Cost Critical Point Formula
The condition for accepting MOQ: expected profit ≥ production line switching cost+opportunity cost
Production line switching cost: including mold debugging (about ¥ 8000/time)+raw material loss (3-7%)
Opportunity cost: the difference in profit between producing regular orders in the same amount of time
Case: A notebook factory has a regular order profit of ¥ 36000/day, but needs to suspend production for 1.5 days to take on small orders → opportunity cost of ¥ 54000
Step by Step Breaking Strategy and Script Template
- Dealing with “high mold costs”
Factory statement: “The mold opening fee is only ¥ 20000, and 500 pieces are not worth it at all”
Breaking script:
We are willing to bear 50% of the mold cost (¥ 10000) and promise in the contract:
✅ Add 3 times the number of orders in the next 12 months
✅ Allow your company to retain molds for producing similar products
✅ Prepay 30% of the mold fee as a goodwill deposit
Psychological principle: Loss aversion effect (factory unwilling to give up prepaid funds already received) - Dealing with “material procurement difficulties”
Factory statement: “You need to order at least 1 ton of this special paper, and you can’t make it with only 100kg”
Breaking script:
We have found that your company’s regular product A uses similar substrates. Can you please:
1. Merge our order with the production schedule of Product A
2. We pay the raw material storage fee (¥ 15/day)
3. Accept partial delivery (100kg per month, lasting for 10 months)
Supply chain logic: utilizing the marginal cost advantage of existing inventory in the factory
Advanced Negotiation Skills
Cost Visualization Technology
Operation Steps:
1. Request the factory to provide a detailed list of production line switching costs
2. Calculate the marginal profit of small orders:
Marginal profit=quotation – (direct materials+direct labor+energy consumption)
3. Prove that small orders can cover variable costs (usually 60-75% of total costs)
Dialogue Template:
If the marginal profit can cover 80% of your company’s variable costs, is it possible to accept this MOQ? We are prepared for a 5% premium
Flexible Production Binding Technique
Scheme Design:
Bind small orders with the factory’s off-season schedule (such as during the peak period of air conditioning fees from June to August)
The promised order includes 20% non-standard parts and 80% universal parts (reducing the frequency of production line adjustments)
Case
A certain pen set supplier accepts a MOQ of 300 pieces (originally requested 3000 pieces), on the condition that the metal logo is changed to a universal plastic part, saving 4 hours of mold debugging time
Ultimate Script Framework
When the factory said: MOQ cannot be lowered.
You responded:
- Understanding stance: “Fully understand your company’s considerations for production efficiency”
- Create option: “If we adjust these three details (materials/processes/delivery), can we find a balance point
- Interest binding: “This cooperation will become a touchstone for our long-term relationship, with an estimated $500000 orders in the next three months
- Final compromise: “We can accept an X% increase in unit price, but we need your company’s support for this MOQ
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