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Why is it advised to never mention MOQ first when working with manufacturers?

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Vadim26

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I have read @Walter's book a few times, and he mentions that one should never ask about MOQ first or ignore/deviate from any questions asked by a supplier at the beginning regarding this.

The reason mentioned in the book: it makes you look like a newbie importer.

The thing with my product is that I can only commit to a MOQ of 300-500 pairs, while most manufacturers are asking for at least 1,000 order.

It's not an expensive product (~$10 per unit), so factories want to make it worth for them to create a new product as per my design.

Fortunately, I have found 1 factory, but looking for a few more for the sampling stage.

Isn't it counterintuitive that you don't mention your MOQ in the beginning, spend time discussing your product, factory capabilities, asking questions to later find out that the factory doesn't want to work with you unless you commit to their large MOQ (hence time wasted on communication)?

Furthermore, some factories are very determined on their MOQ, despite other negotiation tactics:

  • "This will be a trial order, and later I will double my quantity later.";
  • "My boss has told me this is the only amount we can order in the beginning."

What I am really asking is: if I am only able to buy a small amount of inventory in the beginning, how do I effectively sift through manufacturers and find the ones willing to work with me, without appearing as a noob?
 
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PureA

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Most decent (and genuine) manufacturers will have no problem doing a trial order.

Just speak as though there is no way they'd say no, it's pretty normal.

e.g. I would go through the process of getting the specs down and then write "Ok great, we'll need to do a trial order of X units first of course, when can it be ready etc etc"

You could even offer to pay extra per unit for a lower unit amount.
 

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I always ask for MOQ right from the beginning. I don't want to be talking to a factory for a week and then find out that their MOQ is way too high for me.

My emails are usually, "What is your MOQ and what is the price at that amount?"
 

juresesko

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Hi,
I have question. If you don't mind answering.
How do you reach manufacturers across the world?
Are there any websites that are not Alibaba where you can get the contacts?
 

Lyinx

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my system (it's working good so far)

1'st email: Hi, wondering if you guys make things like this? (see photos) or if I should be reaching out to someone else?

2nd email "Hi so and so, see attached samples/photos/measurements. We're looking to do a batch of 500 pcs, but can you give me a ballpark price so I can see the cost differences (just because it might make sense that way) for 250 pcs, 500 pcs, and 750 pcs... if there are certain price points that make you mfg process better and lower the cost, I'm open for suggestions :)
If prices look in the right ballpark, then we can work on samples and final pricing. I just find it easier to get the ballpark number out there before anyone spends a lot of time to make commitments... and when I say ballpark, I mean, is it in the $10 to $20 range? or are you looking at $50 to $60?
/end 2nd email

what the 2nd email does, it gives them a lot of range to give what I call ballpark prices, but without making any commitments and/or spending a lot of time working on prices. Also, if they are not interested, they'll suggest someone else a lot faster this way than if you waste their time with getting a quote and it doesn't work out.
Lots of studies and info has been done on how to do these things, and we all keep learning :)
 

Walter Hay

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Hi,
I have question. If you don't mind answering.
How do you reach manufacturers across the world?
Are there any websites that are not Alibaba where you can get the contacts?
In the 2021 revision of my sourcing and importing book there are links to genuine exporting sites in 39 countries other than China. You can use the book to locate manufacturers in all of those countries and in China.

It also has a major update of the changes in Alibaba, GlobalSourcing, and Made-in-China, as well as the self-destruction of their own site by Hong Kong Trade Development Council.

For years I have recommended HKTDC.com as the only really safe B2B site for locating suppliers in China, but it has now descended to the level of the others and should be avoided.

The new edition will also contain DIY information on how to locate manufacturers in countries that are not listed. In addition to that there are two B2B sites listed that are searchable for manufacturers in many countries.

The revision is not yet published but for anyone who wants a pre-release copy I will ask my son in law to send it to anyone who pays him the unchanged amount of $97 to his PayPal account which has the name ImagemodeUK@yahoo.co.uk. Please note that is not an email address, it is his PayPal account name.

He is finalizing the formatting so it could be a day or two before he has it ready to send as a PDF.

Walter

EDIT. The 2021 edition has been available since January 2021 and many readers have obtained the PDF version.
 
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Walter Hay

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Most decent (and genuine) manufacturers will have no problem doing a trial order.

