Small Order Fee

Small Order Fee (LTM Fee) Explained: Why Custom Medal Factories Charge Extra for Low Quantity Orders

When ordering custom medals, many buyers are surprised to see an additional charge called a Small Order Fee, LTM Fee, or Below MOQ Charge on their quotation.

You may wonder:

“Why do I need to pay extra if I only order a small quantity of medals?”

The answer is simple: even a small custom medal order still requires almost the same production setup as a large order.

In this guide, we’ll explain what an LTM Fee means, why factories charge it, and how you can reduce or avoid it when ordering custom medals.

What Is an LTM Fee?

LTM Fee stands for Less Than Minimum Fee.

It is an extra charge applied when your order quantity is below the manufacturer’s Minimum Order Quantity (MOQ).

For example:

If a custom medal factory has a MOQ of 100 pieces, but you only need 30 medals, the factory may apply an additional fee to cover setup and production costs.

In the custom medal industry, this fee may also be called:

• Small Order Fee
• Below MOQ Charge
• Low Quantity Surcharge
• Setup Fee
• Mold Fee
• Tooling Fee

Although the wording may vary, the purpose is generally the same: to cover fixed production costs for low-volume orders.

Why Do Custom Medal Factories Charge a Small Order Fee?

Many customers assume producing 30 medals should cost much less than producing 300 medals.

However, in reality, factories still need to complete the same preparation process regardless of quantity.

1. Mold Creation Cost

Custom medals require a dedicated mold or die.

Even if you only order 20–50 pieces, the factory still needs to:

• Prepare artwork
• Create production mold
• Set up engraving or stamping tools
• Test the production line

This setup cost exists whether the order is large or small.

2. Machine Setup and Production Preparation

Before production starts, factories must:

• Prepare machines
• Adjust metal stamping settings
• Match plating colors
• Prepare enamel colors
• Conduct quality checks

These are fixed labor and machine costs that do not disappear with smaller quantities.

That’s why factories may charge a Setup Fee or Small Order Fee.

3. Labor Cost Is Similar

A factory employee still needs to:

• Review your artwork
• Arrange production files
• Handle plating and coloring
• Perform quality inspection
• Package your medals

Even small custom medal orders require professional handling.

Common Terms for Small Order Fees in International Trade

Here are the most common terms used in the custom medal manufacturing industry:

Among these, LTM Fee and Small Order Setup Fee sound the most professional in international business communication.

Example: How an LTM Fee Works

Imagine you want to order 50 custom marathon medals.

A medal factory normally requires:

MOQ: 100 pieces

Because your order is below the minimum quantity, the quotation may include:

• Medal Production Cost
• Mold Cost
• Shipping Cost
• LTM Fee ($30–$80)

Typical quotation example:

“Since your order quantity is below our MOQ, a Less Than Minimum Fee (LTM Fee) of $50 will be applied.”

This is standard practice in the custom manufacturing industry.

How to Avoid Paying a Small Order Fee

Here are several practical ways to reduce costs:

Increase Your Order Quantity

The easiest way is to order above MOQ.

For example:

Instead of ordering 50 medals, increase to 100 pieces.

In many cases, the unit price becomes lower and the small order fee is waived.

Example:

“The small order fee will be waived if the order quantity exceeds 100 pieces.”

Combine Multiple Designs

If possible, combine your order with another event or future requirement.

This helps spread the mold and setup costs across more pieces.

Ask About Stock Medal Options

Some suppliers offer existing medal bases that reduce mold costs.

This can lower your setup fee significantly.

Is a Small Order Fee Reasonable?

Yes — in most cases, it is completely reasonable.

A small order fee is not a penalty.

Instead, it helps manufacturers cover:

• Production preparation
• Machine setup
• Mold cost
• Labor cost
• Quality control

Without it, factories may lose money on very small custom orders.

Reliable suppliers usually explain this fee clearly before production starts.

Final Thoughts

If you are ordering custom medals for schools, marathons, cycling races, sports clubs, or corporate events, understanding the LTM Fee (Less Than Minimum Fee) helps you budget more accurately.

While small order fees may seem like an extra cost at first, they are actually a normal part of custom manufacturing.

The good news?

Many suppliers will waive the fee once your quantity reaches MOQ, helping you save more in the long run.

If you are planning a small quantity custom medal order, always ask:

“Do you charge any Below MOQ Fees or Setup Costs?”

This simple question can help you avoid surprises and choose the best supplier for your project.