MOQ, or minimum order quantity, is the smallest quantity a supplier will sell you in one order. If a distributor says the MOQ is 50 cartons, an order for 30 cartons is refused, or accepted only at a higher price. For a shop owner, an MOQ decides two things before the first sale: how much cash goes into stock, and how long that stock sits on the shelf.
What MOQ means
A supplier sets an MOQ because a very small order can cost it more to pack, ship and invoice than it earns. A manufacturer may also produce in fixed batches. The MOQ is the supplier's floor, and it is often open to negotiation, for example a lower MOQ at a higher unit price.
You will see the same idea written in several ways: MOQ, minimum order quantity, minimum quantity order and order minimums. They all mean the smallest order the seller accepts. The difference that matters is the unit:
| Term | Counted in | Set by | Example |
|---|---|---|---|
| MOQ (minimum order quantity) | Units, cartons, metres, kilos | The seller, usually a supplier | At least 50 cartons per order |
| Minimum order value | Money | The seller, often a shop that delivers | At least Rs 200 per basket |
The formula
Three lines are enough to see what an MOQ means for your shop.
- Cash tied up = MOQ x unit cost
- Days of stock = MOQ / units sold per day
- Units at risk = MOQ - (units sold per day x shelf life in days)
If the last line is zero or less, the stock should sell before it expires.
Worked example
The figures below are an example, not data from any shop. The arithmetic is ours.
Example: a shop is offered a packaged snack by a new distributor. The MOQ is 50 cartons. Each carton costs Rs 600. The shop expects to sell 2 cartons a day. The product has a shelf life of 20 days from delivery.
- Cash tied up: 50 x 600 = Rs 30,000, paid before a single carton sells.
- Days of stock: 50 / 2 = 25 days.
- Units at risk: the shop can sell 2 x 20 = 40 cartons before the product expires. 50 - 40 = 10 cartons, which is 10 x 600 = Rs 6,000 of stock that may not sell in time.
Compare that with what the shop would order with no MOQ. Ten days of stock is 2 x 10 = 20 cartons, or Rs 12,000. The MOQ adds 30 cartons, or Rs 18,000, of cash sitting on the shelf for longer.
With these three numbers, the shop knows what to ask the distributor for: a lower MOQ, a longer shelf life on delivery, a split delivery, or a better price that pays for the risk.
MOQ on the other side: the minimum order for your own delivery
When you sell, you set a minimum of your own. For a shop that delivers, it is usually a minimum order value, so that a small basket does not cost more to deliver than it earns.
- Smallest basket that pays for its delivery = delivery cost per order / gross margin
Example: delivery costs the shop Rs 40 per order and the gross margin on a basket is 20 percent. 40 / 0.20 = Rs 200. Below a Rs 200 basket, that order loses money on delivery. Our free delivery cost per order calculator works this out from your own rider, fuel and packing costs, and our grocery store website and app guide shows the ways to set the charge.
What we do not know, and what varies by business
- Your supplier's MOQ and whether it can move. It depends on the supplier, the product and how much you already buy from them.
- Your real daily sales. A new product has no history. The example uses a guess of 2 cartons a day; a slower week changes every line.
- Shelf life on arrival. A product with 20 days left is different from one with 90 days left. Ask what you will receive.
- Your margin and delivery cost. The Rs 40 and 20 percent above are example figures. Use your own.
Where Ordrio fits
Ordrio does not set or check supplier MOQs. Two parts of it touch the numbers in this article:
- Buying stock: Bills & Books keeps suppliers, purchase orders and purchase records, with real-time stock and low-stock alerts, so you can see how fast a product sells before you reorder.
- Selling online: the Online store is your own website and app. A minimum order value is available from the Grow plan. See pricing. For wholesale, Whola sets volume pricing, with a discount once an order passes a quantity you choose.
Related reading: what goes on a purchase order and how it differs from an invoice, and what a backorder is and what the customer sees.
You start on the free plan. Any paid plan costs Rs 1 for the first 30 days.
Sources
- The definitions and formulas are standard trade usage, written in our own words.
- All figures in the worked examples are example figures. The arithmetic is ours and can be repeated with a calculator.
- Plan and product details: ordrio.com pages for Bills & Books, the Online store, pricing and Whola, read on 5 November 2026.
Ordrio: Sell. Run. Deliver. Online store, app, billing and delivery for shops and restaurants.