MOQ (Minimum Order Quantity)
Quick answer
The minimum quantity a supplier accepts per order - a factor that directly affects inventory levels, cash flow and unit cost.
Key takeaways
- Cash flow - a high MOQ locks more cash in inventory
- Storage space - large volumes need extra capacity
- Expiry / dead-stock risk - especially for perishable or seasonal goods
- Unit cost - a higher MOQ usually brings a lower unit price
What MOQ is
MOQ (Minimum Order Quantity) is the minimum number of units a supplier will sell in a single order. Suppliers impose MOQs to cover their production, setup and logistics costs. For the buyer, MOQ is a trade-off between a better unit price (at higher volumes) and tied-up capital + overstocking risk.
MOQ's impact on the business
- Cash flow - a high MOQ locks more cash in inventory
- Storage space - large volumes need extra capacity
- Expiry / dead-stock risk - especially for perishable or seasonal goods
- Unit cost - a higher MOQ usually brings a lower unit price
How to optimise it
The optimal order decision balances the supplier's MOQ with real demand and safety stock. The EOQ (Economic Order Quantity) model helps find the quantity that minimises total cost (ordering + holding) while respecting the MOQ constraint.
How CRMconnect helps
CRMconnect, as an operational layer wired into the ERP, computes replenishment quantities from real demand and safety stock, respects each supplier's MOQ constraints, and auto-generates optimal orders. Result: less needlessly locked cash and less dead-stock. CRMconnect is not accounting software - it automates the operational replenishment decision.
Real-world example
A distributor always ordered at the supplier's MOQ 'to get the discount', ending up with 3-4 months of stock on slow-movers. With CRMconnect matching MOQ to real demand, orders adjusted to actual need, cutting average stock 22% with no stock-outs.
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Frequently asked
What does MOQ mean?+
MOQ (Minimum Order Quantity) is the minimum quantity a supplier accepts per order. It directly affects inventory levels, cash flow and product unit cost.
Why do suppliers impose an MOQ?+
To cover their production, setup and logistics costs per order. Below a certain volume, the order is not profitable for the supplier.
How do I optimise orders with MOQ constraints?+
By balancing MOQ with real demand and safety stock, ideally with the EOQ (Economic Order Quantity) model, which minimises total ordering + holding cost while respecting the MOQ.
How does CRMconnect help with MOQ?+
CRMconnect computes replenishment quantities from real demand and safety stock, respects each supplier's MOQ and generates optimal orders - less locked cash and dead-stock. It is not accounting software.
Where CRMconnect fits
Related terms
Safety stock
Extra buffer inventory held to prevent stockouts caused by demand or supply variability.
LogisticsReplenishment
Automatically refilling picking locations from reserve stock to prevent stockouts during picking.
B2B commerceVMI (Vendor Managed Inventory)
The supplier manages stock at the customer/shelf - orders are triggered automatically at threshold, not issued manually.
B2B commercePurchase Order (PO)
The official document by which you buy from a supplier: agreed products, quantities, prices and terms.