MOQ, Pricing and Payment Terms Explained

Understanding MOQ (Minimum Order Quantity)

MOQ is the smallest quantity a factory will accept for a production run. In Yiwu, MOQs are generally lower than in other Chinese manufacturing hubs because the market is built for small commodity wholesale.

What Determines MOQ

Mixed MOQ: The Yiwu Advantage

Many Yiwu factories allow “mixed MOQ” — combining multiple SKUs to reach the minimum. For example:

• Factory MOQ: 500 pcs
• You want: SKU A (200 pcs) + SKU B (150 pcs) + SKU C (150 pcs)
• Total: 500 pcs — order accepted

This is especially valuable for Amazon sellers and retail buyers who need product variety but cannot commit to 500 pcs of a single SKU.

How Wholesale Pricing Works

Price Tiers

Unit price drops as quantity increases. Here is a typical tier structure for a stainless steel tumbler:

The sweet spot for most buyers is 500-1,000 pcs per SKU — you get most of the price benefit without overcommitting inventory.

What’s Included in FOB Price

FOB (Free On Board) price includes:

• Product manufacturing cost
• Inner packaging (poly bag or bubble wrap)
• Outer carton packing
• Export carton marking
• Factory-to-port trucking
• China customs export clearance

FOB price does not include:

• Ocean freight or air freight
• Insurance
• Destination port charges
• Import duties and taxes
• Customs broker fees
• Inland trucking at destination

Hidden Costs to Budget For

Payment Terms

Standard Payment Structure

Most Yiwu suppliers use a two-payment structure:

1. 30% deposit — Paid before production starts. Triggers factory to begin manufacturing.
2. 70% balance — Paid before shipment, after quality inspection is passed and loading photos are provided.

Payment Methods

Negotiating Payment Terms

For first-time orders, expect to pay 30% deposit upfront. As you build a relationship with repeat orders, you can negotiate:

• 20% deposit instead of 30%
• Payment after bill of lading copy (balance against B/L copy, not before shipment)
• Net 15-30 terms for established customers (rare but possible after 3+ orders)

Calculating Your Landed Cost

Landed cost is the total cost to get the product to your warehouse. Here is a formula:

Landed cost per unit = 
  (Unit FOB price) 
  + (Freight per unit) 
  + (Insurance per unit) 
  + (Duty per unit) 
  + (Customs broker per unit) 
  + (Inland trucking per unit)

Example Calculation

Product: 40oz Stainless Steel Tumbler (BA-001) Order: 500 pcs FOB price: $3.60/pc Shipping: LCL to Los Angeles, $450 total Insurance: 0.3% of order value = $5.40 US import duty: 3.4% (HS code 9617000000 for vacuum flasks) Customs broker: $150 flat Inland trucking (port to warehouse): $200

At a retail price of $19.99, your gross margin would be approximately 73% — healthy for a direct-to-consumer or Amazon FBA model.

Tips for Price Negotiation

1. Don’t negotiate on the first inquiry — Build rapport first. Ask about factory capacity, lead times, and product details before discussing price.
2. Use volume as leverage — If you plan to reorder, mention your annual purchase projection. Factories discount for repeat business.
3. Compare 3 suppliers — Get quotes from at least 3 factories for the same product. This gives you a realistic price benchmark.
4. Ask what’s included — “Is this price FOB Yiwu or FOB Ningbo? Does it include inner box? What about barcode labeling?” These details affect true cost.
5. Don’t push too hard — Yiwu margins are already thin. If you push below a reasonable price, the factory will cut corners on material quality to compensate.

Next Steps

• Read our shipping and logistics guide to understand freight options
• Read our customization guide for logo and packaging options
• Contact us for a quotation on specific SKUs