What does MOQ mean? Minimum order quantity planner

MOQ stands for minimum order quantity. It is the smallest number of units a supplier will sell you in one order, such as 200 mugs or six cases of soap. This free MOQ planner takes the quantity you want, rounds it up to the supplier's minimum and pack size, and shows the extra units, the weeks of stock that order represents and its total cost. If the supplier offers a lower price for a larger order, it checks whether that price break is cheaper once you count the cost of holding the extra stock.

MOQ meaning in plain language

When a supplier's price list says "MOQ 200", an order of 150 is not accepted at that price, and sometimes not at all. You can order 200, ask for an exception, or buy from someone else. A supplier can set the MOQ per product, per color or size, or for the whole order. Some set a minimum order value instead, such as $250 an order, which works the same way in money rather than units.

Two other terms usually sit next to the MOQ:

• Pack or case size. Many products ship only in whole cases, such as 24 to a carton, so an order is rounded up to a whole number of cases. An MOQ of 200 with cases of 24 means ordering 216 units, because 200 is not a whole number of cases.
• Price breaks. A lower unit price for a larger order, such as $4.50 each from 200 units and $4.00 each from 288. Suppliers call these volume or tier pricing too.

Shopify's guide to quantity rules and volume pricing shows how one wholesale storefront sets these up: a minimum quantity, an increment that orders must be a multiple of, and price breaks that must be greater than the minimum.

How suppliers set an MOQ

A minimum usually reflects what it costs the supplier to make, pack and ship an order:

• Production runs. Setting up a machine, mixing a batch or printing a design has a fixed cost each time, so a maker sets a minimum that spreads that cost over enough units.
• Packaging and freight. Goods packed in cases, inner packs or pallets are cheaper to store and ship whole, so the MOQ is often one case or a set number of cases.
• Raw materials. When fabric, glass or ingredients come in fixed lots, a supplier may set the minimum to use a whole lot.
• Handling small accounts. Picking, invoicing and delivering an order takes time whatever its size, so a wholesaler may set a minimum order value to keep each order worth handling.

Because the reasons differ, minimums are often open to discussion. A supplier may offer a lower MOQ at a higher unit price, a mixed case across several products, or a smaller first order. Ask before you treat the listed number as fixed.

How to use the MOQ calculator

1. Enter the number of units you want to order, from your sales plan or your reorder point review.
2. Enter the supplier's MOQ and its pack or case size. Enter 1 as the pack size if it sells single units, and 0 or 1 as the MOQ if there is no minimum.
3. Enter the unit cost at the MOQ.
4. If the supplier offers a lower unit price at a larger quantity, enter that quantity and its unit cost. Leave both at 0 if there is no price break.
5. Enter the units you sell in a typical week and the cost of holding one unit for a year.
6. Select Calculate. Use example loads the worked example below.

Use whole units for the quantities and the same currency for every cost.

How the planner works it out

Order quantity = the larger of the units you want and the MOQ, rounded up to a whole number of packs

Weeks of stock = order quantity ÷ units sold per week

Holding cost = order quantity ÷ 2 × holding cost per unit per year × weeks of stock ÷ 52

An order is full on arrival and empty when the last unit sells, so on average about half of it is on the shelf. Holding cost is the cost of keeping stock: Virginia Tech's inventory management guide names taxes, insurance, obsolescence, storage space, handling and IT costs as its common parts. Enter it as a money amount per unit per year, or enter 0 to compare purchase prices alone. If you know your yearly carrying cost rate, multiply the unit cost by it: a 25% rate on a $4.50 unit is about $1.13 a year. The inventory carrying cost calculator helps you build that rate.

For a price break, the planner rounds the break quantity up to whole packs, prices it at the lower unit cost and works out its holding cost the same way. It then compares the cost per unit, purchase price plus holding, for both orders. A positive saving per unit means the larger order is cheaper overall; a negative one means the extra holding cost outweighs the lower price.

Worked example: 130 mugs against a 200-unit MOQ

The fictional Meadow Corner shop wants 130 stoneware mugs. Its supplier's terms and the shop's figures:

The MOQ lifts 130 to 200, and 200 ÷ 24 = 8.33 cases, so the shop needs 9 cases: an order of 216 units. That is 86 more mugs than it wanted, and 216 ÷ 12 = 18 weeks of stock. The order costs 216 × $4.50 = $972. Holding cost while it sells is 108 average mugs × $1.04 × 18 ÷ 52 = $38.88, or $0.18 a mug, so each mug costs $4.68 with holding.

The price break order is 288 mugs, exactly 12 cases, for 288 × $4.00 = $1,152. It lasts 24 weeks, and its holding cost is 144 × $1.04 × 24 ÷ 52 = $69.12, or $0.24 a mug, so each mug costs $4.24 with holding.

The price break is cheaper by $0.44 a mug, $126.72 across the larger order. It needs $180 more cash up front and leaves 158 mugs more than the shop first wanted. Mugs keep, so the larger order may suit. For stock with a short shelf life or a season, extra weeks on the shelf can cost more than the saving.

When the MOQ is more than you need

Extra units cost money only if they do not sell in time. Before you accept a minimum that is well above your plan:

• Check the weeks of stock. Compare them with shelf life, the season and the space you have. The days of supply calculator gives the same measure for stock already on hand.
• Ask for a lower minimum or a mixed case. Suppliers sometimes accept a smaller first order, or let you combine sizes, colors or products to reach it.
• Compare suppliers. A higher unit price with a lower MOQ can cost less overall than a low price that leaves stock on the shelf. The supplier comparison scorecard weighs price, minimum order and other criteria side by side.
• Push the next order back. Once a large order arrives, set the next review for when it runs down rather than on the usual cycle.

When the MOQ is below what you need, the order size is your choice. The economic order quantity calculator estimates an order size that balances ordering and holding costs, while this planner shows what a supplier's terms make you buy. When you have settled on a quantity, prepare the order with the purchase order generator.

Frequently asked questions

Can I use the MOQ planner without an account?

Yes. Enter the figures and calculate. Nothing is saved or sent, so use Copy result if you want to keep the figures.

What is the difference between MOQ and EOQ?

The MOQ is the supplier's rule: the fewest units it will sell in one order. The economic order quantity is your own estimate of an order size that keeps ordering and holding costs low. If the EOQ is below the MOQ, the MOQ decides what you order.

What if the supplier sets a minimum order value?

Divide the minimum value by the unit cost and round up. A $250 minimum at $4.50 a unit is 250 ÷ 4.50 = 55.6, so 56 units; enter that as the MOQ. If the minimum covers a mixed order of several products, this planner works one product at a time, so plan each product's quantity and check the order total separately.

Does the planner include delivery charges?

No. If delivery is charged per unit, add it to each unit cost. A charge per order is spread over more units in a larger order, which favors the price break, so compare it separately.

Where can I read about minimums for custom merch?

For branded shirts, totes and stickers, see how to order custom merch in small quantities, which covers print on demand and suppliers with no minimum.

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