Overhead MOQs are the Minimum Order Quantity in order to meet the fixed cost expenditure of running a factory.
Lets understand this with an example:
Assuming you are doing a particular women's sleepwear (image below)
Fabric : Satin
Styles : 5
Colors 5
Quantity per color per style : 100 pcs
Total Quantity = 5 x 5 x 100 pcs = 2500 pcs
Assume that you meet all the MOQs of fabric, production and trims successfully. However, the overhead charges that a factory can potentially charge you is $0.5
This means the factory can only allocate $1250 in fixed cost to produce these 2500 pcs.
While it $1250 may seem a lot but from even a small factory's point of view, this will not cover their costs - and as a result, they will have to decline the proposal to manufacture this order for you.
One popular way to work around this is - production upcharge and that should be a point of discussion between you (as a brand) and your factory (as a supplier)
