• Sourcing Products in Vietnam: A How to Guide

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    Vietnam is finally maturing as a serious alternative for online sellers, sourcing products in Asia. Yet, Vietnam is not an option for everyone.

    In this article, you will learn what kind of products you can source in Vietnam, and how you need to approach Vietnamese suppliers once you’ve found one.

    You will also learn how to deal with sample orders, payments and quality control – and why you may find Vietnamese suppliers to be less enthusiastic than those in China.

    What kind products can I source in Vietnam?

    Below follows an overview of the categories in which Vietnam offers a relatively large number of suppliers.

    a. Apparel & Textiles

    The apparel and textile industry is well established in Vietnam. In fact, most of our customers currently sourcing products in Vietnam, are in the apparel and textile industry.

    Apparel manufacturers tend to have relatively wide product scopes. However, these are some of the more common products found in Vietnam:

    • Children’s Products
    • T-Shirts
    • Sportswear
    • Outdoor wear
    • Knitwear

    Vietnamese textiles suppliers are generally OEM manufacturers, meaning that they make products according to tech packs provided by their customers.

    vietnam sourcing

    b. Furniture & Home

    Vietnam is one of Asia’s largest furniture manufacturers. Mainly located in the southern parts of the country, Vietnamese furniture manufacturers are often focused on the following categories:

    • Wooden furniture
    • Rattan furniture
    • Living Room furniture

    Many Vietnamese furniture and houseware factories have a basic selection of ODM products. That said, most rely on OEM designs provided by their customers.

    c. Handicrafts

    Vietnam has a long tradition of handcrafting everything from baskets and wooden figurines, to clay pots and miniature ships.

    Many Vietnamese handicraft suppliers are relatively small, and can be found on either Alibaba.com – or one of the many trade shows in the country.

    d. Electronics

    As of today, Vietnam’s electronics manufacturing base is not nearly as strong as Guangdong province, in southern China.

    Further, many of the electrical components are imported from China, further eroding its potential as a manufacturing hub for electronics.

    That said, it’s getting there, and electronics is making up a big share of the exports that go through Vietnam’s main ports.

    Many exporters are foreign own (i.e., Samsung), and the local owned tend to be OEM manufacturers. I would still not expect them to be as open minded, and accustomed to working with small buyer’s, as those in Shenzhen and Guangzhou.

    But, given a few more years, I believe that Vietnamese OEM electronics manufacturers could become interesting for startups and small businesses.

    The electronics industry is crucial, as it tends to spawn subcontractors for other industries, such as watches, jewelry and even children’s products.

    e. Jewellry & Accessories

    The selection of jewellry and accessories manufacturers in Vietnam, is relatively small. That said, there are a number of manufacturers using locally made materials – creating jewellry styles that are hard to find elsewhere in Asia.

    A few examples follow:

    • Wooden jewelry
    • Amber jewelry
    • Stone jewelry
    • Buffalo horn jewelry
    • Sterling silver jewelry
    • Gold jewelry

    f. Children’s Products

    Looking to import toys and other children’s products from Asia? Then Vietnam can offer products you can’t really find elsewhere.

    At least when it comes to certain types and materials:

    • Wooden toys
    • Plastic toys
    • Stuffed toys
    • Puzzles

    Remember that you need to ensure compliance with all applicable children’s products safety standards, in your market. If you’re based in the EU, you need to ensure compliance with EN 71. In the US, CPSIA is mandatory.

    g. Materials & Construction

    Vietnam has a large plastics and construction materials industry. Many of these manufactures functions as subcontractors, to toys and electronics manufacturers.

    However, more and more of these factories are developing their own ODM products, and take on OEM orders from customers around the world.

    A few examples follow:

    • PE Tarpaulins
    • PE Woven Bags
    • PVC Fabric
    • PVC Foam Boards
    • PVC Sheets
    • PP Sheets
    • Acrylic Sheets
    • Canvas Sheets
    • WPC Flooring
    • EVA

    h. Packaging & Print

    Perhaps I shouldn’t have put this one at the bottom, because the printing and packaging industry in Vietnam is huge.

    Vietnam is probably the world leader for high quality (and competitively priced) product packaging, making bags, inlays, cartons, jewelry boxes, watch boxes and much more.

    Many packaging companies that first got established in China, have opened offices in Vietnam.

    Some of Asia’s leading print and packaging trade shows are also held annually in Vietnam.

    Which products cannot be found in Vietnam?

