What is an MOQ and How Does It Affect My Product Pricing?

https://www.youtube.com/watch?v=wdxicTeDr6M

Show Summary

Is there a database of manufacturers that you would recommend?

Paid databases like Thomasnet.com and Keychain.com exist and are generally free to use for a consumer. While basic access and standard listings are free, Thomasnet.com offers paid premium subscriptions for suppliers. Premium accounts allow businesses to list themselves in multiple product categories and gain higher placement in search results to attract more buyers. Keychain is designed as a free search and discovery platform for brands looking to find CPG (consumer packaged goods) manufacturing partners, but Suppliers face large subscription costs to be listed and to contact brands. A more effective (and free) approach is a targeted Google search — manufacturers who invest in quality content tend to rank higher and tend to be more established. AI tools can also help compile a shortlist quickly.

What is an MOQ?

An MOQ (minimum order quantity) is the smallest batch size a manufacturer is willing to produce. It's distinct from a minimum order value — most manufacturers today are unit-driven rather than dollar-driven, though they'll often quote a lower unit count if the brand is comfortable paying a higher per-unit price.

Why do MOQs exist?

Manufacturing has largely fixed costs per production run — room cleaning, sanitation, blending, encapsulation — that don't change based on order size. Spreading those fixed costs over more units drives the per-bottle price down, which is why larger orders are cheaper per unit. MOQs also stem from raw material supplier minimums: if a manufacturer doesn't normally stock an ingredient, they may need to buy more of it than your batch requires, and you often absorb that excess cost.

What is tiered pricing and how does it work?

The more you order, the lower your per-unit cost. It's worth asking a manufacturer for pricing at future volume tiers (e.g., 5,000, 10,000, 25,000 units) even if you're not ordering that much yet, so you can plan toward profitability.

Can MOQs flex?

Yes, especially for simpler formulas — fewer ingredients mean lower testing and blending costs, making smaller batches more feasible. Complex, multi-ingredient formulas raise both testing costs and the effective MOQ. Brands that show up prepared (with branding, formulas, and clear thinking already in place) are more likely to get flexibility from a manufacturer.

Startup-specific risks

New brands lack sales history, so every order size is a gamble compared to an established brand with a predictable ordering cadence.

Test batches

Two types exist: small-scale kitchen testing (using individually purchased ingredients to gauge formulation/dosing, not intended for market) versus a manufacturer test batch meant for actual customer feedback. Testing cheaply at home first — using trusted single-ingredient products — is a low-risk way to validate an idea before committing to production.

Risks of chasing the lowest MOQ

Low-MOQ manufacturers aren't necessarily bad, but GMP-certified facilities (third-party audited) offer more assurance than merely GMP-compliant ones (self-reported). A real example was shared where a brand later discovered their "low MOQ" manufacturer had delivered a lower-potency ingredient form than expected, due to unclear communication about specifications.

Private label as an alternative

Private label products offer a cheaper, faster way to enter a category without committing to a custom formula, though the product won't be unique to the brand. It can serve as a stepping stone toward a custom formula once the brand has traction.

Closing advice

Brands should get clear on why they've settled on a particular MOQ (confidence, budget, or otherwise), plan for product expiration/shelf-life risk, and consider giving away a portion of early inventory to build trust and reorders. Being transparent with manufacturers about budget and timeline — rather than "gaming" the quoting process — was framed as beneficial for both sides.

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Full Show Transcription

MARK: Welcome to the Unbottled Podcast, the show where each week we go behind the label of dietary supplement manufacturing. I'm your host, Mark Bryant the Giant. Behind the scenes, we've got Stephanie and Danny.

Today we're going to talk about the… let me try that again. Take three. Today we're going to talk about: what is an MOQ, and how does it affect my product pricing?

DANNY: But before we get started, Mark, we do have a question from a viewer. Is there a database of manufacturers that you would recommend?

MARK: A database? Um, there are, but you have to kind of pay to play on some of those — so like Thomasnet or Keychain. They have manufacturers, but you typically have to pay a registration fee or something to have access to those.

The best way really is Google. Typically the ones that you're going to find on the first page are ones that have invested time and effort into providing good quality content to get them to that page one on Google. If they're putting content out, that's probably a good sign that they're a pretty solid manufacturer. So to me, that's a cheap and easy way of being able to find one — but be very specific in your search.

