How we read a factory's minimum order and the price breaks above it

When you ask a factory for a price you usually get two numbers back, a unit cost and a minimum order quantity. A lot of buyers treat the minimum as a yes-or-no. If it's 10,000 and they wanted 3,000, they move on to the next supplier. Before you walk, ask two things: whether they'd run 3,000 with a setup charge on top, and whether it's a stock item that somebody already has sitting in a warehouse. Then ask for the rest of the price table, which is what most of this post is about.

Where the minimum comes from

Most of a minimum is setup cost. Setup takes about the same work whether the line then runs 500 pieces or 50,000. The tooling goes in, somebody matches the color, the print plates get changed, and some of the first batch off the line ends up as scrap while the operator dials it in. On a short run all of that lands on very few units. Some of it comes from the factory's own material minimums, like having to buy printed film by the roll, and some is just what they'd rather run, which is why a minimum is sometimes negotiable.

Once you're over the minimum, the setup is already paid for. The unit price doesn't slide down smoothly from there, though. It usually drops in steps, called volume breaks, at quantities where the factory can schedule a longer run or buy its own raw material in a bigger lot.

Ask for every break

It's common for the next break to sit not far above the minimum, and for the saving there to be more than a rounding error. On a tube quoted at 5,000, the 10,000 price is often worth asking about.

Nobody's hiding it from you. You asked for a price at one quantity, so that's the price you got back. "Can you do better on price?" invites a haggle. "What are your break quantities, and what's the unit price at each one?" usually gets you the whole table in one reply, and then you can do the math yourself.

Then work out what the extra stock costs you

Going up a break isn't free. The extra units need somewhere to sit, and the cash is tied up until you use them. With hardware there's also a chance the next generation of cart or battery changes the fit while you're still holding last year's stock.

So put the saving next to how long the bigger order would last. Say you go through about 2,000 tubes a month, and the 20,000 break is a cent and a half cheaper per tube than what you pay at your usual order size (made-up numbers, just for the example). On 20,000 tubes that's $300 saved. It's also ten months of tubes paid for up front and a few square feet of shelf gone. For some shops that's fine. If cash is tight it usually isn't. If you know your usage, this takes a minute to work out. If you don't, you're guessing, and we'd sort out the usage numbers before worrying about the break.

Minimums and breaks in our catalog

We don't add a platform minimum. Minimums come from the factory that makes the product, and a product that comes in sizes can carry a higher minimum on a size that runs on different tooling. Where a product has a published price, the public product page lists that price at each break. Type a quantity into the box and it prices that number, tells you how many more units get you to the next cheaper break and the unit price there, and says how much less you'd pay overall when ordering up costs less in total. You can browse the shop without an account. A free account shows the factory offers that deliver to the states you operate in, each with its own minimum, breaks and lead time.

For reorders, the forecast gives each item a run-out date from how fast you use it. For an item linked to a catalog product, the suggested quantity covers the number of days you set on the item, gets raised to the factory's minimum if it comes in under, is rounded up to a whole case and is priced at the break it lands on. Going up to the next break is your call. The timing side of the same decision is in our post on lead times.