MOQ?

We all know what MOQ (Minimum Order Quantity) means? heard about this name many times from several of the internally as well as external stakeholders. It’s a big challenge to execute any order which is not meeting the so called Moq, as they may come back saying that it is

• not possible to do due to productivity loss
• willing to do provided if I get a decent up charge from regular price
• they require long lead time as the queue is long

Who does not need a big order at this juncture? the answer is yes from all of us, it’s our wish. Whereas our industry reality differs hugely in the present scenario. Let’s walk through the same for better understanding.

Spending

In the new normal everyone has practiced the art of living with less & they have been limiting their spends to a great extent. People have started applying additional filters for all their spending except food & groceries.

Family members are at home mostly due to WFH, Online classes, age or keeping the safety aspects in mind. Unless it is really required & there is a genuine necessity people are not stepping out of the home. Due to this fact textile/apparel purchase requirements have been restricted & reduced dramatically.

Every penny being spent is under the scanner due to the drastic economic shift seen by each of our families after pandemic. Most of the families are questioning the necessity of each & every purchase.

Less demand 

It’s quite clear that people want to spend & buy very less in numbers. Whoever wants to, wants to spend as minimal as possible. They need more variations to choose from, which means requirements are going to be reduced drastically from the consumers.

Supply chain

From the above, the current mindset of the consumer is quite evident. Now let us review current scenario from a business perspective.

Offline 

Be it apparel fashion brand or retailer everyone is unable to foresee their growth plan & expansion due to the present market condition. They are taking baby steps and are forced to play a “play & pause” game with inching motion towards the future. It shows that how severely the Expansion door is affected.

Since the past few months we have been hearing that many leading brands/retailers are closing their stores, reducing their number of outlets due to lower sales numbers. Unless the offline stores do not have decent sales numbers, it is very difficult to continue running the stores due to operational cost challenges. It’s a clear threat for the store Retention.

Online

With the increased number of formats & brands day by day, online platforms are offering huge options to consumers from both organised to unorganised players. No of players who are involved in the online business is more now a days. Every offline format has started approaching the consumers with their own online channels or through partnering with leading online players to sell their merchandise. Less requirement & large options to choose.

Inventory

Due to this sudden disruption in business cycle huge volumes of merchandise have been staked as stocks with respective buyers, Warehouse & distribution centers . Most of the vendor partners are also holding minimum of 1 season goods with them & eagerly waiting for their buyer’s green signal to ship them. This means that as much as 2 seasons required goods are available in the apparel/textile eco system as inventory.

Looking at the above scenario of INVENTORY, LESS DEMAND & REDUCED SPENDING ABILITY by consumers the order depths & requirements are going to be minimal at least for next few seasons. Number of vendors waiting for the orders & open capacity available in the market is more whereas the number of orders & quantity of orders going to be released is less.

Order quantities at a SKU level are going to be challenged against the previously defined MOQ in most of the cases.

Curtailed MOQ - new USP

Every challenge creates an opportunity, all it requires is a “PARADIGM SHIFT” (fundamental change in approach).

Scenario of executing /managing the small & less order quantities are not going to change or quantities won’t  increase due to present market conditions.

In this scenario, opportunity lies with the one’s who approach Curtailed MOQ- new Unique Selling Proposition (USP) since it is the need of the hour.

Everyone today wants to hear solution oriented conversations rather than a simple NO. If someone approaches their customers with a yes & demand for support from internal & external stake holders by various means like collaboration, cohesive working & synergy to make things happen, they will get rewarded & appreciated with orders as a result. Be it price or delay, customers surely support the one who had supported them at their challenging times.

Curtailed MOQ- new USP is going to be the way forward approach of the apparel/textile eco system. Anyone who approaches the modern business challenges with an open mind & looks at the same as an opportunity are the ones who are going to be the market leaders soon.

The current phase is temporary, if someone is able to manage success at this challenging phase with the approach of curtailed MOQ -new USP, can grow faster as the scenarios are going to get better soon.

It provides ample of business opportunities for the ones who had take up Curtailed MOQ -new USP. It gives them a chance to grow with their customers as they will prioritise them for longer & better mileage growth due to the support they extended at challenging environments.

It’s time to look at challenges as an opportunity for long term & sustainable growth. Hope you like this article, do share your views to add value to it.

RELATED TOPICS:#Apparel,Ramesh Gunasekaran