what's up guys welcome to sourcing warriors channel when it comes down to
place the first purchase order with the Chinese supplier especially with Alibaba
suppliers the biggest challenge many Amazon sellers face is to meet the
Chinese suppliers requirement for a minimum order quantity aka I'm OQ
because there's so many people having issues with moq in sourcing warriors
Facebook group we actually had a fun contest to give moq a different name
some people call it my order quantity some people call it maximum order
quantity I thought that was pretty cool instead of your minimum order quantity
how about my maximum order quantity if you get some cool names for ammo queue
please comment below I think it will be fun to share with everyone so how we can
convince the supplier to change their mo Q to our desired quantity in this video
I'm gonna share with you some awesome tips if you like the contents please
don't forget to Like and subscribe sourcing warrior's Channel let's get
started
first guys let's answer two questions question number one is the mo Q quantity
rail and the answer is yes and no some of the mo Q quantity is completely
made-up it's a subjective number your supplier asked you to follow in your
place of first purchase order some of the mo Q's are real because in order for
the factory to produce the product not only they have to buy a minimum quantity
of a raw material but they also need to set the Machine up sometimes the set-up
time is very long and it's very expensive so if you're customizing a
product they may have to buy an unique component just to run your order and
therefore they need you to buy a minimum order quantity assume your suppliers mo
Q is real now the question number two is why you as the buyer wanted to buy a
quantity less than your suppliers mo q your primary reason to buy a smaller
quantity should be using a smaller quantity to validate the suppliers
production quality if your reason is I am not sure if this product is going to
sell or I don't have a lot of money right now well these are valid reasons
but if you're not sure if this product is going to sell please go back and
continue to validate the market research and make sure that you feel confident to
move forward and if you don't have a lot of money which I understand but keep in
mind after this small quantity PI you are going to need more money in order to
continue to buy more down the road so regardless of your reasons please don't
ever and never and ever to use the reason I'm not sure if this product is
going to CEL or i don't have a lot of money don't
let your supplier sense your weakness always negotiate from a position of a
strength and confidence now you're confident going into the negotiation
when to negotiate then say you got quotes you got five suppliers quotes
they all have a different price and different different mo cues it is so
tempting to start negotiating right away but wait please don't waste time because
you don't even know if their samples are going to work out yet
but in this process now you can plant a seed you can say something like this
just for you now our first purchase order quantity may be lower or higher
than your moq it depends on your product sample quality after you get the samples
you've evaluated the samples and you're serious about getting into customization
stage redesigning the product customizing the logo different
variations and different colors maybe customize the packaging now you can put
your cards on table and start to negotiate instead of me continue talking
let me hop onto my computer show you some scenarios and show you some
negotiation techniques okay guys let's say your supplier mlq is 1000 and your
desired buying quantity is 300 let's go into the negotiations with the suppliers
going to be fine negotiation walked one remember I said
previously if your reason's is I'm not sure if this product is going to sell or
I don't have a lot of money to start don't use those reasons if you're
customizing your product you can say something like this DeMuth the
improvements and customizations were making we think it's critical we get the
first production run done right for the first order we have a decided to order
300 pieces to validate your company's production quality now give her some
space civic reasons number one we need to make
sure XYZ key specs are done right what are the key specs you should know if
you're customizing your product if you don't know go on to Amazon find an item
that is close to what you are going to make and read the negative reviews that
should give you some warning signs some warning signs for your product so use
those as a key spec for your supplier to validate and number two we need to test
packaging durability to make sure the design is sufficient to sustain the
potential shipping damage which is true you do need to test those and number
three the small order will also help us gather market feedback so the next large
order next large water is going to done perfectly those are very valid reasons
and those are very fair reasons if your supplier agree by now that is good for
you if you get the answer like this sorry
it cannot make three hundred we will lose money that is fine they said they
will lose money now you'll go into negotiation wrong - I'm wrong - they
said they are going to lose money what about you you understand that understand
we certainly don't want you to lose money especially for the wrong long run
that is true because they're your business partner if they lose money they