You can also, with AI nowadays — ChatGPT, Claude, all those guys — you can be very specific in there and they'll print up a list really nicely. So the answer is: yes, and maybe.

DANNY: If you're just starting your supplement brand, you will realize rather quickly that a supplement manufacturer is very interested in your target MOQ.

But what is an MOQ? What does MOQ mean, and why is it so important? The MOQ number is often the single biggest factor in whether a brand can even afford to launch. So Mark, what is an MOQ?

MARK: Okay, an MOQ is the minimum order quantity that a manufacturer is typically willing to run on a certain product. So it's the smallest batch size that they're willing to do.

DANNY: What is the difference between a minimum order quantity — an MOQ — and a minimum order value? And do contract supplement manufacturers take both of those into consideration?

MARK: I think so. I mean, there is a difference. I think it used to be that manufacturers would kind of play both sides of that fence, a lot of them, but now I think it's more unit-driven — here's the price. We tell people all the time: we will go lower than what our normal MOQ is. You just may not like the price.

There's so many fixed costs in manufacturing. Those don't change, right? To clean a room is the same labor cost, and all the things you have to use to sanitize and do every room. And at every phase of manufacturing there's an opportunity to clean a room. So you weigh it out — that's one room — and then you've got to sanitize and clean the entire room to avoid cross-contamination. Then it goes into blending, and you've got to blend that, and then you've got to tear it all down and clean it, and then you've got to go into encapsulation, then you've got to do that. Every phase has that. And those numbers don't change. It costs the same almost for every single room to do all the things — the labor costs, all those are the same.

So say, at cost — I'm making up a number here — say it costs $1,000 in labor to go through all the phases of cleaning. Well, if you only order 1,000 bottles, then that's a dollar a bottle for cleaning. But if you order 5,000 bottles, now it's 20 cents. So you just, by increasing the number of units, you've decreased the per-unit cost, because that fixed number stays the same and that's how we divide it up.

If I'm going to answer the other part of your question — the value — we tell people we'll quote them less, they just may not like the price. And as long as they're comfortable knowing that, then yeah, you don't have to get 5,000 units or whatever that number is. You can just get 500 units. Then it's like, now we're dividing that $1,000 across 500 — so now it's $2 a bottle for those cleaning costs, you know? So it just depends on what their comfort level is. If you're budget shopping, that may be fine. You may be okay knowing that on the first order, I just want 500 units, and I'm going to be okay with that, even if I'm losing money every time — I'm just trying to test the market.

Like, if somebody came to you and said, "I've got $5,000, how many units can I get?" — they need to make this much, so they reverse-engineer how they price their product. They're going into a formula and they say the market shows I can charge like $30 a bottle and that's going to be a good price. And then they're like, I know I need to make this much, and I know it's going to cost this much to advertise, and then they come back to you and say, "I can spend $3 a bottle."

DANNY: I would love it if people came to us and said, "My budget is $5,000, can you make my product?" We can take that, look at their formula, and say, "No way" — because the cost of your ingredients alone is going to be prohibitive here.

What can you tell us about why there is a minimum order quantity that a supplement manufacturer will set?

MARK: There's so many reasons to take into consideration here. It's really kind of a tricky question because it depends. A lot of manufacturers keep what I'll just call, for our purposes, "core ingredients" in-house — vitamin B1, B2, B3, B6, you know, all the different ones. Those should be the ones that most manufacturers are keeping on hand and readily accessible.

But nobody wants to just throw out a typical product that has the basics in it, because there's already a million products like that on the market. So if you've got a couple of what we call "hero ingredients" — the ones you're really going to market, the ones that are really unique — then you probably need to find a manufacturer... that may be one of your first questions if you're wanting a low MOQ and you've got this random, rare ingredient you're going to use: "Hey, do you have experience with this material?"

The reason for that is, if you're wanting a low MOQ, you want a manufacturer that already has experience with that material and has it in-house that you can pull from. If you go to a manufacturer that doesn't normally carry that — they're not making a product that currently has it in it — then you're subject to the MOQ of the raw material supplier now, not the manufacturer. So if your product only needs 50 milligrams of that ingredient, and you make 1,000 bottles, and that only uses 5 kilos of the material — but the manufacturer's MOQ with the raw material supplier is 25 kilos — there's 20 kilos sitting out there that didn't get used. Most manufacturers aren't going to eat that cost. They're going to go back and charge you, the customer, for it.

