From:Dingfeng General Merchandise Co,. Ltd.  Date:2019-03-04 08:48:23  Hits:1076  Belong to:Business News

1. Low-profit margins require larger volumes.

Like Most Chinese manufacturers,we http://www.ibagcase.com/AboutUs.html has the low-profit. Often as low as 3 to 4%. Low-profit margins require the supplier to produce a large number of products in order to break even.

2. Our suppliers MOQ requirement is a reflection of the MOQ set by our materials subcontractors.

The manufacturer we are  not always to blame for high Minimum order quantity requirements. Our suppliers tend to keep a minimum stock of materials and components.

As such, we must buy materials and parts from subcontractors, on an order to order basis. This, in turn, requires that the factory us can satisfy the MOQ of the subcontractor.

This also explains why different items and different materials (or even colors of the same material) has different MOQs.

With some effort, it is possible to work out how the MOQ can be lowered, by identifying which materials and components the supplier keeps in stock, or can buy in lower minimum order volumes.

There are, however, certain limitations to this approach. For example, materials that are compliant with REACH, or other chemical regulations, must be procured in a larger volume.

As product compliance is not optional, going around the MOQ requirement using ‘standardized materials’ may not always work.

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