Why Do The Cost Of DMC Threads Vary So Much?

If you look to buy DMC threads, you’ll often find that the price will vary. This isn’t just an inter-country thing either, the prices of threads vary massively depending on where you live in the world. On Facebook recently someone asked why this was, and I jumped in with an answer. It turns out, that answer was wrong. So I want to dedicate this post to those who both set me straight, and led me down the weird path of finding out why prices vary so much.
 
So, I hear you ask, how much do they vary? Here are a few countries (converted to US dollars) with prices:
 

$0.49 to $0.56 – USA
$0.74 – Canada
$0.89 – UK
$0.89 – Australia
$1.00 – Portugal
$1.61 – France
$2.00 – Italy
$2.00 – Finland
$2.78 – Switzerland

thread plastic rings (source: DMC)
thread plastic rings (source: DMC)

The Rumors

Or more specifically, what I thought was the case. In the 1990s DMC was going through less than stellar times. The company thought this was in part due to its expansion of factories across the US, Asia, and Africa. They decided that they needed to concentrate on the heritage of the brand more, and rely on the “made in France” tag line. In order to do this, they closed down one of the US factories and brought their main thread manufacturing back to France.
The rumor, however, is that some threads are still made in the US and other factories. This is false. The Asian, African and non-French European factories do produce some of DMC’s stock, their six-strand threads are all made in France. The remaining US factory was shut down, and they are now just a warehouse.

Average Income

So with that in mind, the standard thought is why is it cheaper in countries other than France? Well, lots of reasons, but the first and most striking when it comes to France is a standard commercial decision. What can we sell them for?
To use an example, let’s take Portugal, selling at $1.00 a skein, and France, selling at $1.61 a skein. Both are in the EU with no import charges, both have the same regulations and sales tax. The difference is the average wage. On average France makes $10,000 more per citizen than Portugal does, meaning they can charge more for the same product in France than they can in Portugal. The Portuguese stores run at a lower profit per skein than France.

Country Competiton

The second reason is competition. Once again, let’s look at two European countries, France and the UK. Both once again have the same import tax, sales tax and have the same regulation. They also both have roughly similar average wages (in fact, the UK is higher by $5,000). However, despite all of the similarities, a skein in the UK is $0.82 cheaper than it is in France. The reason is a simple one; Anchor threads.
The biggest rival to DMC is Anchor threads, which was in the UK long before DMC got involved, meaning they have history here. And whilst they are no longer made in the UK (they are made in Germany after they combined with JP Coats) they are big competition. In fact, Anchor threads go for about $0.90 on average in the UK. DMC knew that in order to compete, they had to reduce their cost to just under that. Stores in the UK just run at a lower profit margin.

Regulations

The previous reasons are fairly striking in themselves, however, if you compare France with a country outside of the EU, like the USA or Canada, you see a MASSIVE difference in price. The above factors do have sway here as well, but there is also a large transport cost you have to add into the price, but despite that, North American threads are cheaper still. We’ll get into the US specifically later on, as there is another factor that impacts their price, so for now, we’ll talk about Canada, which sells at $0.80 less than France.
 
To many both inside of North America, and outside, there are a set of threads, 3773 to 3895 that are discountinued threads. This isn’t actually the case. Instead, some threads are only to be sold in North America. We go into detail in our post about why those DMC threads are discontinued, but in short, the dyes used in those threads are illegal in the EU, Australia, Switzerland, New Zealand, China, and many more. The US lags behind many countries on regulations. This can be specific dyes used as per the above example, or larger regulations, such as the traceability of products.
In the EU, in particular, there is large accountability on textiles to ensure the supply and manufacture is done in a sustainable way, that doesn’t take advantage of lower economic growth countries, and has no modern slavery involved. Therefore in order to sell textiles in the EU, you need to supply documentation about this and other regulations. These regulations cost money, lots of money. So much, that the cost of sending products to North America is not only cheaper but a lot cheaper, than filling out regulation paperwork.
That said, I hear you asking about Australia, which is cheaper than France. Well, in Australia, there are lots of Anchor threads being sold, they have a lower average wage, and the regulations aren’t as strict. This all means that they can compete on price in the same way the UK does.

Discontinued US only DMC threads (source: 123stitch.com)
Discontinued US only DMC threads (source: 123stitch.com)

Import Fees

Only three more reasons now, and this one can be a big thing, or small thing, depending on the country you’re in.
This time, we go to Switzerland, which pays a whopping $1.26 more than France, almost double the price, despite being in Europe, and in fact, bordering France. However, Switzerland isn’t part of the EU. This means they don’t have the same laws about trade that the rest of Europe does. In short, if you want to import into Switzerland, you have to pay a heavy fine.

Sales Tax

Now we get to more US specific pricing. There are two main things, but the first is inter-country pricing, and how you can vary by the price of up to 10c on a skein.
The US works a little like separate countries, in the sense that each state can set its own sales tax. In fact, each city, county, and municipal area can also change their sales tax, which can vary as much as 10% on the original price. In many places, there is one cost for the whole country, but in the US depending on where the store is, you can save a fair amount of threads.

Selling At A Loss

Finally, we come to the biggest cost difference going. This is usually why people ask on Facebook about cost; the US is super cheap. In fact, it can be cheaper to buy US threads and have them sent to a different country. There are two reasons. The first is that the US is a large market. In the same way that the UK has high competition from Anchor, the US has none. This, you would imagine, would hike up the price, but thanks to no competition and a large number of people buying, orders from stores are normally large. In addition, the US has a lot of “big box stores” that buy in supermassive volumes to sell across the country. In other countries, stores are usually smaller and can’t get bulk order discounts that the US stores can.
 
But the second reason is the biggest. In the US, DMC thread is usually sold at a loss or very close to wholesale prices. Most stores in the US are selling thread so low as they want you to come in and buy other, higher-margin products. This can be coupled with the fact that the US has a discount culture, meaning that whilst they have the lowest prices, unlike other countries, you can get further discounts on threads.
I won’t state who, but I spoke to someone that runs a small store, so does not get bulk discounts, who buys in at 46c a skein. The average sale price in her state was 50c a skein, meaning she gets only 4c of profit, before and extra discounts are applied. I spoke to a British store owner that has a profit margin of 40c after discounts are applied.
 
So there you have it, all the reasons that prices vary so much from country to country. We’d love to hear the price you pay for threads, and if any of you buy from different countries and import to get lower prices. Leave us a comment and we’ll update the list as we go!
In addition, we’d just like to say that there are cheaper embroidery threads which are a great alternative to DMC. But if you wanted to know, we also have a round up of the best places to get good DMC thread deals and if its worth buying second hand threads.

 

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