A good manufacturer will charge you for it, but they'll also earmark it — keep it in their inventory — and when you're ready to reorder, that material's already paid for, so your next price on reorder should be less, because you've already paid for that material and they should deduct it from the price.

DANNY: We have one customer that orders a bottle that requires screen printing directly on the bottle.

MARK: And those MOQs are really high — usually they won't do those for less than 10,000 units. Again, they'll do it, but you're just going to hate the price. It's going to be double what you'd think. It also means you don't have to fill all the bottles or use all the raw materials right away — you just sit on them in inventory. A good manufacturer will sit on those for you. You may get charged something like $25 a month for pallet space, because that adds up. There's a lot of MOQs out there that the manufacturer is subject to in order to make your product.

DANNY: What is tiered pricing?

MARK: Tiered pricing is: the more you order, the less it costs per unit. That's a good thing to talk about right out of the gate with your manufacturer. If you're only starting with 500 to 1,000 bottles and you've got a manufacturer willing to do that — I'm guessing the goal isn't to stay at that level forever as a business. You want to be ordering 5,000, 10,000, 25,000 units at a time. So it's good to ask that manufacturer, "Hey, it's not today, but six months from now, when I'm crushing this thing, what's my price then? If I'm ordering 10,000 units, what does that look like?" Then you can build based on that, knowing you get really profitable at a certain quantity.

On the lower end, I think most brands want to break even — that's the hope, to break even or just not lose much. But you kind of do lose some money at the lower MOQ, and you've got to be comfortable with that for a while, knowing the payday comes when you start moving volume.

DANNY: Last week you had a really great explanation about tiered pricing — I'll try to link to that here if you're on our blog. If you aren't, go listen to last week's podcast, because it was a really great explanation.

MARK: Well, you're too kind.

DANNY: Can a supplement manufacturer change their MOQ? And when would you consider doing lower MOQs as a manufacturer?

MARK: Great question. The simpler the product, the more likely a manufacturer is to go low. If you came in and said you wanted ginkgo biloba, 250 milligrams, that's it, some excipients — done. That's a lot easier to digest. It's a fairly common ingredient, you're just buying one thing. The blending, the testing — none of that's going to be as bad. You'd probably be okay doing that with a single ingredient, two ingredients, three ingredients.

But if you show up wanting a multivitamin with 40-plus ingredients and you want 500 bottles — the testing costs alone are going to be $5,000. That's five bucks a bottle, or ten bucks if you've only got 500, right? So that's a huge difference. You can probably sell a manufacturer on a lower MOQ with a simpler product, but if it gets complicated, your MOQ actually goes up.

DANNY: I've gone to their website and seen that their MOQ for powder products is 5,000 units. Should they even reach out to that manufacturer?

MARK: Of course! There's always exceptions. We talked about this a little bit in the last episode — the brand that shows up with all their ducks in a row, with a lot of thought put into it, already has some branding to share — that gets a manufacturer excited too. If they quote you a certain number, you might be able to negotiate something less. You just have to be open to what they say and hope for the best.

A lot of the reason MOQs are involved in pricing is because we want to make a product for a brand that's going to be competitively priced, so when they put it on the market there's a higher likelihood they'll be successful. If we know that making 250,000 capsules is the magic number to dilute all those fixed costs over the right number of bottles, that's where we want you to be too — so you're not losing money out of the gate. We can say, "This is going to be competitively priced." The brand feels good about it, they get more to spend on marketing and advertising, and it really helps. The manufacturer likes that too.

DANNY: What are some other manufacturing risks that startups have that maybe companies that aren't startups — that are really established — don't have?

MARK: So just to make sure I understand — you're asking what risks a startup has versus an existing brand?

DANNY: Yes.

MARK: Everything. You don't have anything — there's no history, there's no proven track record. Everything's a gamble when you're first starting out. Whereas an existing brand at least knows their cadence — hey, we sell 2,000 bottles a month, or a week, whatever that number is — and you just keep trucking along.

DANNY: Startups a lot of times will come to us and want a test batch. What is a test batch, and what is that versus a regular run for a manufacturer? And do we do test batches?