Just speak as though there is no way they'd say no, it's pretty normal.

e.g. I would go through the process of getting the specs down and then write "Ok great, we'll need to do a trial order of X units first of course, when can it be ready etc etc"

You could even offer to pay extra per unit for a lower unit amount.
Good suggestions. A trial order can present some extra costs for a supplier, so you should expect to pay more per unit, but any reasonable manufacturer will understand the importance of a trial order.

Answering with a genuine and matter of fact offer to proceed, as in your e.g., will sort out the ones you want to deal with compared to those you don't want.

I would usually recommend offering to pay extra in the form of a handling fee.

Walter
 

Walter Hay

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factories want to make it worth for them to create a new product as per my design.
Having a new product made to your design will always introduce the question of set up costs. If the product requires something like a mold that could cost a lot, yes they will quite reasonably want a decent size first order to cover the big outlay.

If it is simply a matter of preparing a new software pattern to control a machine that can be set up in minutes (e.g. a 3D printer) then they should do that for a small initial order.

Isn't it counterintuitive that you don't mention your MOQ in the beginning, spend time discussing your product, factory capabilities, asking questions to later find out that the factory doesn't want to work with you unless you commit to their large MOQ (hence time wasted on communication)?
You need to be willing to devote time to exploring the possibilities with a manufacturer, especially if it is for a new product. Don't regard it as wasted time. You should never tell them your MOQ, that is their decision and you can negotiate on it, but once you tell them a number, you are stuck with at least that size MOQ, and very likely more.

"This will be a trial order, and later I will double my quantity later.";
Every supplier who reads something like that will say: "Ho Hum, another dreamer, or maybe he's just trying to fool us like so many others have tried."

They get false promises from buyers every day.

Walter
 

Walter Hay

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I was directed to this thread by someone who had looked at it and still needed more help. He was concerned that if he asked for a trial order a supplier might see him as a personal shopper rather than a business buyer.

I assured him that despite some differing opinions on the subject, what I have written in my book really does work.

For those still wavering, I suggest you have a look at my website: ProvenGlobalSourcing.com
where you will see plenty of unsolicited testimonials. Some are from forum members. You will need to scroll down below the flags to see most of them.

Walter
P.S. It might help other new importers to read post#5 in my AMA Sharing my lifetime experience in export/import. Product sourcing specialist.
 

robertwills

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I have read @Walter's book a few times, and he mentions that one should never ask about MOQ first or ignore/deviate from any questions asked by a supplier at the beginning regarding this.

The reason mentioned in the book: it makes you look like a newbie importer.

The thing with my product is that I can only commit to a MOQ of 300-500 pairs, while most manufacturers are asking for at least 1,000 order.

It's not an expensive product (~$10 per unit), so factories want to make it worth for them to create a new product as per my design.

Fortunately, I have found 1 factory, but looking for a few more for the sampling stage.

Isn't it counterintuitive that you don't mention your MOQ in the beginning, spend time discussing your product, factory capabilities, asking questions to later find out that the factory doesn't want to work with you unless you commit to their large MOQ (hence time wasted on communication)?

Furthermore, some factories are very determined on their MOQ, despite other negotiation tactics:

  • "This will be a trial order, and later I will double my quantity later.";
  • "My boss has told me this is the only amount we can order in the beginning."

What I am really asking is: if I am only able to buy a small amount of inventory in the beginning, how do I effectively sift through manufacturers and find the ones willing to work with me, without appearing as a noob?
I believe asking what the minimum order is is one of the first questions you ask so you don't waste anyone's time. Manufacturers only care if you have the money. If you don't have a business credit history they probably will ask for money upfront although some may give you terms. With the internet you can scourer the world to find many manufacturers and compare offers.
 

woken

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Overthinking is what gets us to a lot of complicated situations.


Unless there’s nobody else to make your product, you have choices.

I’m usually compiling a list of 10-20 manufacturers and ask them of their MOQ and price at that point right from the beginning.

Then it’s all sales from both sides.

After I choose one and we get through all the specifics ( that usually take time from both sides) I ask if it’s possible we do a smaller moq ( If I really need one).


Good copy works everywhere, in most cases.
 

Ing

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You allways speak to individuals.
I tried several orders as I wanted to start an importing business 2 years ago.
These individuals never laugh at me or mede me feeling bad, when I told them, that I m at the beginning.
As Walter writes in his book, you often get a small MOQ, when you make your problems clear.
 

