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Why unit price higher for small orders?
Date:2014年05月15日   Visits:

For small order quantities, or trial orders with specific customized designs, the manufacturers will need to include many items while making your quotation. They will put all the expenses into the prices, which include comprehending, designing, and confirming product and production requirements, molding and die making, sourcing and purchasing of parts and materials, scheduling production, labor costs, asserts depreciation, opportunity cost of other orders while the assembly lines are occupied for your production, etc. Remember, they actually lose not profit if the order is way below their MOQ. If you think that they are making profit out of your trial order or sample order, you are way mistaken. No factory will bother making so much effort for such insignificant gains. If they agree to make a sample or deliver a trial sample to you, they hope to establish further win-win relationship with you.

What must be mentioned is that the per unit cost for making a small amount of products is usually much higher than that of a large quantity, because less units share all other costs except for parts and materials. This is the reverse of the economy of scale of mass production.

Some may ask why the factories would not try to pose a friendly gesture by offering a low sample price or trial quotation. Well then our buyers would be a little floaty with their thinking. The manufactures do not recognize you. They do not intend to profit from you on a trial or sample order, but it doesn't mean they are willing to make a potential lose for some non-solid opportunities. They, as factories, are not likely to run, but new buyers won't be given much credit until they prove themselves.

What's more, a proper order may not be placed after the sample(s) or trial orders for many possible reasons. The manufacturers have to take precautions for femage control.

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