Manufacturing Costs & Challenges: Comparing Europe and China

Posted on 2 Comments

Manufacturing Comparison Europe and China

In September 2021 we gathered price data and other relevant information from suppliers in China and various EU countries. The purpose was to determine how suppliers in China and Europe differ in terms of the following:

  • Unit price
  • Minimum order quantity (MOQ)
  • Product sample costs
  • Response rate

Product information

We created two separate children’s product specifications. Both were custom-designed products made using a printed fabric.

  • Product: Children’s clothing (2 SKUs)
  • Material: Organic cotton

Supplier selection criteria

We only sourced GOTS-certified children’s clothing manufacturers. This way we can be somewhat certain that both suppliers in the EU and China are sophisticated manufacturers.

  • Product scope: Children’s clothing
  • Type: Manufacturer
  • Certification: GOTS

Selected suppliers

Countries# Suppliers
China (Mainland)9
EU: Portugal, Greece, Croatia, Hungary, Poland12

Requested information

We requested this information from the suppliers for the 2 SKUs:

  • Unit price*
  • MOQ
  • Sample cost

*Based on their MOQ per order/size

Table A: China Suppliers

SKU ASKU B
Supplier AUnit Price: $4.5
Sample cost: $250
MOQ: 3000 pcs
Unit Price: $3.5
Sample cost: $250
MOQ: 3000 pcs
Supplier BUnit Price: $4
Sample cost: $500
MOQ: 5000 pcs
Unit Price: $1.5
Sample cost: $500
MOQ: 5000 pcs
Supplier CUnit Price: $7
Sample cost: $140
MOQ: 1000 pcs
Unit Price: $4.5
Sample cost: $140
MOQ: 1000 pcs
Supplier DUnit Price $6.5
Sample cost: $260
MOQ: 1000 pcs
Unit Price: $3
Sample cost: $260
MOQ: 1000 pcs

Notes

1. 4 out of 9 suppliers responded to the RFQ

2. The prices have been rounded

3. Prices quoted in US dollars

Table B: EU Suppliers

SKU ASKU B
Supplier AUnit Price: €9.5 ($10.72)
Sample cost: €200 ($225.73)
MOQ: 300 pcs
Unit Price: €7 ($7.9)
Sample cost: €200 ($225.73)
MOQ: 300 pcs
Supplier BUnit Price: €12 ($13.55)
Sample cost: €230 ($259.59)
MOQ: 1000 pcs
Unit Price: €12.5 ($14.11)
Sample cost: €250 ($259.59)
MOQ: 1000 pcs
Supplier CUnit Price: €14.5 ($16.37)
Sample cost: €200 ($225.73)
MOQ: 400 pcs
Unit Price: €9 ($10.16)
Sample cost: €200 ($225.73)
MOQ: 400 pcs
Supplier DUnit Price: €9 ($10.16)
Sample cost: €50 ($56.44)
MOQ: 2000 pcs
Unit Price: €6 ($6.77)
Sample cost: €50 ($56.44)
MOQ: 2000 pcs

Notes

1. 4 out of 12 suppliers responded to the RFQ

2. The prices have been rounded

3. Prices quoted in EUR and converted to USD on 2021-12-10

Comparison

ChinaEU
Unit price (SKU A)
Average
$5.5$12.7
Unit price (SKU B)
Average
$3.125$9.735
MOQ
Average per SKU
2500 pcs925 pcs
Sample cost
Average
$287.5$191.8
Response rate44%33%
Shipping cost
Assumed quantity: 500 pcs
60 x 60 x 100 (cm) 70 kgs
UPS air freight
Total: $1,894.34
Per unit: $3.78
Origin: Shanghai, China
Total: $613.31
Per unit: $1.22
Origin: Lisabon, Portugal

Notes

1. The product cost is significantly higher in the EU compared to China

2. The freight costs are significantly higher when ordered from suppliers in Asia. This narrows the total cost between manufacturing in the EU and China.

3. The supplier response rate is notably higher in China

4. The MOQ is higher in China, at least for this product category and materials

5. The sample cost difference is too small to draw a conclusion

6. There is no clear “winner” in this case study

  • Free Webinar

    Need help finding suppliers for your product?

    • We can help you source suppliers in the following areas:
    • 1. US & Mexico
    • 2. European Union
    • 3. Turkey

    SCHEDULE A VIDEO CALL WITH US



    We can help you find suppliers in the Americas & Europe


    Important information:

    1. We are not affiliated with any of the companies listed in this guide. We have selected these companies based on their claimed product scope, history, certification, and capabilities (Learn more).

    2. We only list companies offering manufacturing services to external buyers, not brands using external manufacturers or brands with production facilities exclusively used for themselves.

  • 2 Responses to “Manufacturing Costs & Challenges: Comparing Europe and China

    1. Adwoa at 7:20 am

      Hello. I am having trouble signing up for Free Webinar: Manufacturing in the Americas, Europe & Turkey. Is this webinar still available please.

      1. Fredrik Gronkvist at 6:21 pm

        Hi Adwoa,

        Yes, it is. Which browser are you using?

    Comments are closed.

    Manufacturing Case Study (PDF)

    This case study helps you understand if manufacturing in Europe, Turkey, or Mexico is a cost-effective and viable option for your products.