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When it comes to OEM, the biggest concern for most people is probably the production MOQ.
Many clients want to start with test marketing, so they prefer to produce in small lots at the beginning.
In general, the minimum lot size is 1,000 units.
For our growth factor ampoule (bulk essence) series, production from 500 units is also possible.
Technically, even smaller lots can be produced.
However, a smaller lot does not mean a lower cost. In fact, the cost per unit becomes significantly higher.
Why Small Lots Are More Expensive
1) Lower Manufacturing Efficiency
Each time we manufacture a product, cleaning and preparation processes are required before and after production.
With small lots, these fixed processes remain the same, which reduces efficiency and increases overall costs.
2) Higher Costs for Labels and Boxes
For example, when printing 1,000 boxes, the factory does not print exactly 1,000 pieces.
To adjust and stabilize the color, several hundred extra sheets are printed before and after calibration. From those, 1,000 properly color-matched boxes are delivered.
If:
- 1,000 boxes cost 80 JPY each → Total: 80,000 JPY
- 100 boxes could cost around 800 JPY each → making them much more expensive per unit
For quantities under 1,000 units, box printing may not even be possible, so labeling is used instead.
This adds additional label costs, and with smaller quantities, the unit price becomes even higher.
3) Minimum Bulk Production Volume
Most factories use mixing tanks with a minimum capacity of around 30 kg.
Therefore, the minimum bulk production is typically 30 kg.
Stable emulsification is also essential.
Emulsification is the process where water and oil—which normally do not mix—are dispersed into fine particles and uniformly blended. Creams and cleansing products are typical examples.
If emulsification is done in a smaller tank, uneven mixing can occur, leading to stability issues such as reduced viscosity after several months.
For 500-unit bulk products that do not require emulsification and mainly involve simple blending of ingredients, small-lot production is possible.
However, for products like creams and cleansers, the minimum batch is generally 30 kg.
To be honest, producing 500 units of cream is technically possible.
But many people assume that producing 500 units means manufacturing exactly 500 units’ worth of bulk.
Due to stability requirements, we must produce 30 kg at once. The remaining bulk would need to be discarded.
As a result, costs increase significantly and waste becomes substantial, so we do not recommend this approach.
It is similar to the box-printing example.
For example:
- 1,000 units × 300 JPY = 300,000 JPY
- 500 units × 600 JPY = 300,000 JPY
One of the most common reasons OEM discussions stop is due to box and label costs.
Japan is known for its high quality, and we can produce excellent packaging, including gold foil and silver-embossed boxes.
However, the reality is that costs are also high.
A smaller lot size does not mean a lower total cost.
Production of 100 units is possible, but the cost per unit becomes extremely high.
For this reason, we recommend starting from 1,000 units.