Minimum order quantity, also known as MOQ, is a simple concept that can quickly gum up the works of your production run.
Factories won’t produce your garments unless you agree to produce a minimum number of pieces per design. This number varies from factory to factory, and also depends on the technical characteristics of the designs; while some accept orders in the hundreds, the MOQ is generally in the thousands. This is why it’s extremely important to find the factory that is best suited to your production needs.
There are various reasons for requiring a MOQ but they more or less all fall under the same category: factories don’t just have the materials on hand. The fabric is ordered specifically for the production run, and all of the labels and accessories are produced specifically for the designs. This means that fabrics, accessories and all other materials necessary for production need to be ordered in keeping with the factory’s MOQ while keeping costs manageable, since a smaller production run can cost as much as a big one if you don’t manage this carefully.
Another element to consider is that the machines need to be calibrated to cut the fabric according to design. When calibration is done for small quantities factories can charge an additional fee for the pattern making and calibration of the machinery.
The quantity of units also affects the packaging available for the order. Packaging is also outsourced, and as with fabric suppliers is limited by MOQ requirements. If you only need 1,000 specially printed boxes and the MOQ is 2,000 it’s likely that the price of the boxes will hike considerably.
When you’re dealing with slim profit margins (between 2 and 3%) it simply isn’t profitable for a factory to produce less than a minimum quantity of each design.
In the last few years smaller MOQs have been offered by more factories. This trend is attributable to agencies like Apparel Network that work closely with designers and factories and fill in the gaps that the system presents. Agents can help the designer find the fabric they need and order it for them, rather than relying on the factories to do so.