Every small order you accept below your true cost threshold is a transaction where you lose money and tie up driver time that could be spent on a profitable delivery. Minimum order quantities are not arbitrary — they are break-even math.
The Break-Even Order Size Calculation
Add up per-delivery cost: driver labor for the route segment (20 minutes at $22/hour loaded = $7.33), fuel allocation ($4–$8), vehicle wear ($0.30–$0.50/mile, allocated by stop), and order processing overhead ($6–$12 per order). A conservative per-delivery cost is $18–$35. At 22% gross margin, you need $82–$159 in order value just to cover delivery cost. Set your minimum at 120–130% of your break-even value to cover variability.
MOQ Approaches: Dollar, Case, or SKU Count
Dollar minimums are the cleanest to communicate and enforce. "We have a $150 minimum order" is unambiguous. Case minimums work well when your product lines are relatively uniform in value. Most distributors in the $1M–$20M range are best served by a dollar minimum — easy to automate, easy to explain, directly tied to the economic logic.
Enforcement: Portal vs. Honor System
Honor system enforcement does not work. When minimums are enforced by a person making a judgment call, the policy gets waived constantly — because the person doesn't want the awkward conversation. Enforce minimums at the system level. If your ordering portal blocks order submission below the minimum (or adds a surcharge automatically), the policy is consistent and the enforcement conversation moves to "the system flagged your order — here is what to do."