In the world of the silicone products manufacturing industry, you may have previously come across the term ‘MOQ’. What does it stand for? It’s the abbreviation for ‘Minimum Order Quantity’. MOQ is the minimum quantity you must order from an OEM/ODM factory. Simply, you surely can order more, but you cannot order less than this amount. This may feel like a constraint from a Brand or business’s perspective. However, there are some strong underlying reasons in risk management, efficiency, and cost structure. Today, we will explain MOQ in detail and why custom silicone products have a Minimum Order Quantity.

Root Causes of MOQ

1. Raw Material Costs

One of the main reasons for MOQ is the cost of raw materials. The way the suppliers manage procurement and inventory plays a big part in the cause of the MOQ. Here’s the cost for raw materials needed in the custom silicone product manufacturing industry:

· High-quality Platinum-cured, food-safe, or medical-grade raw silicone rubber costs in the range of $3-$6 per kilogram. The exact price depends on the grade and application. 

· The raw material for general-purpose silicone costs a little less. It’s about $2-$3 per kilogram. The lower the raw silicone is ordered, the higher the unit price increases.

· Besides raw Silicone, the manufacturing companies also need other raw materials to give the product properties like color, heat resistance, collapsibility, and other mechanical characteristics. These material increases the silicone price by $1-$2 per kilogram. 

2. Production Costs

Besides the raw material cost, production also has a fixed and variable cost that influences the MOQ. If the order is too small, the production costs scale poorly, leading to a big loss for any manufacturer. 

· Tooling cost

Tools or molds are essential in custom silicone products. These tools are quite expensive. For example, a custom injection mold for Silicone products may cost between $500-$1000, depending on the size and complexity.

Now, let’s say you order 100 pieces of a custom silicone bottle. Then the cost of the products will be way less than the factory’s cost of the tool itself. That’s why having an MOQ is important for any OEM/ODM factory.

· Machine time

Whether it’s a big order or a small order, either way, manufacturers need to set up their machines, plan machine time, testing, changeover, etc. All of these require operator labor. That's why for small volume orders, the operator labor cost automatically becomes higher. 

· Quality control

For silicone products, especially food-grade silicone products like kitchenware, pet items, baby products, or food contact items, Quality control and certification are crucial. Testing from regulatory organizations to get FDA, LFGB, CE, ISO, and Sedex compliance is very expensive. For small orders, each unit product has to bear a higher cost to cover this expense. 

3. Supply Chain Constraints

Manufacturers and their suppliers work in situations where logistics, procurement, and storage matter:

· Storing large quantities of raw material with a specific shelf life is a risk. A small production run for a small order causes higher overhead.

· Many raw materials in the silicone manufacturing industry are sold in a specific minimum lot, such as 200kg. These raw materials must be used in production so as not to go to waste before the shelf life expires. 

· For supplying to an international brand, the manufacturers need to follow the minimum freight requirements, shipping fees, and other customs rules. For small orders, this cost gets too high. So factories fix a specific MOQ for risk mitigation and logistic efficiency.

4. Profitability Requirements

Besides the raw materials, factories have some fixed overheads such as labor, utilities, maintenance, etc. These costs need to be spread over sufficient units so that the cost per unit doesn’t get unreasonably big.

In case of small orders, if the factories keep the cost per unit reasonable, it leaves a very low margin, or it's lost entirely. That’s a reason for silicone manufacturing industries to have a minimum order quantity or MOQ, to have a sufficient profit margin, ensuring reasonable costs per unit for the brands. 

5. Custom Manufacturing Process Demands

Custom silicone product manufacturing involves extra costs in advanced-level designing, 3D prototyping, mold making, etc. To spread over these extra costs, a silicone products manufacturer needs to produce a certain minimum amount at one go. 

· Custom product design

Custom silicone products may sound easy, but a manufacturer has to process multiple steps before full production. They need CAD drawings, prototypes, testing, sample production, and approvals. All these steps take a lot of time and cost a lot as well for the labor and machinery. 

· Various colors, shapes, textures

In custom silicone products, custom requirements such as color, texture, shape, etc, require some additional steps than regular silicone products. This increases the cost per unit for the manufacturers.

· Multiple cavities

For custom products, the factory often designs tools or molds to manufacture a lot of products and parts at once to cut the cost per unit. This molds design and production costs the manufacturer time and money.

In small orders, the molds cannot be efficiently used as a big portion of the cavities may be empty. So to ensure the efficient use of these tools, silicone product manufacturers set an MOQ.

