How to counter the price increase rush, and MOQ settings

Due to the five-fold increase in crude oil prices from May 2020, the production and transportation costs of raw materials around the world have risen, creating a rush of consumer product price increases. Even in Japan, the price increase of wheat affects the price of bread and the price of noodles.

This price increase is due to the following three causes. First of all, due to the COVID disaster, there were few workers at production sites and ports, and there was a shortage of labor. The second is that logistics are tight due to purchases on EC sites. Finally, the crude oil price itself fluctuated due to the situation in Ukraine. Once the COVID disaster is over, the cause of price increases due to supply shortages will disappear. However, prices will continue to rise for the time being.

These cost-increasing storms firstly hit low-priced items. For example, even in matcha, Chinese matcha is hit directly. Good quality Japanese matcha is 4-5 times more expensive than Chinese matcha, but the weight and volume are the same, so Chinese matcha will be 4-5 times more damaged costly than Japan. 

At our company, for example, we have low-priced products, but we have a lineup of high-end products, and the impact of rising transportation costs is limited so far. 

We set the MOQ to 10kg. For example, 100g per bag is 100 pieces, and 50g bag is 200 pieces. There are two reasons for this.

One is that if you make a custom design, the printing unit price of the sticker will be very expensive if you set the MOW small. The economical number of production of original stickers would be more than 300.

The other is that the courier's economical weight range is 10kg-30kg when shipping abroad.

Lowering the MOQ makes secondary materials such as stickers much more expensive than products and makes international shipping costs has big impact to the retail price.

Whether you're custom-designing or ordering from abroad, it's practical and important to think about what to do in an economically cost-effective zone.