Inventory how-to

How to work with suppliers that require minimum order quantities

Build the minimum order quantity (MOQ) into your reorder math instead of treating it as a surprise at checkout.

Short answer: Build the minimum order quantity (MOQ) into your reorder math instead of treating it as a surprise at checkout. Order up to the MOQ or to a case-pack multiple of it, and spread the extra stock across your forecast period instead of letting it sit as dead weight.

Why MOQs break simple reorder math

A basic reorder formula tells you to order what you need to cover demand until the next delivery. An MOQ overrides that. If the supplier needs 200 units per order and your calculated need is 60, you either order 200 or you don't order at all. Treat the MOQ as a floor, not a suggestion.

Fold the MOQ into your order point

When you calculate your reorder point (daily sales x (lead time + safety days)), use it to decide when to order, not how much. The quantity should be the larger of your calculated order quantity or the supplier's MOQ, rounded up to the nearest case pack if they also require that.

Spread the cost of overordering

An MOQ often means you get more stock than your 28-day sales window needs. Work out how many days of cover that MOQ actually buys you, so you know not to reorder too soon and double up on inventory. If a MOQ buys you 90 days of stock, don't order again at day 40 just because another SKU in the same order is low.

Negotiate or consolidate when MOQs are too high

If a supplier's MOQ is far above what you can sell in a reasonable time, consider combining it with another SKU from the same supplier into one order, or ask if they'll split a case pack. If neither works, it may be cheaper to find a supplier with a lower MOQ even at a slightly higher unit cost.

Step by step

  1. List every supplier's MOQ and case pack size next to each SKU.
  2. Calculate your normal order quantity using daily sales x (lead time + days of cover) minus stock on hand and on order.
  3. Compare that number to the MOQ. If your number is lower, order the MOQ amount instead.
  4. Round the final quantity up to the nearest case pack if the supplier requires one.
  5. Work out how many days of stock the MOQ quantity covers, so you don't reorder too early.
  6. Flag any SKU where the MOQ covers more than 3-4 months of sales. These are candidates for renegotiation or a different supplier.
  7. Review MOQ decisions every quarter, since sales speed changes and an MOQ that made sense before may now be too much or too little.

Worked example

Say you sell a candle at 2 units a day, lead time is 10 days, and you keep 5 days of safety stock. Your reorder point is 2 x (10 + 5) = 30 units. Your order quantity to cover 30 days would normally be 2 x (10 + 30) minus what you have on hand, say 2 x 40 - 20 = 60 units. If the supplier's MOQ is 150 units, you order 150 instead of 60, and that 150 units covers 75 days of sales at 2 units a day, so you know not to reorder again until stock drops closer to your 30-unit reorder point within that window.

How SteadyShelf helps

SteadyShelf lets you set a minimum order quantity and case pack size per supplier, and it rounds suggested order quantities up to meet both automatically when it drafts a purchase order. It does not negotiate MOQs or suggest alternate suppliers, so deciding whether an MOQ is worth accepting is still a manual judgment call on your side.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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FAQ

What if different SKUs from the same supplier have different MOQs?

Set the MOQ per SKU, not per supplier, since it usually applies at the product or case-pack level. Each SKU's order quantity gets rounded up to its own MOQ before the order is combined and sent to the supplier.

Should I lower my safety stock to offset the extra inventory from a high MOQ?

You can, since the MOQ itself is already giving you a buffer of stock. Lowering safety days slightly for that SKU avoids stacking an MOQ-driven surplus on top of a safety-stock surplus.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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