What does “low MOQ” mean here?

Low MOQ Initiatives by Hula Global’s Co-Pilot Program enable brands to have some flexibility with their minimum order quantity (MOQ).

There are several complexities regarding order quantities within an apparel supply chain. Various layers of order quantities impact the minimum order volume globally.

Each case is unique within the context of the industry. We will explore some of the unique complexities regarding the global supply chain to provide insight to the reader with regard to the Co-Pilot Program and Hula Global and the order quantity complexities available to emerging brands.

In the apparel industry, the Minimum Order Quantities or MOQs are set by a number of different actors. In a supply chain, an order quantity may have different variable components depending on the level of control exercised by the different actors in the supply chain.

There may be some limitations set by the fabric supplier, buyer, or shipping and distribution. Each component in the supply chain plays a different role and therefore, "low MOQs” is not a goal in the elimination of minimums.

For small and developing brands, it is a goal in the simplification and optimize order quantities.

The first tier of minimums is termed the SKU Minimum.

SKU is an abbreviation for Stock Keeping Unit, which refers to a specific style, color, and size combination. This minimum exists to ensure some consistency in the production efficiency and the quality of the product.

When the quantity per SKU is too small, it can result in inconsistent quality, and it may contribute to a higher rate of defects, as well as inefficient production. Machine calibration, standardized work processes, and the volume of product to be inspected for quality control all impact production efficiency.

With the Co-Pilot Program, we aim to keep the SKU minimum reasonable enough to allow brands to do limited runs and still meet quality benchmarks. Usually, for products that retail between $20 to $100 range, SKU minimums are set to be 100 units per SKU.

The second tier of minimums is the Fabric Minimum, which is not governed by Hula Global but instead by fabric mills and suppliers, who have their own minimums in terms of yards or kilograms before they will produce or sell a given fabric, as the setup costs for fabric production, dyeing, or printing are not economical for small orders.

Even if a brand is producing only a few hundred garments, the fabric supplier will still have a minimum.

The third key element is MOV.

MOV stands for Minimum Order Volume.

The Hula Global team has implemented this as a way to keep production financially sustainable. MOV is the total volume across all styles, colors, and SKUs in an order.

With typical manufacturing processes, Hula Global has a certain MOV to provide justification for how a factory, production, and logistics are organized. With the Co-Pilot Program, this is not the case, as this MOV is waived.

This is one of the program's best features, as it enables smaller brands to order without having to hit a total volume target.

With MOV waived, brands can concentrate on reasonable SKU and fabric minimums, without the pressure of having to produce thousands of units across several styles. For startup and boutique labels, this drastically cuts the financial exposure and, consequently, makes manufacturing less daunting and more within reach.

When it comes to the nitty-gritty of the matter, the term "low MOQ" under the Co-Pilot Program essentially translates into the ability of brands to produce as few as 250 to 500 pieces of product, depending on the nature of the fabric used in the garment.

For instance, in the case of a simple garment like a T-shirt or a jersey dress, the MOQ could be slightly lower than the minimum for more complex garments like structured dresses or jackets with embellishments.

This range is considered low in the apparel industry, especially when traditional manufacturers require anywhere from 1,000 to 3,000 units per style or higher.

In many cases, such MOQs are not feasible for many emerging brands. The low MOQ structure of The Co-Pilot Program eliminates these problems.

The low MOQ requirement also results in increased flexibility in the process of product market testing.

For instance, rather than requiring huge quantities of production before determining the exact nature of the response from the consumers, the brands can start in smaller quantities, thus enabling them to make more informed decisions rather than relying on speculations.

Additionally, the low MOQ factor allows the brands to test out different styles, colors, or even collections and check what works best with their audience.

The traditional approach would dictate the production of a high quantity of a single product, but through MOQ, the focus is on variety.

From an operations point of view, "low MOQ" doesn't necessarily mean we compromise on product quality or the rate of production.

We still implement professional quality control, planning of production, and coordination with suppliers. What changes is the efficiency of the system implemented.

Also, it is worth noting that while a low MOQ does not equate to costs, smaller batches tend to have slightly higher costs on a unit basis as opposed to mass production.

This is perfectly normal since costs need to be absorbed in smaller batches. However, the advantages are reduced risk, better management of stock, and creative freedom for new brands.

In summary, "low MOQ" in the Co-Pilot Program refers to a balanced system intended to address limitations to entry in garment manufacturing.

The program takes into consideration the requirements of suppliers of fabric materials, especially in terms of the quantity and quality needed, while at the same time eliminating strict total order volume requirements.

By including production of 250–500 units per style and eliminating the need for total order volume requirements, Hula Global makes garment manufacturing professional, feasible, and sustainable for fashion brands.

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