Are you trying to decide whether you should manufacture your products in Europe or China? In this guide, we compare production costs, MOQ requirements, and sample costs between factories in both Europe and China. We also take other factors into consideration, such as the response rate, shipping costs, customs tariffs, and lead times.
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Product case study
In 2021, we were tasked with sourcing children’s clothing made of organic cotton. The buyer was interested in comparing supplier options in both China and Europe. The buyer had a preference for sourcing within the European Union, but this hinged on the price and MOQ.
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
We only sourced GOTS certified children’s clothing manufacturers. This way we can be somewhat confident that both suppliers in the EU and China are qualified manufacturers.
- Product scope: Children’s clothing
- Type: Manufacturer
- Certification: GOTS
Selected suppliers
| Countries | # Suppliers |
| China (Mainland) | 9 |
| EU: Portugal, Greece, Croatia, Hungary, Poland | 12 |
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: EU Suppliers
| Product A | Product B | |
| Supplier A | Unit 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 B | Unit Price: €12 ($13.55) Sample cost: €230 ($259.59) MOQ: 1000 pcs</td> | Unit Price: €12.5 ($14.11) Sample cost: €250 ($259.59) MOQ: 1000 pcs |
| Supplier C | Unit 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 D | Unit 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.
Table B: China Suppliers
| Product A | Product B | |
| Supplier A | Unit Price: $4.5 Sample cost: $250 MOQ: 3000 pcs | Unit Price: $3.5 Sample cost: $250 MOQ: 3000 pcs |
| Supplier B | Unit Price: $4 Sample cost: $500 MOQ: 5000 pcs | Unit Price: $1.5 Sample cost: $500 MOQ: 5000 pcs |
| Supplier C | Unit Price: $7 Sample cost: $140 MOQ: 1000 pcs | Unit Price: $4.5 Sample cost: $140 MOQ: 1000 pcs |
| Supplier D | Unit 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.
Response rate
Only a third of the European suppliers responded to the request for quotation. This pattern is typical when contacting suppliers in Europe, as they seem to be more selective with potential buyers. It should also be noted that the buyer was a new brand, without their own company email address.
The response rate could likely have been improved if the buyer had their own company website and email address set up at the time of the RFQ.
The Chinese suppliers were more responsive.
Shipping costs
Our research demonstrated that the shipping cost would be significantly lower if manufacturing in Europe compared to China.
Assumed values
- Assumed quantity: 500 pcs
- 60 x 60 x 100 (cm) 70 kgs
- UPS air freight
- Destination: London, UK
EU
- Total: $613.31
- Per unit: $1.22
- Origin: Lisabon, Portugal
China
- Total: $1,894.34
- Per unit: $3.78
- Origin: Shanghai, China
Note: This case study took place during the height of the pandemic, which had driven up shipping costs to new heights. As such, the difference is likely smaller today.
Comparison
| China | EU | |
| Unit price (SKU A) Average | $5.5 | $12.7 |
| Unit price (SKU B) Average | $3.125 | $9.735 |
| MOQ Average per SKU | 2500 pcs | 925 pcs |
| Sample cost Average | $287.5 | $191.8 |
| Response rate | 44% | 33% |
| Shipping cost Assumed quantity: 500 pcs 60 x 60 x 100 (cm) 70 kgs UPS air freight Destination: London, UK | 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.
Other factors
Production time
We could not find any patterns that indicate that suppliers in China or Europe had a longer production lead time. On average, most suppliers set the production time at around 50 to 60 days.
At the time, some European suppliers had a waiting time before they could start production – but this was likely unique for these suppliers or caused by a backlog of orders during the pandemic.
We have not seen this pattern since.
Shipping time
A clear benefit of manufacturing in the EU, as long as the destination is in the EU or the UK, is the shorter shipping lead times. The delivery could be completed in only 4 to 5 days.
Meanwhile, ocean freight from China would take at least 50 days when factoring in cargo loading and unloading in both the port of departure and port of destination.
Faster deliveries also mean that you can stock up more quickly, which can be a game changer for new brands.
Customs tariffs
Another benefit of manufacturing in the EU, assuming the buyer is located in the EU or the UK, is the absence of tariffs. Apparel imported from China often has a tariff set at around 8 to 12% of the product value – a cost that can be saved when you manufacture closer to home.
Currency
EU buyers have the benefit of paying suppliers in their own currency. This reduces the risk of currency fluctuations compared to transactions settled in US dollars – which is the currency normally accepted by Chinese manufacturers.
Conclusion
Our conclusion is that manufacturing in Europe is more expensive on a per-unit basis compared to China. However, manufacturing in Europe offers faster deliveries. The lower shipping cost and no tariffs also even out the difference between a product made in Europe vs China.
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