cannot support you and specifically not only they lose money you actually lose
more money you're in this together so you can see something like this - order
a small quantity like this our company will lose a lot more money because we're
going to pay a lot more on shipping as you know the air freight alone is going
to cost us XYZ dollar that is why we only want to do this one time just to
make sure everything is done right so you basically put yourself on an
equal footing with them they said they will lose money by running your smaller
quantity pie and you tell them not only they lose money you - you lose more
money and you're in this together as a partner so if your supplier
understand they may give you a smaller moq right now but if they continue to
say something like this I understand but my boss said we cannot produce at 300 oh
now he where she is poling the boss cart you have to go into the negotiation
wrong three so if you're going into the negotiation wrong three you can start by
being a little bit more playful because even though the negotiation is very
serious you can still build rapport with the representative from your supplier
set because start by saying something like this
your boss still says no should I talk to your boss directly
smelly face and now you can show her your credibility of selling the product
you can say something like this we have successfully sold many products your
company seems to be the most difficult to work with
on moq we are a serious buyer for any new product launch we have to spend a
lot of marketing dollars to promote it for example half of your 300 units will
be given away free now notice this I said half of your 300 units I'm now
saying half of my 300 units or our 300 units and this is like making a
commitment for her and secondly we will spend some money on local photography
and packaging which is true and the third after receiving your first 300
units we're going to have to spend a lot more money on advertisement now you
begin to be a little bit more place playful again this beautiful or handsome
we plan to sell a lot of your products you are going to make a lot of money for
your boss so this is the key point guys before this supplier walk away say
something like this okay I will talk to my boss one more time she's walking away
where he's walking away you got to put your foot down by saying something like
this thank you I hope you don't lose your business because of your mo
you right now we're comparing two suppliers your company is one of them we
would love to work with you but we need to you need to let me know by tomorrow
if 300 piece order is okay if not we won't waste more time on this basically
this is what you're showing you are giving her a deadline you are signaling
her your willingness to walk away this is quite powerful guys if you show this
80% of the time your supplier should be able to give you their compromise to
your lower quantity I in this case it's 300 pieces instead of a thousand however
if you're really facing a challenge you get this on the wrong 4 and your
supplier is saying something like this sorry
my boss still says no because now you have to really listen listen carefully
of their because because that is their to know their true reason of the reason
they cannot work with you to lower their mo Q if you listen carefully you will be
able to score on the final round let's go into the final round in the final
round I'm gonna share with you five negotiation tips to really take a home
number one if there because is there setup fee for example they say oh our
setup fee is very high how much 200 300 how about I share a little bit with you
be flexible working with them understand they do have a setup fee therefore
you're willing to share with them because you're a partner with them and
number two is that because there they have to buy a minimum quantity of a
unique component for your customized product if that is to ask them can you
buy smaller quantity for that unique component and pay a little bit more if
you have to so I don't have to buy the minimum quantity
for the entire product so ask them and number three is if they really cannot
lower the mo hue they said they will lose money
how about offer a slightly high slight higher price for example if their mo Q
price for 1000 piece is five dollars you can offer maybe I will pay you five
thirty five forty five dollar 30 cents five dollar forty cents for a three
hundred quantity by asked them and number four instead of buying three
hundred how about I offered to buy five hundred pieces still less than your a
thousand but I'm trying to compromise and make it work and number five is you
can draft a purchase order and send it over to them and show your commitment
and show that you are serious of working with them if they still say no you know
they can't but most likely by now you should be able to store
alright guys after you try all these negotiation techniques I'm pretty sure
you're getting a good chance of getting what you wanted even if you make a
little bit compromise during the negotiation you know now a lot about
your suppliers cost structure their decision maker and also their
negotiation style and the most important all is that they know that you are a
serious buyer you're a professional buyer they cannot run you over and take
advantage of you I hope this helps guys if you liked it please remember to Like
subscribe and share the content have a brilliant day I'll see you soon
you