Strategies to Mitigate MOQ Impact

MOQ is an important risk mitigation and efficient production strategy for a custom silicone product manufacturer. However, we understand, MOQ may feel a boundary or constraint for many brands, businesses, or importers. So here are some ways to make silicone product sourcing more flexible:

· Seek Factories with Lower MOQ Thresholds

There are some factories that specialize in small-batch production. They are willing to offer a smaller MOQ at a slightly higher price. You can contact them and ask for their ‘small batch’ service, where you can order maybe 500 units instead of 5000 units, unlike big manufacturing companies.

This is a good way to partner with a flexible small manufacturer if your brand is still in the early stage or you have a lower capital for investing in silicone products. 

· Utilize Standard/Off-the-Shelf Components 

Customization from scratch is the main driver of the MOQ as it requires everything to be made from the beginning. From designs, testing, sample approval, new and complex mold production, standard silicone custom color matching, etc, costs your custom silicone products factories a lot of money and manpower.

So to minimize the MOQ, instead of starting everything from scratch, utilize the manufacturer’s standard or off-the-shelf components. You can choose from the factory’s pre-existing molds.

Use the standard hardness, texture, or shape for your products offered by the manufacturer. For the custom color, try to minimize the color variants so your products can avoid additional tool changes that may raise the MOQ. 

· Consolidate Orders

You can reach the MOQ threshold faster by combining multiple product SKUs in one mold run. In case of, same mold dimension, material like silicone, and tooling setup, you can request the manufacturer to produce multiple order products in a single lot. 

Another way to reach the MOQ threshold faster is by pooling orders with other companies. You can look for other similar silicone product brands that need a supplier for the same product as you. You can collaborate with companies like that and place an order together. That way, your combined order will match the MOQ, and after production, you can share the products with each other accordingly. 

· Split the Production Process 

To negotiate the MOQ with a high-volume silicone product factory, you can split the production process across multiple lower-cost factories.

For example, you can order for custom design or, prototype at a lower cost from a company. Then order silicone product moldings in a smaller amount from a factory. After your own molds are ready, negotiate with a high-quality silicone product to lower the MOQ, as they will no longer need to produce their own molds.

And you can also make a second factory handle the finishing and packaging to negotiate the MOQ more with the product manufacturing company.

· Partner with a More Experienced Sourcing Agent

Working with a more experienced sourcing agent like KEAN will grant you access to more methods and overcome information gaps behind the MOQ. 

1. They have a large factory network and can help you identify manufacturers offering lower MOQ.

2. They understand the reasons behind MOQ and can help optimize the process to reduce it. 

3. They can bring light into the reasoning of MOQ, enabling you to ask the right questions to the manufacturers, get you the proper answers, and push for better terms. 

Common Misconception About MOQ

Small orders mean low cost, large orders mean high cost, right? Wrong! This is a common misconception. In fact, the opposite is true. Small orders may need less payment, but compared to the large orders, the per-unit cost is larger, which is a disadvantage for any brand.

Here’s a very simple example: let’s say you order 10-unit silicone toys at $10 from a factory. Then you order 100unit silicone toys at $80 from that same company. $10 is surely very less than $80, so you can surely say that fewer toys cost less. But with fewer toys, your cost per unit is $1, whereas for more toys, your cost per unit is $0.8. 

So MOQ or minimum order quantity is not there to increase your cost, but to give you a better deal at a lower cost per unit while ensuring risk management and efficient production by the manufacturer. 

KEAN's MOQ Policy 

At KEAN, we understand many of our brand clients, business owners, and importers are looking to test new products, experiment with the market, or launch products for niche customers in small volumes. So KEAN’s MOQ policy is designed to be 

· Transparent & Reasonable

We clearly state our MOQ threshold for each product on the product page, and unlike many others, we don’t have any hidden fees. We supply high-quality products with fairness, despite the brand size.

· Small-batch Friendly

We support clients starting from small-batch trial production. Small businesses doubting our production quality before meeting our MOQ threshold can request free samples to check first.

· Design and Cost Advice Inclusive

 KEAN offers advice on modular design, standard color selection, etc., considering all-around needs. We will advise on the most suitable solution for your MOQ burden.

· One-Stop Service

They will handle everything with experts at different stages. You no longer need to invest your time once you finish ordering. Besides, you can also save your sweat in getting the product certification. KEAN can be your one-stop service from designing to shipping.