Sourcing from China is old news, Vietnam new news?

[biophase]

I have a lot of contants telling me that Vietnam is the better sourcing these days than China.

Anyone have experience with this? I did some brief research and it does seem Vietnam is an up and coming power house. Trump is actually visiting there soon.

Just curious if anyone knew anything about this as it might be a better source for products in the near future.

Just go with whatever country makes what you need.

 

[biophase]

It's not very useful to say "check the whole world and see where you can get the best products" is it?

And this is what separates the average from the great...

You wouldn't check the whole world, but I would. You end up with a product from China at $3, I end up with one at $1 from Africa, and you are scratching your head going, "how does he even make money at that price?".

I have a product that is made in India that China can't even touch. India is half the price. I also have another product that is made in Pakistan that is 1/4 the price in China. He told me that the China manufacturers just buy from him and sell it to the people as if they made it.

 

[Walter Hay]

I have posted many times about the desirability of sourcing outside of China. I have also written about the move to reshoring as Chinese labor costs rise and many Western companies discover that they can manufacture competitively compared to China.

The article posted above by @Beijijng is not completely correct regarding labor costs being a significant portion of production cost. That is often the case but as a generalization it goes way too far. Many products made in China now have relatively low labor input. This partly explains the move towards reshoring.

Those who have read my AMA and my book know that I have long advocated sourcing in countries other than China. In this post GOLD - Sharing my lifetime experience in export/import. Product sourcing specialist. I answered a question as to which country I thought might be the next China and I answered that Vietnam would be my first choice.

My long time contacts in China have long ago begun moving production to Vietnam and Cambodia.

I first sourced products from Vietnam in the mid 1990's. Product quality was excellent, price was great, and the goods were always exactly to specifications, but I knew who I was dealing with. Locating suppliers in Vietnam is not easy, and this deters many people who want to take the easy way to source products. Using Alibaba's filter to find suppliers in Vietnam is not a lot of help unless you are a gambler, because you will find very few Assessed Suppliers by that means. Basically this means your due diligence on suppliers there will be extremely difficult.

There are some expat Americans and Australians providing sourcing services in Vietnam, but they won't look at anything under container lots.

Walter

 

[MJ DeMarco]

Interesting when two posts somewhat expose a mentality...

wondering if there's some major opportunity to be had here.

One exposes money-based orientation...

Is there opportunity? New products where I can make some money because Vietnam will be one buck cheaper?

I still don't understand your question meaning... ok so Vietnam is the new China. So now what? How does that change your search for a manufacturer? Are you going to check the Vietnam box instead of the China box on Alibaba? You should have already been looking there! This is why I don't understand your question. You should have been looking everywhere, not just some place because everyone says to look there.

The other exposes value-based orientation...

I'm solving a problem and need a solution. I'll go with the best, no matter where I can find it. Could be China or Vietnam.


PS: @StevieB -- No, I don't think you're a money-chaser! Just demonstrated an interpretation based on the things we say and focus on.

 

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[JasonR]

Locating suppliers in Vietnam is not easy, and this deters many people who want to take the easy way to source products. Using Alibaba's filter to find suppliers in Vietnam is not a lot of help unless you are a gambler, because you will find very few Assessed Suppliers by that means.

I think this is the key point.

Having been to both countries several times, it's easy to see why Vietnam isn't as popular as China. One, the population is a fraction of China's, and two the English is poor, and the Vietnamese aren't up to speed on the opportunities of the internet (but they aren't far behind). There are good factories in Vietnam, but you're going to need boots on the ground to find them, and you'll almost certainly want to visit them. You can get away with not visiting factories in China, although I still recommend it. I visited 5 factories for ONE product in China and I learned so much that I couldn't on a web browser.

In the end, Biophase is right: source from wherever you need from. Perhaps, you start in China and end up using Vietnam, Thailand or Cambodia down the line.

I do implore to visit your factories. You'll learn so much about the culture, products, factories themselves and the people you're working with than you ever could behind a keyboard.

 

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[SquatchMan]

Very true, but I was more curious as to what experiences others have had from Vietnam. There's tons of threads sourcing from China, and of course Alibaba... but Vietnam doesn't seem to have the equivalent there for a product source perspective.

Become the expert that makes the thread on sourcing products from Vietnam.

@Walter Hay is definitely the person to ask on sourcing products though.

 

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[biophase]

Yup. I had other idea's but the market is starting to sense a new source of products.... wondering if there's some major opportunity to be had here.

