Well, hello there! If you are burning your brain cells wondering what MOQ is for Amazon sellers and why you should be interested in it, then this article is all you need. This MOQ meaning and importance guide is built considering all the facts put forth by the latest reference module of Amazon. So stay tuned till the end.
As an online retail platform, Amazon offers its sellers many perks to improve their products and sales. However, these benefits also come with stricter criteria. For example, the number of units in a single order is limited on Amazon, as it can affect their inventory management. Along with that, the supplier may even have to suffer some severe losses.
Even if you are working with an independent supplier and not directly with Amazon, you must comply with their MOQ requirements for your product to be listed on their site. That being said, the term MOQ stands for Minimum Order Quantity. If you have ever tried to sell something on a smaller scale or test the waters with a new product before committing to larger quantities, then you know about minimum order quantities. While this might seem like an administrative burden at first glance, there are good reasons why suppliers impose such terms and why customers should respect them.
So without any further ado, let's take a look at what MOQ requirements are and how they apply to your business:
What is MOQ Meaning? – From the A’s to the Z’s of Amazon’s MOQ!
MOQ stands for Minimum Order Quantity.” This is the number of units you must order from a supplier in a single transaction, as this particular factor does affect multiple others. Amazon defines Minimum Order Quantity limit as an offer level attribute that informs customers of the minimum purchase quantity of any product from an ASIN's offer. This binds the customers in a situation where they can only purchase the quantity equal to or greater than the set MOQ limit.
If you want to sell an item on Amazon, you must first find a supplier that makes and ships it from the country where you plan to sell it. Once you have found a supplier, they will most likely ask you to order a certain quantity of the item.
This is the MOQ. Even the suppliers on Amazon want regular customers to request a specific number or more. The simple reason behind that is profitability. According to Amazon, all categories of FBA, Easy Ship, and Seller Flex offers with free delivery are all suitable for the scheme. Another thing worth noting is that the limit will automatically be applied to eligible offers for Amazon business (business-to-business). The significant part is that you are charged no additional fee for applying MOQ to your offers.
💡 Amazon MOQ Limit Importance: Is it a Must for all Amazon Sellers?
MOQ limit is a vital factor for any ecommerce business, and Amazon is one of the leading platforms in this field. For sellers who are well established and are earning decent profit from sales, setting the Minimum Order Quantity for their product listing is not a compulsory process. But this is not the situation for all sellers as not all of us are on the same page.
For example, a seller or supplier gets an order for a product he has listed, but the quantity demanded by the customer is nothing more than a single item. Now, the supplier has to follow Amazon's strict packaging/labeling rules, pay shipping charges or other additional costs, and all this just for one order. Well, this does not look that profitable. That is why the MOQ is a cost-effective strategy for such sellers.
Not just that, the production cost that a manufacturer faces is also sorted out because of the profits earned due to MOQ limit. It is necessary for scaling where the manufacturer often produces limited goods and needs to buy material as per the received orders. So it is something both a seller or a manufacturer/producer should be aware of.
How is MOQ helpful for sellers and resellers?
As we have seen, a higher quantity of product is usually required to purchase and resell it. This is especially true with Amazon, where the MOQ requirement is in place to ensure their inventory remains at a proper level. A resale business like yours cannot sell an item the supplier does not have at hand at a warehouse or retailer.
To avoid missing shipments, errors, and a general breakdown of order fulfillment, the MOQ serves as a safety net for all parties. If you don't meet the terms of the contract, the supplier won't uphold their end. As such, you will have to find another supplier with a lower MOQ to make your order happen.
Advantages of Minimum Order Quantity (MOQ) – How can You Benefit from the MOQ Limit?
Now you know the meaning of Minimum Order Quantity and to whom it is important. But you might still question, what are its benefits? That is what the following section covers. As an Amazon Seller, these benefits are a must to know.
- Low Price per Unit: Firstly, the shipping cost per unit is reduced, which will depreciate your expenses. If the product is not profitable when sold alone, MOQ will help you get your deserved profit.
- Time-Saver: You will also be saving a lot of time as well as money by not creating the multi-packs. Other than that, the processing of MOQ requests only takes two business days.
- Enhanced Rankings: It may even get your product listing more visibility by omitting “duplicate listings of different pack sizes.” It will even help get all the sales and reviews under one roof.
