Why Do Companies Have A Minimum Order Quantity (MOQ)?

Emma Hewitt
July 6, 2023
A stack of screen printed t-shirts sitting on a table

There are a lot of different reasons that companies in all industries could have a minimum order quantity, or MOQ, but we’d like to explain a bit more about why Extreme Screen Prints® has implemented our policy, how it pertains to our industry, and why it may increase with certain types of prints.

Efficiency

One of the main reasons we have an MOQ policy is to make sure that our production setup is efficient. Setting up our presses for each design requires significant effort, regardless of the order quantity. From producing screens to locking them in and aligning artwork to programming the machine to test printing, the process remains the same regardless of the number of pieces being printed. By establishing our minimum order quantity, we optimize our process, resources, and labor.

Valuing Our Employees

Secondly, we truly value our employees and their time, and we strive to provide competitive wages for our industry. In such labor-intensive environments like screen printing, it is crucial to balance the cost of production with fair compensation for our team. Think about it this way: If a company were to accept a bunch of small orders with quantities as low as 10 or 20 pieces, the setup effort for each of these orders would remain similar to those of a larger order. In this scenario, the costs of setting up multiple small orders would outweigh the profits, making it financially unsustainable, and supporting our employees’ labor becomes challenging. Having an MOQ ensures that our team’s dedication and expertise are adequately valued.

Staying Competitive

Transparently, from a business perspective, an MOQ just makes economic sense. It allows us to maintain competitive pricing while covering our costs associated with production, materials, and overhead expenses. A higher MOQ ensures a reasonable profit margin, making it possible for the company to invest in more and newer equipment, employee training, and expanding the scope of what we offer, further enhancing the overall customer experience.

In some cases, the MOQ may increase due to the complexity of the artwork. We specialize in simulated process and photorealistic prints, and we spend time ensuring that our output meets our standards. Often, this requires troubleshooting on press which takes time, labor, and skill. Raising the MOQ to 100+ pieces in these cases gives us the ability to cover that extra time, labor, and skill that these detailed prints require.

Hopefully this helps you understand what goes into the decision of settling on an MOQ and why we at Extreme® have decided it’s in our best interest.

Emma Hewitt
Updated:
July 6, 2023