Wholesale minimum order (MOQ): setting it at the right level and enforcing it

“What’s your minimum?” A buyer discovering a brand at a trade show often asks this before even touching the samples. The answer shapes part of the season. Set too high, the minimum shuts out the small boutiques that build a designer brand’s reputation. Set too low, or poorly enforced, it fills the order book with small orders that cost more than they bring in. The task is to set it, present it and enforce it without losing customers.

What is a minimum order (MOQ)?

The minimum order, often called the MOQ (Minimum Order Quantity), is the threshold below which the brand will not accept an order. It is expressed as a value (for example €500 excl. VAT) or as a number of units (for example 12 pieces), sometimes both.

Do not confuse it with the production minimum the factory imposes on the brand. The subject is related, but it is negotiated at the other end of the supply chain, between the brand and its manufacturer. The related terms are defined in our wholesale glossary.

Why a brand sets a minimum

A minimum meets four distinct needs, which weigh more or less heavily depending on the size of the brand and the nature of the collection:

• To cover the fixed cost of an order: entry, approval, picking, packing, unrecharged shipping, invoicing, payment chasing.
• To guarantee a genuine presence in store: two pieces lost on a rail will not sell and give the brand a weak image.
• To secure production: the combined quantities across orders must reach the factory’s minimums.
• To focus sales effort on the customers who carry the collection.

A minimum in euros protects margin, a minimum in units protects in-store presence

Combining the two rules, for example €500 excl. VAT and at least 12 pieces, covers both risks. A store can no longer reach the threshold with three coats, nor with twelve cheap small accessories. Yet the rule must still be simple enough to explain in one sentence, the one your sales rep says on the stand.

How to calculate your wholesale minimum order

Start from the real cost of an order, not from a figure you heard from another brand. Add up the time spent entering and approving it, picking and packing, the shipping you do not recharge, invoicing and payment follow-up. Then decide what share of your margin this fixed cost can reasonably absorb.

• Minimum = fixed cost of an order ÷ (gross margin rate × share of margin that cost may absorb).
• Example: an order costs €60 to process, gross margin is 50% of the wholesale price, and you accept that this cost absorbs at most 20% of the margin: 60 ÷ (0.50 × 0.20) = €600 excl. VAT.
• Check: an order of €600 generates €300 of gross margin; the €60 of handling is indeed 20% of it.

The same calculation shows what a threshold set too low costs you. With a €500 excl. VAT minimum and the same 50% margin, an order at the threshold generates €250 of gross margin, of which the €60 of handling absorbs 24%.

Then check that the resulting threshold matches a realistic selection for a boutique: two or three styles, in two colourways, across a full size run. If the threshold demands more, it will rule out small stores. Size breakdowns are covered in our guide to size curves and prepacks. The margin itself depends on your wholesale price: see how to calculate your wholesale price.

Should you have one minimum or several?

A single minimum is simple, but rarely fair. Brands that refine it most often adjust four parameters:

• Opening order and reorder: opening an account costs more than a reorder, which can have a lower threshold (see selling reorders during the season).
• Product category: a minimum in units does not mean the same thing for coats as it does for jewellery.
• Store: a retailer with several shops can have a minimum per door rather than an overall one.
• Country: shipping and paperwork weigh more heavily for export, which often justifies a higher threshold (see export wholesale).

Minimum order and free shipping threshold: a barrier and an incentive

The minimum is a barrier: below the threshold, there is no order. The free shipping threshold is an incentive: above a certain value, the brand pays for delivery. Many brands set a modest minimum to stay accessible and a higher free shipping threshold to encourage larger orders.

Both thresholds should appear in the same place, with the same figures. A buyer who reads one free shipping threshold on the line sheet and another in the terms and conditions will mainly remember the inconsistency.

Show the minimum before signature

A minimum discovered at checkout, or worse after signature, costs you twice: the order, and the buyer’s trust. Show it on the line sheet, in your terms and conditions of sale and, above all, while the order is being entered, with what remains to be reached and in which unit.

In France, a brand that has drawn up general terms and conditions of sale must in fact provide them to any trade buyer who requests them (French Commercial Code, art. L441-1). They are the reference document in which to state your minimum, alongside your deposit and payment terms.

When to accept an order below the minimum

A boutique with strong potential, a first test in a new country, a long-standing customer going through a difficult season: an exception can be justified. It must remain a decision, and never become an oversight. Define who can grant it, ask for a reason and keep a record of it. Next season, you will know why this customer ordered below the threshold and whether the bet paid off.

Five mistakes that weaken a minimum

1. Setting the minimum by copying others, without knowing the real cost of an order.
2. Showing one minimum in your documents and applying another in the ordering tool.
3. Only checking the minimum after the customer has signed.
4. Granting verbal exceptions that nobody can trace afterwards.
5. Applying the same threshold to an opening order, a reorder and an export order.

The order to follow before your next selling season

First, cost out the handling of an order, line by line, and derive the threshold from the formula. Then test it against a typical small-boutique selection, and adapt it for reorders, export and the categories that need it. Finally, put the same figure on the line sheet, in the terms and conditions and in the ordering tool, and name the person who can grant an exception.