    The supplier base in Vietnam is, as mentioned, much smaller than in Mainland China. Many Vietnamese manufacturers still only operate as subcontractors for much larger companies, such as Samsung.

    China has been, and still is in many ways, the ‘everything factory’.

    It doesn’t matter what you look for, you’ll find it in China. No other country can match this, including Vietnam.

    Try to search for ‘Watches’ on Alibaba.com. You’ll find more than 2500 suppliers in Mainland China. Yet, not a single one in Vietnam.

    There are countless of products that simply aren’t manufactured in Vietnam today. Even if they aren’t complex to make, it takes years to build up the infrastructure of component and materials suppliers.

    As such, you cannot go into Vietnam with the assumption that ‘if it can be made, you’ll find it here’. That does work in China, though, for most products.

    Hopefully, we will see more subcontractors making the leap to create their own ODM products, like many of their Chinese counterparts in Guangdong and Zhejiang has done.

    If you are importing custom designed products, Vietnam is more attractive, as you are not limited to what the suppliers have already manufactured.

    How should I approach Vietnamese suppliers?

    Vietnamese supplier are not nearly as direct and open as their counterparts in China. I remember how I, at the age of 22, could (and still can) get a meeting with any sales manager and legal rep in China.

    In China, you don’t need a name. You barely even need a specification. The suppliers are always interested in meeting you. This is something many of us take for granted.

    This is not the case in Vietnam.

    In Vietnam, you need to build trust before you can even place an order.

    But who has time for that these days?

    Further, many Vietnamese suppliers also tend to be less willing to work with startups and small businesses.

    This is another issue for ecommerce entrepreneurs.

    In my opinion, Vietnamese manufacturers have to step up their game and become more accessible.

    It’s either that or play second fiddle to China for decades to come.

    Yes, Vietnam’s suppliers are developing, but factories in Shenzhen and Ningbo aren’t standing idle either.

    How does the process work once I’ve found a supplier?

    Overall, the manufacturing process when sourcing in Vietnam is the same as all other countries. Once you have identified a number of qualified suppliers,you need to order product samples.

    All suppliers must prove that they can actually manufacture the product according to your design and material requirements.

    Once you have an approved product sample, you should get a sales contract signed by the supplier, before transferring funds.

    The payment terms are also standard. 30% before production, and 70% after production.

    But, as always, the 70% balance payment is only made once you have verified the product quality through a quality inspection.

    Through our partner Sofeast, we offer quality checks in all major city in Vietnam.

    Sourcing companies and agents in Vietnam

    There are only a few established sourcing companies in Vietnam, but I bet there will be many more in the future.

    While we don’t have any cooperation with any Vietnamese sourcing company today, below follows an overview:

    Dragon Sourcing

    A well established sourcing and procurement consulting company, with an office in Vietnam. Their product expertise cover packaging, promotional, consumer and industrial goods.

    Dragon Sourcing does not only focus on Vietnam, but also provide sourcing services in many other countries in Asia, and beyond.

    Vietnam B2B Direct

    Based in Ho Chi Minh City (Saigon), Vietnam B2B Direct is one of the leading sourcing companies in Vietnam. They have more than 14 years of history in the country.

    They offer a wide range of sourcing and manufacturing services, as explained on their website.

    BDG Vietnam

    With over 10 years in the country, BDG Vietnam is the go to company for many medium to large sized companies – looking to either source products or set up their own factories in the country.

    Keep in mind that you can source Vietnamese suppliers directly on both Alibaba.com and Globalsources.com. Or, perhaps even better, visit one of the many trade shows that are held annually in Vietnam.

    Summary

    Vietnam is already a serious alternative to China. If you’re importing any of the products mentioned in this blog post, you should at least look into sourcing suppliers in Vietnam.

    That said, Vietnam doesn’t offer the same scope of products as China, but it doesn’t really have to either.

    Regardless of how the industry develops in the coming years, I hope that Vietnamese suppliers understand the need to be more accessible, and willing to work with tomorrows Daniel Wellington or Soundbrenner.

    Playing it safe, and only expecting to cut gold from already successful business, is not going to cut it

    Ready to import and launch your own product?

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    a. Private Label & OEM Product Manufacturer Lists

    b. Product Specification Templates

    c. Product Label Samples

    d. Compliance Document Samples

    e. Tutorials, Video Walkthroughs and Task Lists that guide you step-by-step through the entire process

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