Along with all these, customers can also benefit because of MOQ. The search experience will be enhanced because the double-listed multi-pack products will be omitted. They will now be able to order bulk stocks depending on the number of products listed.
👉 Caution: Are there any Cons of MOQ that you should be aware of?
The benefits of MOQ are quite attractive, and gladly, there is nothing negative about the MOQ limit. But you should be well aware of some of its demerits.
Firstly, not all products can be included under MOQ. Specific categories won't be allowed to be listed under the Minimum Order Quantity limit. You can also not include bundled products in the MOQ scheme. Another disadvantage is that users cannot self-manage their MOQ limits on their offers on Seller Central (Amazon). You also won't be able to set deals on your MOQ offers.
You might think that this strategy will help you save a lot of money, which is true, but you will have to pay the cost upfront. This might be a big and tough step for someone who is at their initial stage or owns a small business. But you should think of it as a small investment, which when combined with your well-planned business and marketing strategies, will turn out to be quite fruitful.
Sellers should also be aware of the hidden cost that some suppliers might trick you into. Some Chinese suppliers may have an additional fee apart from their MOQ. Therefore, a buyer should be well aware during these transactions.
What MOQ rules will apply to Amazon B2B orders?
The MOQ limit rules by Amazon will automatically be applied to orders that are eligible for Amazon Business. If Quantity and Business Prices Discounts are configured on an offer, then the MOQ limit will not be displayed on such offers. This will allow the customers to purchase their desired quantity. You are requested to visit Amazon's official page for more detailed information about the scheme and its variations.
Should You Worry when Your Inventory Level Drops Below the MOQ Limit?
This can be included as one of the scheme's advantages. If the inventory level were to drop below the MOQ value, then the limit would be auto-removed from the offer. When the MOQ limit is removed, the customers will be able to purchase the products from the remaining stock as per their desired quantity. And once the inventory level increases and is back on track, the limit will be re-applied automatically. So this automation helps you save your time and lends a helping hand in running the business smoothly.
👉 What should newbies watch out for?
You must be careful not to cut any corners or try to game the system to get around the MOQ requirement. What you must remember is that even though you are not purchasing the items directly from Amazon, they are still your customers. Make sure you understand the MOQ requirement for each item you want to sell as a seller. For someone new to the game, wholesale sellers are a good option. This will allow you to order individually rather than ordering it in bulk.
👉 What is the lower or upper limit on MOQ value that can be applied to an offer?
To be honest, the item's listing price that can be placed under the MOQ limit varies from place to place. An SKU's MOQ limit may be modified, but doing so in a way that violates the MOQ program policy (including the thresholds described above) will result in MOQ limits being removed from store listings.
FAQ related to MOQ Meaning
What is Minimum Order Quantity?
It is an offer level attribute to inform customers minimum quantity to be bought from an ASIN’s offer. The customers can only be able to purchase the quantities when it is greater than or equal to the set MOQ limit.
What are the benefits of MOQ for the customer?
The customers will get various benefits from the MOQ limit: It allows customers to order huge quantities above the MOQ limit. It eliminates duplicate listings of the same product and thus improves the search experience.
What are the benefits of MOQ for Amazon sellers?
MOQ allows Amazon sellers to offer their low-priced selection in a very sustainable manner. It saves AMZ sellers money and time in creating multi-packs. MOQ eliminates duplicate listings and makes the search experience better. It lowers the costs required for per-unit shipping.
How long will it take for my MOQ requests to be processed?
The MOA requests of Amazon sellers will be generally processed within 2 business days.
Do I need to pay any fees for applying MOQ limits on my offers?
On your eligible offers, you are not required to pay additional costs for applying MOQ limits.
Conclusion: Amazon MOQ Meaning 2023 – Why MOQs are Important?
The minimum order quantity for any item is the number of units you must purchase from a supplier in a single transaction. Meeting the MOQ requirements will help your product earn you a sure extra profit. As a supplier, you might have different individual reasons to set a MOQ limit. If your supplier has numbers that are beyond what you can digest, don't hesitate to hunt for a new one. MOQ is meant for Amazon sellers, so it is only fair that it works out well for you along with your business model.
There are negotiable options when it comes to business, so even that is something a seller should dive into in search of profits. Because ultimately, that is what you have entered the game for. The article deals with aspects related to MOQ, and we hope we were able to burst your doubt bubbles.