Re: Small quantities for small business?
Posted 31 Jan 2012 12:11
This is often the struggle with sourcing overseas. How to find the balance between unit price and MOQ. MOQ exist because it is often the breaking point to a factory, does it make sense financially to take your business. In printing industry, MOQ is high because the fixed cost associated with setting up the plate, fine tuning printing machine such that the colors turn out is accurate and etc and after all that, the first sheet (canvas) that comes out of the offset printer cost them x amount of dollars.
To produce anything lower than the set MOQ would either mean higher unit cost or the factory will absorb the difference. Either way, one party loses (your or the factory). MOQ often is not artificially set to filter out the small business owners, it's pure economic calculation. It is also in your own interest to take MOQ into consideration because the unit price for 100 canvas could be 10 times higher than the unit price for 1000 canvas.
Also, another factor to consider is international shipping. It can be costly and a lot of headache if you don't have the right importing agent. Not knowing the qty you are interested in importing, I cannot give you a ballpark shipping cost but consider the minimum for ocean shipping could cost you $500-$1000. Divide that by the # of canvas you are importing, it may aise your cost substantially, deeming the product unfit to be imported at this stage. not to mention the hassle you'll have dealing with customs, delivery and etc...
All in all, if you are at the beginning stage of your business, try and get these made stateside and when you get a larger order, do similar analysis to see if it makes sense to import from overseas.