MOQ Meaning

MOQ (Minimum Order Quantity) is the floor below which a brand, distributor, or warehouse will not process an order. MOQs exist because every order carries fixed costs, picking, packing, invoicing, delivery, and below a certain volume these costs exceed the margin earned. In Indian FMCG distribution, MOQs are set at multiple levels: the brand sets an MOQ for primary sales to distributors (often a full pallet or 50-100 cases), and the distributor sets an MOQ for secondary sales to retailers (often 1-5 cases or a minimum invoice value of Rs 500-2,000).

MOQ design involves real trade-offs. Set it too high and small kirana stores cannot afford to order, shrinking your retail coverage. Set it too low and the distributor loses money on every small delivery because the logistics cost per case exceeds the margin. For dairy products with daily delivery cycles, some brands waive MOQ entirely for existing outlets and instead set a minimum billing value per route to ensure delivery runs are economic.

In practice, MOQ enforcement is where manual operations break down. A sympathetic DSR will book a 2-case order for a struggling retailer even though the MOQ is 5 cases, leading to unprofitable deliveries. A digital order management system enforces MOQs automatically at order entry, with configurable overrides requiring supervisor approval, so exceptions are tracked rather than invisible.

MOQs also interact with trade schemes: a bulk-pack scheme with slabs starting at 100 cases implicitly raises the effective MOQ for that scheme benefit. Smart scheme engines display the gap between the current order quantity and the next slab threshold, nudging the retailer upward without forcing impractical volumes.