Welcome to Day 4 of the Get Set for Manufacturing Challenge!
Day 4 – How many do you want to make?
We’re more than half way through the challenge now – how are you getting on?
By now you should have a clear idea of the product that you want to make, the materials that you want to use, and the cost price that you’re aiming for.
And today I’m going to fit one more piece into the puzzle, and that’s minimum order quantities – or MOQs as they’re often known.
A minimum order quantity is the lowest amount that a manufacturer is able to make of a certain product.
A manufacturer is not setting an MOQ just to be difficult, and to keep the small businesses out, despite what it might feel like sometimes!
Instead, the manufacturer generally sets their MOQ based on how many of a production run they need to make in order for it to be viable for them.
MOQs can vary from manufacturer to manufacturer – and there is always a way to negotiate them. Listen to the podcast if you want to find out how.
So here’s today’s part of the challenge…
Take your product list from day 1 and decide how many of each product you want to make.
A manufacturer’s MOQ will generally be across several sizes, and possibly several colours of one style.
Once you’ve decided how many you might want to make of each style times that number by the target cost price that you decided on yesterday.
Do this for every product you have on your list then total them all up.
Does this amount look like the sort of investment you were planning to make on stock?
Remember, this is just your target cost price for production. It doesn’t include sampling, postage, delivery or marketing.
It’s at this point you might want to consider whether the amount of items you put on your list on day 1 was maybe a little too ambitious.
It’s wise to start with as little investment in stock as you can, especially if you haven’t had a chance to test the market with your idea. This is why when you approach a manufacturer and you have a huge long list of different products you want to make they will know it’s unrealistic if you only have a small budget.
So stay focused to start with and a manufacturer is going to be more likely to be able to help you with the MOQs a little.
You might also want to read this article about how much it costs to launch a new brand – the findings might surprise you.
Listen to this episode of the Make it British Podcast for further advice about minimum order quantities.
By the end of today’s task you should have a good idea of the amount of each item you want to order.
Tomorrow: we’ll be looking at how to present everything to the manufacturer.
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