Setting minimum order requirements is one of the most powerful strategies for ensuring a profitable and sustainable wholesale business. Having these requirements allows you to maintain order efficiency, while also boosting your average order values.
While it can be tempting to eliminate these requirements to attract more customers initially, it can hurt your bottom line in the long run. In this article, we’ll dive into minimum order requirements and outline why you should implement them in your wholesale business. Additionally, we’ll introduce you to a powerful tool that will help you apply this strategy to your WooCommerce store.
Ready to learn? Then let’s get right into it!
What Are Minimum Order Requirements?
Minimum order requirements are pre-defined rules that wholesale customers must meet to gain access to wholesale pricing and place an order. Having these rules ensures that each wholesale order placed in your store is worthwhile in terms of the cost and effort required to process, handle, and fulfill wholesale orders.
There are two types of minimum order requirements you can set:
Type #1: Product Minimums
Product minimums require wholesale customers to purchase a certain number of specific products (or variations of that product). For example, if you sell hoodies in bulk, you can consider setting a product minimum requirement of at least 30 hoodies per order. By setting this, you ensure that each order is substantial enough to cover discounted wholesale prices and delivery costs.
Type #2: Order Minimums
The other type of minimum that you can apply to your wholesale customers is an order-based minimum. This sets a minimum total value or quantity for an entire order. For instance, you can require the total value of an order to be at least $300 before customers can enjoy wholesale discounts.
In Wholesale Suite, this can be managed by setting order quantity minimums or order subtotal minimums. Both approaches can be equally effective, though we recommend that you keep it simple. Setting straightforward minimum order requirements helps ensure that your wholesale customers understand the expectations, fostering trust and transparency.
5 Key Benefits Of Setting Minimum Order Requirements In Wholesale
Now that we understand what minimum order requirements are in wholesale, let’s dive into why you need to implement this strategy in your WooCommerce business.
1. Boost average order values
Boosting the average order value is, as a store owner and marketer, something you should always have one eye on. After all, It’s cheaper to sell more to existing customers than to find new customers to sell to. And, the more you sell in one order to a wholesale customer, the more they will have ordered by the end of the quarter or the year.
In this way, you can boost your overall wholesale business. You can set minimum order requirements based on an agreement or you can set it as a variable term that you adjust as you get a feel for how much your wholesale customers typically order.
2. Improve operational efficiency
When you set minimum order requirements for your wholesale business, you reduce the frequency of smaller, less profitable orders. As a result, you can focus your time and effort on handling larger, more valuable orders. This streamlines your operational efficiency and optimizes your warehouse operations, as bulk orders are easier to fulfill. Overall, this saves you time, money, and resources, allowing your business to run more smoothly.
3. Increase sales of a particular product (or product line)
Wholesale is all about moving large amounts of product. It’s very much a numbers game because you’re often selling at upwards of 40% off retail margins. Setting a product-based minimum can ensure that you are selling enough of that particular product per order so that it’s worthwhile. This is also beneficial if you have slow-moving goods that are taking up valuable storage space. For instance, you can set product minimums of 50 units of that specific product, helping you clear out inventory and boost your overall sales volume.
4. Foster better relationships with wholesale customers
Setting order minimums also helps ensure that your customers meet their order commitments. It can be hard to get people to stick to a specific minimum over a term, but setting minimum order requirements can help you get there without threatening.
By establishing clear minimum order requirements from the outset, you can create a fair standard for your wholesale customers, fostering trust and reliability in your business relationships.
5. Results to better inventory management
Another way setting minimum order requirements benefits your business is by improving your inventory management. With set order minimums, products move in larger quantities. This prevents the accumulation of slow-moving stocks that can take up valuable inventory space.
This also makes inventory forecasting a lot easier. When you know the average quantity required for each wholesale order, you can predict inventory needs and manage your stock levels accordingly. Ultimately, by having the right products available at the right time, you can enhance customer satisfaction.
Setting Minimum Order Requirements In WooCommerce With Wholesale Prices Premium
As we’ve learned, setting minimum order requirements can be very beneficial for your wholesale business. The good news is that you can easily implement this strategy in WooCommerce with the help of plugins like Wholesale Prices Premium.
Wholesale Prices Premium is part of Wholesale Suite–a collection of four powerful plugins that allow wholesale store owners to bring their entire wholesale operations online.
Wholesale Prices has a free version that allows you to set wholesale prices on your WooCommerce store and assign an exclusive wholesale customer role for bulk buyers. However, the premium version allows you to do so much more, including:
- Setting minimum order quantities for wholesale orders
- Implementing minimum order values for wholesale orders
- Create tiered pricing discounts based on order quantities
- Creating unlimited wholesale user roles so you can segment bulk buyers effectively
- Mapping shipping and payment gateways for wholesale customers
- Tax-exempt wholesale customers
- Provide or disallow free shipping for wholesale buyers
- and so much more!
Want to learn more? 💡 Check out our detailed tutorial guides on how to set minimum order requirements using Wholesale Prices Premium:
- Calculate The Minimum Order Quantity (2024 Formula)
- How To Set WooCommerce Minimum Order Quantity For Wholesale Products
- How To Set A WooCommerce Minimum Order Amount
Frequently Asked Questions
What is a minimum order requirement?
Minimum order requirements are thresholds set by businesses that specifies the smallest quantity or value of products customers must purchase to qualify for wholesale pricing.
What is the minimum order value required?
The minimum order value is the lowest amount that a bulk order must reach for a customer to place an order and enjoy benefits, such as bulk discounts.
Why set a minimum order value?
By setting minimum order values for wholesale orders, businesses can ensure each order placed is substantial and profitable. It helps improve operational efficiency, ensuring that order values cover handling and order fulfillment costs.
What are the disadvantages of minimum order quantity?
Setting minimum order requirements can potentially deter customers who can’t meet the required values. Additionally, it might pressure some customers to over-order, leading to potential overstock and cash flow issues. Despite these disadvantages, when implemented thoughtfully, minimum order requirements can significantly benefit a wholesale business by ensuring profitability and operational efficiency.
Conclusion
By using sensible, but smart minimum order requirements on both the product level and the order level you can achieve your goals as a wholesale store owner while keeping your wholesale customers happy. In this comprehensive guide, we’ve explored the two types of minimum order requirements you can set for your wholesale business:
Likewise, we’ve walked you through the five key benefits of setting order minimums in your store:
- Increase average order values
- Improve operational efficiency
- Boost sales of a particular product (or product line)
- Foster better customer relationships
- Improve inventory management
If you want to explore adding wholesale to your WooCommerce-based store and implementing minimum order requirements, then you can use Wholesale Prices Premium. This powerful plugin allows you to set wholesale prices, set order minimums, create exclusive wholesale discounts, and so much more!
Many of our clients have moved their entire wholesale ordering operation into their online store using Wholesale Suite which pleases both the store owner and the wholesale customer. Do you have any questions? Let us know in the comments section below!