I still don't understand your question meaning... ok so Vietnam is the new China. So now what? How does that change your search for a manufacturer? Are you going to check the Vietnam box instead of the China box on Alibaba? You should have already been looking there! This is why I don't understand your question. You should have been looking everywhere, not just some place because everyone says to look there.

 

[AgainstAllOdds]

You're doing it backwards.

Find a need. Find who can fill that need. Pick whomever provides the most value.

Let's run through an example:

You can do it your way:
You sell wine. Your friends tell you that Vietnam is the new China. You go to Vietnam and realize that there's no one selling wine. You're screwed. No supplier.

Or you can do it the right way:
You sell wine. You make a list of all the countries that are large wine producers. You get prices from suppliers in all the countries. You choose the vineyard that can provide the most value to you. You're happy.

If you don't even have a product then what you're doing is pure mental masturbation. Stop action faking. Find a need. Then find a supplier that can help you fill that need.

 

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[Beijing]

Allow me to quote from the best China blog on the Internet:

With rare exceptions, American and European companies have goods made in China for one reason: because it’s cheaper. Why is it cheaper? Because labor is so much cheaper in China than in the US and Europe, and labor is a significant portion of the production cost. But over the past several years, wages have been steadily rising in China, making Chinese factories progressively less competitive on labor costs. Meanwhile, numerous pundits have made predictions about manufacturing work fleeing China for countries with lower labor costs, and especially Southeast Asian countries like Vietnam or Myanmar. A corollary prediction calls for more reshoring – bringing back manufacturing to the United States.

But the mass exodus from China hasn’t occurred. Thus far most of the manufacturing moving to Southeast Asia has been either redundant manufacturing (i.e., to have an alternate source of production in case something goes awry in China) or manufacturing for goods lower on the value chain. And the reshoring movement is still finding its feet.

China has maintained its competitive advantage in a number of ways. For one thing, it has made enormous investments in infrastructure: raw materials, components, and finished goods travel rapidly and consistently to, from, and within China via a vast web of ports, railways, and highways. None of its competitors come close. Additionally, China’s status as the factory of the world means its factories (and many of its cities) have developed tremendous expertise and specialization. They may have been the cheapest before, but now they’re the most experienced – and sometimes even the most efficient.

https://www.chinalawblog.com/2017/10/china-manufacturing-and-robots-and-oems.html

 

[Walter Hay]

For those of you guys here who source from south east asian countries or from places like pakistan etc, don't you have this nagging fear that one day, due to political strikes or unrest, it could cripple your operations (law of control)? I know this can happen anywhere, but in the case of these countries, it feels more likely.

Also, for my case, between US and south east asian suppliers, I find that the latter is more unresponsive and unorganised when it comes to correspondence (emails etc.,), the other issue is language.

It might depend on product, but so far, I haven't been impressed by the quality of the material samples these S.E. asian countries have shown me, even though I'm VERY IMPRESSED by their prices lol

That is a very real risk. There are also other possible reasons for disruption to supply, as demonstrated by the current crack down on polluting factories in China.

Chinese factories can produce high quality stuff. When I first began importing in 1987 the product quality I obtained was far superior to what I had been buying locally. I knew what to expect when I ordered because I had visited the factories, and through spending time with the owners I had made it clear that I required the best quality control, and I obtained genuine assurances about that. Rarely did they fail me, and when they did, my good relationship with them meant free replacements without having to return the faulty goods.

In passing I must emphasize that it is essential that buyers act in good faith when making claims, and if possible offer at least small concessions to help the supplier save face. Suffer a small loss now and gain in the future. Never express anger. Always find something good to say.

Regarding communication problems, I have a lot to say about that in my book, particularly regarding choosing the right words so that you will not confuse your supplier, but at least remember that you might be one of thousands of customers, and time zone differences do slow communication.

Walter

 

[MattR82]

I'm sure there is.
The notorious copycats syndrome do not seem to be very fierce in Vietnam as compared with China.

Just wait

I love VN but their business sense and attitude to money is atrocious. No need to make more money legitimately from recurring sales when you can just rip them off first time for a fraction of what you could have made! I know that sounds bad, but anyone who has lived here will tell you it's a big problem. It's getting better though, but I wouldn't rely on them doing things much different to China (heck, it will probably end up being a Chinese run factory just located in nam?)

There's actually an interesting discussion to be had on why that's the case but maybe it's not for this thread.