MARK: Again, this goes back to: we'll do it for you, you just aren't going to like the price. There are two kinds of test batches. There's the kind where you're going to actually try to get it into some consumers' hands — that's different from just trying to see if the product is effective by giving it to a couple of friends for feedback. Usually the latter is, you know, you're giving it to some friends and they give you constructive criticism — "Oh, that's awful" — and you're like, "Oh, man." A test batch is for testing, it's not meant for market.

So you're going to give it to people. We're going to make a little sample in the lab for flavoring purposes, they're going to try it and give you feedback. It's not to go and sell.

We've had people reach out wanting to test the market versus test it for other things.

If you're wanting to just see if your product is effective, we always recommend — and we're not afraid to say it — go to Bulk Supplements. They sell stuff at super low MOQs. Buy a little scale and play chemist in your kitchen. Weigh it all out, make sure everything looks good, and try stuffing it into a little capsule. They've got this little 25-capsule tray thing you push the powder into with a spatula, then connect the capsule halves. That's your best method. Follow the rules, don't do stupid stuff — like don't pack them 100% full of caffeine. We're not endorsing that. We're just saying, if you've got an idea and want to see if it works, that's probably the best and cheapest way to get a feel for what you want to put out there. Then go to a manufacturer and say, "Hey, I've done this."

We have this happen all the time — people come to us and say, "I've been experimenting, I've got this really cool idea, and I want to see how it works on your level, not my home kitchen version." Literally, KitchenAid mixer, stuff in it, the whole thing.

DANNY: Something that might be even easier is to find a product similar to what you want, start taking that, and add whatever else you want.

MARK: I told you the story earlier today, right? We used to make a product — Stephanie remembers. So, years ago, we formulated this product. Every once in a while the team gets bored in the lab and comes up with something fun. We wanted to try this particular ingredient, so we made a little cocktail as an energy product, and my wife loved it. We made a small batch and it was awesome. Well, we've never made it since, and she keeps swearing I've got to make that again. So I just got on Amazon, found all five individual ingredients, bought them separately, and now she makes her own little cocktail — we don't have to put it through production. It's five different brands, a capsule of this single ingredient, a capsule of that one, and you put them all together and do your own thing. That's probably the safest way to test the effect, with trusted brands.

MARK: And you want people to reorder? So make sure you get them a really efficacious product. Don't just throw something out there because it's got a couple of trendy buzzwords — like, oh, it's got magnesium glycinate in it, but it's only 5 milligrams, it doesn't do anything, but it'll look good on the label. Put good doses in there. Play around with it on your side to make sure — wow, I've created a version that's awesome — and then put it all together into one product and go out there and do your thing.

DANNY: All right, Mark, we're coming to the end of the show. Could you give us a summary of what we spoke about, and maybe any additional advice you have on MOQs?

MARK: On MOQs — it's important to know what your MOQ is, and why. I keep coming back to something in my mind, so I'll just share it: why is that your MOQ? Why do you feel that's your number? Is it because you don't have a lot of confidence in it — you're kind of like, "I'm gonna go in with 500 so I don't break the bank"? Is it financial? Is it your confidence level? What's defining what you feel your MOQ should be?

You're also up against expiration dates. If the first year is going to be a slow grind, and you take on 2,500 units but only sell 1,000, you have to throw away 1,500. Well, it's a good tax write-off.

DANNY: Or give them away.

MARK: Yeah, start giving them away early.

DANNY: Yeah, give them out to people.

MARK: Yeah, just hand them out. So many brands do that when they get started — they'll say "get your free bottle," charge you for shipping and handling, and that covers the shipping and the cost of the bottle, so they don't lose money, but they get the product into people's hands to try. We actually had a customer, right at the beginning of the year, who mentioned that a quarter of what they'd made was already planned to give out for free. That's a great strategy — it speeds things up. At first it's probably a little painful because you're thinking you could be selling that at retail, but you've got to find a way to get it into people's hands, especially if you have a great product.

DANNY: Yeah, they'll reorder.

MARK: It's gonna be awesome. So yeah, I'd agree with the concept of knowing your MOQ and being true to that for the most part. We often come back and say, "Your number is probably lower than what we can really give you a good price at." Then all of a sudden their MOQ goes from 500 bottles to, we say ours is 2,500 minimum, and they're like, "Well, we could do that." Then lead with that! Because ultimately we think, why did you all of a sudden agree to five times what you told us originally? I think it's probably just to get a price, right — just to know what it is. And we get that.

