Wholesale Terms for Beginners -Part 2

In order to have a better working relationship with your wholesale supplier, you need to understand the wholesale terms, abbreviations and acronyms that they use. Yes, learn it before you ask the supplier for the definition! Plus, it will make you look more professional to the supplier.

So.. MAP, NET 30, FOB, MOQ, QOH..etc what do all of these things mean?

QOH – acronym for Quantity On Hand

You will want to pay close attention to this one! This number reveals the quantity of an item that the wholesaler has available in their inventory at any given time. Some wholesalers keep this private in dealer only areas of their websites and others, you have to ask about their quantity levels.

NOTE: It is extremely important to know your suppliers inventory levels at all times if you are using them as a drop shipper. You will want to make sure to remove any products where the inventory has dropped low to zero. Or on your site you can inform your customers that you only have limited quantities available and to contact you if they can still get one. This will avoid having backorder headaches. So pay close attention, especially during the Holidays!

MOQ – stands for Minimum Order Quantity

Typically the confidential dealer price list will have a MOQ column. This is the minimum amount of products that can be ordered each time. It will be shown in either dollar amounts of unit amounts. So when you place orders with your wholesale supplier, the MOQ determines the smallest amount you can get of that particular item. The MOQ will greatly range depending on the industry. Larger pricier products have a smaller MOQ than smaller, less expensive products.

NOTE: Remember that wholesale is a volume business. Profit margins are thin for wholesalers, and so they make more money by selling in large quantities at one time. The same applies to the retailer. When you buy in volume, you can make more profit as well because the more you buy, the cheaper each individual item gets.

SPQ – means for Standard Pack Quantity

Sometimes you will hear a few variations of certain wholesale terms. I’ve also heard it referred to as “Standard Packing Quantity” and “Standard Package Quantity”. It all means the same thing though, it’s the minimum amount of multiple products that can be ordered in one package. Just like MOQ, SPQ’s also range greatly between industries. For example, a wholesaler with toasters might have a SPQ of 4, but a wholesaler for dish cloths could have a SPQ of 200 or more.

NOTE: Keep an eye on MOQ and SPQ if a wholesaler requires both. For example, even though a lamp wholesaler might have a general minimum dollar order of $100.00, they might also have a SPQ of 4. So if a lamp costs $75.00 at wholesale, you must still buy 4, and so your minimum in this scenario is $300.00.

We here at WorldwideBrands.com have been communicating with wholesalers and retailers for over 20 years! We KNOW what these terms mean and ask our listed suppliers some of this information when researching them for a listing in our B2B Directory of Certified Wholesalers. Asking about MAP policies and what their SKU counts are, helps us to understand how big their business is, and what they require from their dealers.

This was PART 2 of Wholesale Terms for Beginners.
To read PART 1, GO HERE.