheaply.
If you add the cost of all the staffing and the overhead, plus add the cost of developing and sampling the product, the costs add up quickly. It would require a huge order volume to cover the costs of all these services. A high MOQ, then, is a simple way of filtering out the smaller clients who may need more services than they are able to pay for. This also explains why many designers and smaller labels feel ignored by these larger factories. It seems like poor customer service, but in reality there’s a very real possibility that they may just be trying to scare you off. For most smaller clients, this factory approach to developing a new fashion line is just not going to be feasible.
To solicit a realistic bid from a manufacturer, the product development process should be complete. A fashion label should be ready to meet the MOQ and able to move forward with an order when soliciting a quote from an apparel manufacturer. If you’re not ready, then you may end up burning a bridge you might later wish you hadn’t. The second approach is much more likely to succeed…
The Fashion Development Agency Approach
The best approach to developing a new fashion line is through a fashion product development company. While not strictly an “apparel manufacturer”, a product development company will help move you through the initial steps to prepare your fashion line for manufacturing. They may be able to assist with either small scale garment manufacturing. Or they may at least help with sourcing apparel manufacturers who accept small MOQs. What’s an MOQ typically for a product development agency? That depends too, but typically you’ll find MOQs to be far smaller than going straight to a factory.
The Product Development Difference
Why the smaller MOQ? Because the development process is separate from manufacturing. The development costs are paid separately. Which eliminates the need for a high MOQ. A fashion product development company will charge for all the time and materials involved in designing and prototyping the clothing products. The costs of prototyping and sampling fashion designs will vary widely, depending on who and where you have it done. There’s no standard pricing for fashion product development. It’s the same as with any design field: you choose the team you’d like to work with based on their portfolio and references and go with it.
Price shopping and comparing services is something you’re going to want to do first, before you sign on the dotted line. Once you’ve made the decision to work with someone, you could lose a lot of time, progress and money if you decide to switch to another provider. Like design, it’s a creative process, so there will be no guarantees. If things aren’t working out as you’d hoped, you’ll be free to select another company that you’d like to work with.
Once the fashion product development process is complete, you’re ready for production. If the company offers apparel manufacturing for the type of garment you’re producing, you’re in luck! Oftentimes, however, the product development company won’t offer manufacturing. For those items, they may refer you to work with another company. Or you may need to source your own apparel manufacturer. That part can be a challenge! But if you develop your own fashion line correctly, you’ll be able to provide the garment factory with exactly what they need to give you an accurate quote.
How to get an apparel manufacturing quote
Let’s be honest here. If you were a real estate agent, the last thing in the world you want to be doing is taking your weekends off to show houses. Especially to people who aren’t actually looking to buy, right? The dreaded tire kickers! Asking for quotes from manufacturers whose minimums you know you can’t meet is much the same thing. Providing an accurate quote can sometimes take hours. And of course it’s unfair to ask someone to unknowingly work for free. It’s bad manners. But people do it. A LOT. The more unfair advantage is taken, the less likely an apparel manufacturer is to provide you with a realistic quote when you really need one.
When you’re out trying to price out your collection, you’re going to run into a lot of factories that are reluctant to quote anything for you. Now you understand why that is. If you really need a quote, be honest and respectful of their time. Build some trust. Give them the impression that you’ll be a great client. Remember always that your relationship with your manufacturer is just that– a relationship. Take good care of your business relationships and they’ll take care of you!