Walter Hay

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I believe asking what the minimum order is is one of the first questions you ask so you don't waste anyone's time. Manufacturers only care if you have the money. If you don't have a business credit history they probably will ask for money upfront although some may give you terms. With the internet you can scourer the world to find many manufacturers and compare offers.
Negotiation is never regarded as a waste of time in Asia. Unless you are dealing with very large orders (such as commodity buying, or large machinery,) they will not go to the trouble of checking your business credit history. Even then you will have to pay up front by way of Letter of Credit or Escrow.

When buying consumer products from China for resale, the universal practise is that they require payment in advance. Credit terms are extremely rarely offered. My importing business did obtain credit terms, but then, I know how to negotiate with Chinese business people.

My experience in negotiating in international trade began when I started exporting to China in 1978. After selling my exporting business in 1987 I had a big network of contacts in Hong Kong, mainland China, and Taiwan.

That is when I began importing from India, Thailand, and Malaysia. Later I added Vietnam suppliers.

This is why I have been able to provide in my book detailed advice regarding social and business customs in China and Vietnam. Many other Asian countries have Chinese owned businesses, so understanding Chinese culture is very important.

Even Vietnam now has a growing number of Chinese owned businesses. (See my thread

CHINA PLUS ONE STRATEGY.)

Walter
 

Walter Hay

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1 Overthinking is what gets us to a lot of complicated situations.
2 Unless there’s nobody else to make your product, you have choices.
3 I’m usually compiling a list of 10-20 manufacturers and ask them of their MOQ and price at that point right from the beginning.
4 Then it’s all sales from both sides.

5 After I choose one and we get through all the specifics ( that usually take time from both sides) I ask if it’s possible we do a smaller moq ( If I really need one).

6 Good copy works everywhere, in most cases.
I have numbered your points to answer in order.

1 I don't know what you mean by "overthinking" in the context of product sourcing.

2 If you want to buy generic products you will have hundreds of suppliers, very few of whom will be manufacturers.
If you want a product made to your specifications you need to find a manufacturer. My book explains how to find a manufacturer that produces related products and not necessarily ones identical to what you have in mind.

3 If you have found 10-20 "manufacturers" it is almost certain that most if not all of them are traders or agents, not manufacturers. You are giving yourself a lot of unnecessary work by not making reasonably sure that you have found the right manufacturer before you start negotiations.

4 Any supplier will welcome a newbie, and that is how they will see you.

5 By this stage they will rarely see a need to agree to a smaller order.

6 I assume you mean good communication. Yes, that is where a lot of westerners don't do well. At the very beginning, if you understand the business culture you can largely get what you want, but most importantly, you begin the process of developing Quanxi.

Walter
 

woken

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I have numbered your points to answer in order.

1 I don't know what you mean by "overthinking" in the context of product sourcing.

2 If you want to buy generic products you will have hundreds of suppliers, very few of whom will be manufacturers.
If you want a product made to your specifications you need to find a manufacturer. My book explains how to find a manufacturer that produces related products and not necessarily ones identical to what you have in mind.

3 If you have found 10-20 "manufacturers" it is almost certain that most if not all of them are traders or agents, not manufacturers. You are giving yourself a lot of unnecessary work by not making reasonably sure that you have found the right manufacturer before you start negotiations.

4 Any supplier will welcome a newbie, and that is how they will see you.

5 By this stage they will rarely see a need to agree to a smaller order.

6 I assume you mean good communication. Yes, that is where a lot of westerners don't do well. At the very beginning, if you understand the business culture you can largely get what you want, but most importantly, you begin the process of developing Quanxi.

Walter


Thanks for the reply.

I have stated what I usually do and what works for me.

I’m avoiding agents, and I really mean it when I say I’m finding 10-20 manufacturers.

It all depends on what you’re going to make. I’m not making rockets. :rofl:
 

Walter Hay

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For the benefit of all readers, I should point out that even some Inspection Services when conducting their Onsite Check will identify a trader as a manufacturer, simply because they look at their business registration documents and see the word manufacturing included in the section "Business Scope".

The great majority of Chinese companies when registering a company will include manufacturing among the very broad list of possibilities in the registration document, but very few of them go on to manufacture anything.

That's not deception, it is simply to cover all possibilities should their business progress to the point where manufacturing becomes a good option.

Walter
 

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