To start a small business, dropshippers can not undertake the pressure of stacking items. So, how to negotiate a low MOQ order with a Chinese supplier? Let’s find out.
You can’t run away from MOQ standards when ordering from Chinese suppliers.
We won’t know whether it has promising quality as advertised, how compatible they are for the long term, and the shipping durability.
To confirm all those, a sample inspection is far from enough. You need to test it out for the products that begin at a low MOQ.
We sum up some negotiating skills for you to apply to the business table. Advanced skills are also included. Want to know more? Let’s get to learning!
Why Suppliers Require MOQ
Since the factory start-ups based on your orders require the bulk purchase of materials and high start-up costs to get the machines up and running for production, they’ll always need a MOQ(Minimum Order Quantity) to control the risks of money loss.
However, the risk is much higher if we, as Dropshippers, order large pcs with a brand new supplier the first time we work with them.
Now, always remember, they all want the business; they all want a market share. So almost all suppliers are negotiable.
When negotiating with the suppliers, do not let them sense your weak spots. Be prepared, and be confident. Take control of the table.
For Negotiable Suppliers
Enable Your Authority
First thing first, you must let your suppliers know that you’ve done your research adequately. That you’ve assembled a professional team in which case have put work on promoting said product.
Convince them you are entitled, you are able to sell a product and are experienced.
As an example of our actual encounters, a Dropshipper is considering a purchase order of 20 drones.
The tricky part is, it’s a batch of 20 different types of drones, and he only wanted one for each kind.
He negotiates with the MOQ by explicating the Units Per Transaction with the suppliers and convinces them he is experienced.
Throughout market research, these drones are popular. Not only that, but he also came up with the payment plan for the order, draft them to show the will to collab, which later I’ll explain in detail for following tips.
Unsurprisingly, he won over the negotiation with the ideal MOQ for 20 drones, one for each kind.
Tell the suppliers that you’ll get them if you do not have market research to back you up. That you need a small number of orders to gather market feedback. Nevertheless, you are confident in the result.
And then, after the first market survey, you will compile opinions and revise the factors affecting the order, and you will place an order with a large MOQ the next time.
Tell your supplier that you need to test shipping durability at a low MOQ to validate if they provide consistent shipping service. That you need to make sure the design is adequate to prevent possible damage to the package.
More importantly, it is a test of their leading time as well. If you do not have a sourcing agent to help with the shipping, these are all crucial elements to ensure yourself before starting a partnership with the supplier.
It is the truth if a supplier does not provide careful shipping service for the products, resulting in complaints & refund requests at the customer’s end. It will damage your business greatly. If this happens and you place a high MOQ order, things are even worse.
There may lie fatal drawbacks to your product that a regular inspection failed to spot out.
Here is a trick you can do if you are not sure what kind of problems the customers may have with the product:
- Go to Amazon and browse the negative reviews of those products similar to yours.
- List all their disappointments, express the improvements you’d wish to be made.
- Let suppliers understand your concerns.
Be on Their Side
No one is safe in their first business exploration.
The supplier will argue that to give you a low MOQ, they will lose money in production. Let them know, you too are facing risks, /and you too are in this together.
Express definite costs like air freight with an overwhelming MOQ could be devastating.
And make a promise this MOQ would only be a one-time thing; you do want their partnership for many years to come. You just want to know the experience of us working comprehensively.
Now we’ve talked about several major points you could do to negotiate a low MOQ.
Those are more tips in communicating skills; if your supplier is understandable, then putting those tips into a negotiation table should make this easy peasy thing.
However, if they are a hard stone that’s hard to be persuaded, try the following tips we will give that could be more practical and persuasive.
For Adamant Suppliers
Compare the supplier you are currently negotiating with to another supplier. Make sure they realize you have a choice, that if they refuse to lower the MOQ, you are willing to walk away.
Let them know you are the one who is in charge of calls dibs. Make your supplier panic a bit, and push the deal of low MOQ you want to be done.
Although, it is still necessary for you to find a backup supplier if the deal goes south. You have to have a Plan B because your Plan A may have a Plan B.
Give a Deadline
Often the situation is when negotiating, your supplier is hesitating whether to take this deal. The longer they think through the pros and cons, the higher chance they may go with a safe choice.
They might also reply such things as “My boss says no,”or “We can’t take the risk.”
What you should do is to give them a deadline; let them discuss for a moment. This tip, combined with the last one, will make them think you have an alternative choice and to make an impulsive rash decision.
but also learn when is the right time to defend and make peace.
Share Production Fee
As I’ve mentioned at the beginning of this video, it takes resources as well as money for a factory to start producing your products. To make the machine up and running for your business is a fair cost.
If you are keen to make the deal happen, you can always surrender part of the profits. Take responsibility for part of their set-up fee.
Or that express the willingness to accept a slightly more expensive fee for the lower MOQ order.
Suppose your supplier is that hard to be persuaded at. Negotiate for a bit higher MOQ than you originally thought. Maybe 100 pcs more. Take a step back for both ends.
It’s like a sword standoff in the middle ages. You two are the knights, Know your time to attack, but also learn when is the right time to defend and make peace.
But keep in mind, if you are looking for an order with one MOQ only, it is practically not possible. Oftentimes with lower MOQ, the price per item will increase.
After you tried those tips I offered, I’m pretty sure you’ll close the deal.
Make your business a zero-sum game rather than an inevitable duel that ends with someone defeated.
Negotiation is some way of art in business. Learn to master it.
Needless to say, hiring an agent is always a solution. We’ll negotiate with the supplier for you at NicheDropshipping if you want.
We will get you the right MOQ you set your mind to; compare with several suppliers to get you the most affordable price and more!