Setting and Analysing Minimum Order Quantities

Minimum Order Quantities (MOQs) or Minimum Order Values (MOVs) set a floor on how small a wholesale order can be. They exist to ensure that the cost of processing, picking, packing, and delivering an order is covered by the margin earned from it.

A wholesale order of £80 with a 25% margin generates £20 gross profit. If the cost to process and fulfil that order is £22 (warehouse time, packaging, shipping), the order is unprofitable — you would be better off not taking it. An MOQ of £150 ensures every order at least covers its own fulfilment cost.

Your break-even order value is the minimum order that generates enough gross profit to cover your average per-order fulfilment cost.

Break-even MOV = Average fulfilment cost per order ÷ Gross margin %

Example:

• Average fulfilment cost per B2B order (warehouse labour + packaging + delivery): £35
• Gross margin on wholesale orders: 28%
• Break-even MOV = £35 ÷ 0.28 = £125

Any wholesale order below £125 loses money at the gross margin level. Setting your MOV at £150–£175 provides a small buffer above break-even.

Go to Finance → Pricing Analysis → MOV Calculator in AskBiz to run this calculation with your actual figures.

Before setting or changing your MOQ, understand your current order size distribution:

Go to Customers → Trade Accounts → Order Size Distribution to see a histogram of all B2B order values over the last 12 months.

Key questions:

• What % of B2B orders currently fall below your proposed MOQ? If 40% of orders are below your proposed floor, implementing the MOQ will affect 40% of your orders — a significant change that needs careful communication.
• Which accounts place the most sub-MOQ orders? Focus your initial conversation on the accounts most affected.
• Has average order size been growing or shrinking? A shrinking average may indicate that customers are splitting orders — a sign they are testing a lower commitment before buying more.

Introducing or raising an MOQ requires careful account communication:

1. Identify affected accounts: AskBiz lists all accounts whose average order value is below your proposed MOQ

2. Segment by value: separate high-value accounts (worth protecting) from low-value accounts (where the MOQ is most important to enforce)

3. Give notice: communicate the change 60 days in advance, in writing

4. Offer a transition period: allow 90 days at the old terms for existing accounts as goodwill

5. Apply strictly to new accounts: enforce the new MOQ immediately for any new wholesale accounts

Track the impact after implementation in AskBiz: go to Finance → Revenue → B2B Order Size Trend to see whether average order values increase post-implementation (success) or whether order volumes decline (some accounts churning).