Why Your Co-Packer's MOQ Is Almost Always a Trap

The pitch sounds reasonable: run more units, pay less per unit. Your co-packer shows you a tiered pricing sheet. At 5,000 units, co-packing costs $0.36 per unit. At 50,000 units, it drops to $0.18. You do the math, you see the savings, and you commit to the bigger run. This is exactly what they want you to do.

Here's what the pricing sheet doesn't show you.

The real cost comparison

Take a three-flavor product with ingredients costing $0.60 per unit and film at $0.08 per unit. At 5,000 units per flavor, your total outlay is around $19,848 when you factor in storage, receiving fees, and the cost of capital. At 50,000 units per flavor, that number climbs to $149,520.

The co-packing "savings" at 50,000 units is $27,000. Your additional exposure is $129,672.

That's not a deal. That's a trap with a bow on it.

What first-year sell-through actually looks like

New DTC supplement and food brands without existing distribution or significant marketing spend typically sell through 10–20% of their initial inventory in year one. At 10% sell-through on 150,000 units, you've sold 15,000 units and have 135,000 sitting in storage accruing fees.

Storage at a typical 3PL runs $50–100 per pallet per month. 150,000 sachets is roughly 8 pallets. That's $400–800 per month, or $4,800–$9,600 per year — before you've proven the product sells.

The pivot cost nobody factors in

At some point in your first year, something will need to change. A label update. A formula tweak. A packaging requirement from a new retail buyer. A compliance issue you didn't know about. If you're sitting on 135,000 units of existing inventory, those units are now either a rework cost or a write-off.

At $0.86 fully-loaded cost of goods, that's $116,100 in stranded inventory.

What the right run size actually is

The right first run is the smallest run that gives you real market signal. At North Lakes, that's 5,000 units per flavor — enough to sell through in 60–90 days if the product has legs, enough to learn what's working, and small enough that if something needs to change, you're not writing off six figures to make it happen.

Run small. Prove it sells. Then scale it. The co-packing economics get better at volume — but only if you're still in business to enjoy them.

How to evaluate any MOQ

When a co-packer quotes you an MOQ, ask yourself three questions before you commit:

• What is my realistic sell-through in 90 days based on my current audience and marketing budget — not my projections?
• What happens to the remaining inventory if I need to change anything on the label, formula, or packaging?
• What does 12 months of storage cost on the inventory I won't sell in the first 90 days?

If the answers make the bigger run look less attractive, that's the math working correctly. The co-packer gets paid either way. You're the one carrying the risk.