Inventory planning
Minimum Order Quantity (MOQ)
By the Supply Chain Manager team · Updated October 16, 2026
Minimum order quantity (MOQ) is the smallest quantity a supplier will accept on a single order line, set in units, cases or order value.
Suppliers set MOQs to cover their own setup, picking and shipping costs. For the buyer, an MOQ larger than what you need forces a choice: order more than needed, combine the item with other orders, or find another source.
How to calculate MOQ
Order Quantity = max(Calculated Need, MOQ), rounded up to the case or pack size
MOQ example
Illustrative numbers: you need 120 units of a slow seller to cover the next two months, but the supplier's MOQ is 500. Ordering 500 means about eight months of stock. At a carrying cost of 25% of value a year, that extra stock has a real cost you can compare against paying a small-order surcharge or switching supplier.
Why MOQ matters for distributors
MOQs are a common hidden source of slow-moving stock. Knowing which SKUs are MOQ-bound helps you negotiate lower minimums, consolidate orders or move the item to a distributor or wholesaler that sells smaller quantities.
Common MOQ mistakes
- Letting the MOQ silently become the reorder quantity for every order.
- Never renegotiating MOQs as your volumes change.
- Confusing a value-based minimum (for example a minimum spend per order) with a per-SKU MOQ.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.