Buyer guide

MOQ and Incoterms Explained: Importing Chocolate from China

In short

MOQ is the smallest order a factory will produce for one product, usually set per product and packaging. Incoterms decide who pays for and carries the risk of each step of shipping: with FOB the factory delivers onto the ship in China, with CIF it also pays sea freight and insurance to your port, and with DDP it delivers to your door with duties paid.

What MOQ means for chocolate

MOQ (minimum order quantity) is the smallest quantity a factory will produce for one item. For chocolate, MOQ is usually set per product and per packaging, because each run needs mould or line set-up, cleaning and packaging changeover.

MOQ can be expressed in different ways, so always check the unit:

  • Cartons (for example, a number of cartons per item)
  • Kilograms or tonnes (common for bulk or loose products)
  • Pieces or packs (common for printed packaging)

Custom foil, printed wrappers or private-label packaging often have their own minimums, because packaging materials are printed in runs.

Mixing products in one container

Many buyers want several products in one shipment. Ask your supplier whether you can combine different items in one container as long as each meets its own minimum. This is a common way to test several products in a new market.

Incoterms: who pays, who carries the risk

Incoterms® are standard trade terms published by the International Chamber of Commerce. They decide who pays for each part of shipping and when the risk passes from seller to buyer. The most common terms in chocolate trade from China:

Term Seller (factory) delivers… Buyer pays for…
EXW — Ex Works Goods ready at the factory Everything from the factory onward, including export clearance
FOB — Free On Board Goods loaded on the ship at the Chinese port Sea freight, insurance, import duties, delivery
CFR — Cost and Freight Goods on board; seller pays sea freight to your port Insurance, import duties, delivery
CIF — Cost, Insurance and Freight As CFR, plus minimum cargo insurance Import duties, delivery
DDP — Delivered Duty Paid Goods at your door with duties paid Unloading

Note: under FOB, CFR and CIF, risk passes to the buyer once the goods are on board in China, even if the seller pays the freight.

Getting comparable quotes

Quotes are only comparable if they use the same terms. Include in your inquiry:

  1. Products and specifications — unit weight, packaging, pieces per pack.
  2. Quantity — cartons, kilograms or containers.
  3. Incoterm and port — for example “CIF Manila” or “FOB China port”.
  4. Container type — and whether you need a refrigerated container in hot seasons.
  5. Documents — certificates and paperwork your market requires.

Chocolate-specific points

  • Refrigerated containers cost more than dry containers. Ask for both options if you ship in hot months.
  • Seasonal timing: for festival products, agree the ship date first, then work backwards.
  • Chinese New Year: many factories and logistics services in China pause for this holiday. Plan around it.

About us

AOYUAN FOOD makes compound chocolate products in Jieshou, Anhui, China. Send us your products, quantity and destination port and we will reply with a quotation.

Frequently asked questions

Why do chocolate factories have a minimum order quantity?

Each production run needs set-up, cleaning and packaging changeover. Below a certain quantity the cost per unit becomes too high, so factories set a minimum per product or packaging.

What is the difference between FOB and CIF?

Under FOB the seller delivers the goods on board the ship at the port of loading and the buyer pays sea freight and insurance. Under CIF the seller also pays sea freight and minimum insurance to the destination port, but risk still passes to the buyer once the goods are on board in the origin port.

Which Incoterm should a first-time importer choose?

Many first-time importers choose CIF or CFR so the supplier arranges sea freight, and work with a local customs broker at the destination. Buyers with their own forwarder often choose FOB for more control over freight cost.

Sources

  1. International Chamber of Commerce — Incoterms® 2020

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