Back on topic. If this thread gains momentum and anyone needs a man in nam, I may be happy to help. Full plate at the moment but it sounds interesting.

 

[Walter Hay]

And this is what separates the average from the great...

You wouldn't check the whole world, but I would. You end up with a product from China at $3, I end up with one at $1 from Africa, and you are scratching your head going, "how does he even make money at that price?".

I have a product that is made in India that China can't even touch. India is half the price. I also have another product that is made in Pakistan that is 1/4 the price in China. He told me that the China manufacturers just buy from him and sell it to the people as if they made it.

@biophase I like the attitude that says you will keep searching. Why not? It's your money you are spending, so surely the effort to get the best price is worthwhile. I have always believed that profit begins with buying. Buy at the best price and your profit potential is obviously greater than it is for those who don't make the effort.

You have highlighted a major cause of dissatisfaction, frustration and failure. Unlike you, most people expect to see the money just roll in. It's all about the work ethic, and sadly that is relatively poor in today's society.

What you describe is commonplace and it works both ways. Traders are opportunists and will buy from India, resell in China via Alibaba and vice-versa. I once obtained a great sample from an Indian "manufacturer", but I recognized tell-tale signs in the item that told me it was made in China, and in fact I knew which factory produced it.

It helps to know the industry sector you are dealing with.

Walter

 

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[Walter Hay]

I was thinking more on becoming a platform to source items from Vietnam for a B2B when I mentioned 'wonder if there's some opportunity there' (just went completely off the original topic from that comment though).

@biophase

Yes, very true I'm fairly new to sourcing products -- it's more of were to start in order to 'look all over the world' short of just searching on Alibaba. It seems @Walter Hay has a book which seems to be a good place to start.

Interesting that you can get products cheaper in various other countries and China even buys them and becomes the middle man in some cases... when suppliers think they're getting them wholesale.

Thank you for the information.

The modern internet connected world of importing and exporting has attracted huge numbers of opportunists who help obscure the realities and they and the old hands at the game don't really want those realities to become apparent.

The reality is that Middle men have been operating in international trade for centuries. Marco Polo, who traveled to China about 700 years ago became extremely wealthy importing Chinese products. Merchants such as he were relatively few in number compared to the enormous number of small producers whose wares they bought and re-sold. Middle men now vastly outnumber the factories that produce what is being sold.

The use of the word "WHOLESALE" blinds many people and they accept the word on face value. When you consider Alibaba as an example, the vast majority of suppliers listed as manufacturers are in reality traders. They succeed because even their inflated prices look good to inexperienced Westerners, who think they are buying wholesale.

Yes @StevieB, my book has been found by thousands of newbie importers to be a good place to start, and among other things it shows you how to see through the smoke and mirrors and learn how to tell who is who.

My general advice when sourcing is to not believe everything you read on B2B sites. Check everything.

Walter

 

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[ZF Lee]

Yup. I had other idea's but the market is starting to sense a new source of products.... wondering if there's some major opportunity to be had here.

I'm sure there is.
The notorious copycats syndrome do not seem to be very fierce in Vietnam as compared with China.

 

[MattR82]

I moved to Vietnam 6 months ago. Hanoi.

Vietnam is on the move, that's for sure, so I'm not surprised to hear this. APEC is next weekend in Hanoi actually.

 

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[Walter Hay]

I think this is the key point.

Having been to both countries several times, it's easy to see why Vietnam isn't as popular as China. One, the population is a fraction of China's, and two the English is poor, and the Vietnamese aren't up to speed on the opportunities of the internet (but they aren't far behind). There are good factories in Vietnam, but you're going to need boots on the ground to find them, and you'll almost certainly want to visit them. You can get away with not visiting factories in China, although I still recommend it. I visited 5 factories for ONE product in China and I learned so much that I couldn't on a web browser.

In the end, Biophase is right: source from wherever you need from. Perhaps, you start in China and end up using Vietnam, Thailand or Cambodia down the line.

I do implore to visit your factories. You'll learn so much about the culture, products, factories themselves and the people you're working with than you ever could behind a keyboard.

@JasonR, Although my book sets out to help people safely source without leaving home because they don't have the finances to travel, I strongly agree with your advice about visiting factories. I have posted on the subject in my AMA.

There is nothing better than being there, seeing the factories, handling the products as they come off the production line, not just looking at well prepared samples. There's also the massive value in building personal relationships with suppliers.

Walter

 

[StevieB]

I have a lot of contants telling me that Vietnam is the better sourcing these days than China.

