Why do the factories have MOQ requirement?

 Why do the factories have high MOQ requirement?

A. The factories invested huge amounts to build a factory and, more importantly, write the paychecks. They need big orders and big buyers to keep their factory operation in a good flow.

B. The factories also have to buy the parts and materials from the material suppliers. No matter how small an order is, they will need to make moulds and dies for it, they’ll need to purchase all required materials. The manufacturers’ material suppliers also have their MOQ. So the factories will have no choice but to order a relatively large amount of each material needed for a specific order.

C. Unlike the stockmarket where deals are made virtually in a flash of time, production of an order takes real time and space. The manufacturers need to schedule dates and times, and number of workers and materials for the production of any order, regardless of the quantity of it. This process itself produces cost. Nevertheless, when an order is rolling on the line, other products will have to be pulled over or delayed. This is to say, that the opportunity cost of a small order partially includes the profit off a confirmed large quantity order.