Ask the Experts - Sourcing from Vietnam

by Guest Contributor

I am looking for sourcing in the RTA (ready-to-assemble furniture) category out of Vietnam. Do you have any recommendations?

Thank you,

Milan

Dear Milan,

Thanks for contacting the Ask the Experts help desk.

I feel your question has two parts.

1. Any recommendations for specific suppliers?
2. Any general recommendations for dealing with suppliers of RTA in Vietnam?

Let me try to answer both questions.

Any recommendations for suppliers?

www.GlobalSources.com would be a good place to start looking for qualified suppliers. However, it does seem, in my experience, some suppliers on Global Sources are not as responsive you as would expect in cases where your order sizes are small. So try to match your order size with factory size before you go and try to contact dozens of suppliers via Global Sources. Or better yet, check out Global Sources’ MATCH service and let GS pre-qualify some vendors for free!

Any general recommendations for dealing with suppliers of RTA in Vietnam?

One of the most important steps in any sourcing endeavor is the due diligence to establish that the suppliers you’ve targeted are actual suppliers, have the ability and experience to actually produce the product you require (especially for your target market), and that they are a good fit for the buyer in terms of best value (price, quality, lead time) and that they are truly interested in your business. For Vietnam, this last part can be the toughest to establish.

While furniture manufacturing is an established industry in Vietnam as the raw materials come from readily available sources, the lower number of available factories (compared to China) allows them to be more choosy on who they take on as new customers. They have the luxury of focusing on larger buyers with bigger, consistent orders. It can also require a long time for samples, especially custom made samples or new products.

As with most suppliers in SE Asia, be prepared to take the lead on all project management activities as for updates on your production order. Once you have selected your supplier and approved the samples, be certain to have a proper bilingual purchase contract (this may include codes of conduct, quality terms, warranty, tooling/mold issue and more. The PC is sometimes referred to as a “Purchase Agreement”, “OEM Agreement” or “Supplier Contract”) and purchase order in place before transferring any monies to the suppler. Confirm pricing, lead times, quality inspection and acceptance criteria and any penalties for missed deadlines or quality issues. Finally, make sure that all materials meet the requirements for the intended target market. This include accessories such as cushion or pillows that contain material that must pass fire retardant requirements for example.

This is all under normal circumstances. However, things in Vietnam are not anywhere near normal at the moment. Another round of Covid has closed many factories temporarily. Others have gone out of business. Responsiveness from suppliers is at an all-time low. Samples can take many months to receive. Containers are stuck in ports. If you can get a container out, sometimes the cost of shipping is more than the value of the cargo inside. It’s quite a mess there at the moment.

Answered by Brian Garvin

China-based since 2003.

Senior Business Advisor: www.AsiaBridgeLaw.com

Founder: B. Garvin Sourcing

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