DANNY: I don't think it hurts for a company just starting out to try to find the feasibility of doing a product. If all you want is a price, I think a manufacturer appreciates you coming and saying, "I just need a price, is there any way you could give me a quote?" It takes about ten man-hours on average to put together a quote, depending on the formula.

MARK: Wouldn't that be a cool business model — just be honest? Tell us exactly what you want, no games. Come to us straight and say, "I need to know my MOQ, I'm at a super early phase of considering this, but I need to know price and I need this and that." That would be refreshing on both sides instead of doing the dance just to get a price quote. That feels relational — is that a word? It feels like, "Hey, we're now friends, we're having an open dialogue, and you're telling us exactly where you are," instead of us getting excited thinking "new customer, new customer," and you thinking, "Man, I'm kind of misleading these guys, I'm not really ready to pull the trigger on this for maybe six months to a year if the numbers add up." That would be really refreshing.

You could almost start your own side hustle — just quoting products to give people an idea. If you just want a ballpark estimate, we can probably look at something in about 30 minutes and tell you it's going to be $6 to $8 —

DANNY: It might even be a little wider, like $6 to $15.

MARK: LOL! That really helps, right? It's like wanting to buy a new car: "Come on down to Lexus." "Oh, it's $40,000 to $150,000." "Okay, I'll start saving up." I love the idea, Danny, but I don't know that that helps. LOL!

We also may not have talked about this — the risk of going with a lower-MOQ manufacturer. It could be all above board and amazing. Some companies are really big and carry a large catalog of raw materials, and they may have everything you need quickly and can do it at a lower MOQ — that's awesome. One thing to look for is whether they're GMP certified or GMP compliant. If they're certified, you should be able to trust everything they do, because they're third-party audited — you should be getting a quality product every time. If they're just GMP compliant, you're kind of taking their word for it — it's like a handshake, and you don't know if their fingers were crossed. So you've got to be careful and know what to look for when a manufacturer offers lower MOQs.

Some are probably well-intended — "We're not going to make anything on this first order, but that's our foot in the door with new companies." Others... you might want to check out their facility on Google Maps.

DANNY: We recently had a meeting with a customer we'd let know we just couldn't meet their MOQ goals. They found a company that could work with them at lower MOQs. They came back to us after selling their product for a year, having really tested it, and found out the product they thought they were selling wasn't what they thought — it was missing the potency of the ingredients they believed they had.

MARK: The customer didn't know the right questions to ask, and it should've been an opportunity for the manufacturer to clarify, "Do you mean this or this, as far as elemental mineral content?" Instead they assumed the customer meant powder form, when the customer didn't realize it wasn't elemental magnesium, for example. So the customer got a lower-quality product but thought it was higher quality. That's a hard conversation to have, and you lose trust.

DANNY: I don't think that manufacturer was being malicious — they just found a way to hit the lower MOQ without explaining why they were able to hit it.

If you aren't ready for a custom formula product, can you build your brand with a private label product?

MARK: Yeah, it's not going to be exactly what you want, but it's a cheaper starting point to get into a category. It's not unique to your brand — there are brands out there that sell 50 to 100 different products, with 50 to 100 different companies putting their label on that same product. It's not yours, but they'll sell you 200 bottles at a time. It's pretty close to what you wanted — maybe missing an ingredient or two — and you're testing the waters. It's not a terrible way to go. If you get some traction, you can come out with a custom version that's new and improved, with everything you really want, because you've been able to test it first. I don't love the idea, though, because it feels like, "Hey, I gave you a really subpar product, and now you get a good one — sorry." Edit that — I gave you a really crappy product.

DANNY: Thank you guys for joining us today. But before you go, please like, subscribe, and hit the notification bell to be notified when new shows are posted. Also, put your questions in the comments or email us at info@canyonsidelabs.com.

MARK: So tune in next show, when we talk about private label versus custom formulas — our ending there was a pretty good lead-in to what it's going to be next time, right?

DANNY: It's like it was meant to be.

MARK: Oh, perfection. Ciao for now.

DANNY:See you guys.