How should we respond when customers request a reduction in MOQ?

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Dec 04,2023
With the increasing demand in the foreign trade market, more and more significant orders are gradually disappearing, being replaced by smaller orders. There are various reasons causing this phenomenon. Some attribute it to economic downturns leading to insufficient funds, resulting in smaller order patterns. However, this is a narrow viewpoint. The primary reason is the evolving market demands. Adhering to the pace of market development is the right choice. MOQ refers to the Minimum Order Quantity set for each product. Buyers must make purchases based on this minimum requirement. If the MOQ is not met, the enterprise won't deliver. Yet, exceeding the MOQ significantly can create an inventory crisis, leading to an accumulation of unsold goods. Therefore, striking a balance between the two is crucial. This requires foreign trade personnel to exercise appropriate control and guidance over order quantities to achieve the optimal order volume.

1. How to respond when foreign trade customers demand a reduction in MOQ:


In the event where foreign trade customers request a decrease in MOQ, i.e., wanting to lower the minimum purchase quantity, how should foreign trade personnel respond? First, increase the product's price. If a customer's order quantity does not meet the MOQ, the enterprise will correspondingly raise the product's price. On one hand, customers may add to their order due to the price increase balancing the quantity. On the other hand, if a customer purchases below the MOQ, the enterprise won't yield any profit. Therefore, by increasing the product price, the enterprise can earn a bit more. Secondly, encourage the customer to increase the order quantity reasonably. Explain to customers how a low MOQ will negatively impact both the enterprise and the customer. Illustrate these adverse effects, as it's unlikely anyone will neglect their personal interests. Hence, persuading customers to increase their orders is not an arduous task. Additionally, the company can adopt an approach of combining orders. If a customer genuinely faces difficulties due to insufficient funds or a small-scale business, it's unnecessary to strictly adhere to the MOQ. The customer can place an order based on their actual situation, and the foreign trade enterprise can combine multiple orders from different customers to reach the MOQ effortlessly. Finally, allow customers to place orders first. As orders accumulate to meet the MOQ, shipments can be sent out in batches. This resolves issues related to insufficient funds or inadequate warehouse space for the customer. Placing a comprehensive order meeting the MOQ at once is also cost-effective.

2. How foreign trade enterprises should respond to small orders:


As the foreign trade industry continues to evolve, market dynamics change accordingly. Small order quantities have become a development trend in the foreign trade industry. Therefore, foreign trade enterprises need to adjust by gradually reducing the MOQ to accommodate smaller orders, embracing this trend. Regardless of how small an order may be, if the enterprise can manage it, quality matters more than quantity. Foreign trade personnel need to handle small orders flexibly. For instance, merging small and large orders or combining two small orders into a larger one are effective methods. This not only provides convenience and benefits to customers but also increases the order volume and revenue for the foreign trade personnel. Hence, in the future of foreign trade, flexibility and understanding are crucial. Less rigidity and conflict, and more adaptability and comprehension are preferred.

In summary, when facing situations where customers' purchase quantities don't meet the MOQ, foreign trade enterprises should analyze and summarize, striving to take effective measures to change this phenomenon. This will lead to a more stable and sustainable development in the foreign trade market. Future foreign trade should evolve towards flexibility and adaptability rather than being static. Small order quantities are a future trend, and how foreign trade personnel respond is key. Maximizing mutual benefits in transactions through negotiation is crucial. As the number of orders failing to meet MOQ increases, foreign trade enterprises must adapt to the changing times.
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