Anyone have experience with this? I did some brief research and it does seem Vietnam is an up and coming power house. Trump is actually visiting there soon.

Just curious if anyone knew anything about this as it might be a better source for products in the near future.

 

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[Raoul Duke]

There's actually an interesting discussion to be had on why that's the case but maybe it's not for this thread.

The horror! The horror!

 

[MattR82]

That's so weird, the impact it had on critical thinking is exactly what we were talking about (in conversations on this matter with Vietnamese and Western friends) the other day. Communist gov't discouraged it would be a nice way to put it.. they've definitely been through a lot. So it's good to see Vietnam starting to emerge now.

 

[ZF Lee]

Interesting when two posts somewhat expose a mentality...



One exposes money-based orientation...

Is there opportunity? New products where I can make some money because Vietnam will be one buck cheaper?



The other exposes value-based orientation...

I'm solving a problem and need a solution. I'll go with the best, no matter where I can find it. Could be China or Vietnam.


PS: @StevieB -- No, I don't think you're a money-chaser! Just demonstrated an interpretation based on the things we say and focus on.

I am more concerned on building a supplier system that has integrity and that won't rip you off rather than merely cheap lol...

It's painful to work things out, only to be duped by a ripoff and your value proposition is put in jeopardy.

If something is way too cheap, of course you might wonder about their facilities, their costs and what is really going on there.

 

[Sanj Modha]

Vietnam is on the rise. I have a friend who flew out there to meet suppliers recently.

I personally don't care where the product is made. It's all about price vs quality vs logistics for me. Every country will have it's +/-

I use factories in China, Thailand, India and the US. They all bring something different to the table.

 

[biophase]

I was thinking more on becoming a platform to source items from Vietnam for a B2B when I mentioned 'wonder if there's some opportunity there' (just went completely off the original topic from that comment though).

@biophase

Ok, but why would this pop up as a business opportunity for you? You just heard that Vietnam is an up and coming country to source. It may be an opportunity for someone, sure. But do you have experience in creating this type of website? How would you get factories in Vietnam to join your website? Why would it be better than Alibaba? Do you have an edge in any of this?

You can't look for a business this way. It's like me saying, wow Bitcoin is doing great, I'm going to start my own ICO. I have absolutely no experience in any of the pertinent categories to get this off the ground. But someone else, who has experience could probably launch an ICO.

 

[MattR82]

Had a chat to @StevieB and as you kind of have a connection to Vietnam in your personal life I can see why it entered your mind. I was interested because I now live here and find the process pretty fascinating after reading Walters book and making a trip to Shenzhen once to visit a factory. I have to admit, when I was there, I was thinking of how much easier it would be if you lived there. And @JasonR is right, visiting a factory on site was a great experience. Went down exactly as Walter said it would, and more than just being able to tell if they were a manufacturer or distributor. Being able to see it being made and put together (Or not) and touching it was interesting.

But it wouldnt be smart of ne to disagree with @biophase on this topic haha so I will accept that I got caught up in the wrong way of thinking. That's why I'm on this forum and love it so much. Still learning and have to get checked every now and then.

@Walter Hay 's book is pure gold for anyone that's reading this. Can't recommend it enough.

 

[RobD88]

I have a lot of contants telling me that Vietnam is the better sourcing these days than China.

Anyone have experience with this? I did some brief research and it does seem Vietnam is an up and coming power house. Trump is actually visiting there soon.

Just curious if anyone knew anything about this as it might be a better source for products in the near future.

This is what I do in my daily slow lane job...sourcing. Vietnam is on the rise but to @MattR82 's point, their business sense is horrible. Africa is emerging as a reliable manufacturing source and the Domincan Repubic is great and much closer to the U.S. if that's your target market.

And to @MJ DeMarco 's point don't chase dollars. Build value. You can easily end up saving a dollar now only to spend two later to correct a mistake or deal with bad quality. Find the best mix of price, quality, reliability, and ease of doing business regardless of the location. So many people focus solely on the cost of goods and ignore the intrisic costs of operational expenses and time lost dealing with a poor supply chain.

 

[RobD88]

I'm actually quite interested in the Dominican Republic (DR) as I've heard they're great for textile and fabrics.
Does DR have an equivalent of Alibaba? I've tried going on alibaba to filter out by countries but sadly, the results are nil in terms of what I'm looking for (manus based in DR).

Their currency exchange rate is even lower than a lot of the SE Asian countries where my manu is based and that's gold for me.

They don't have an "alibaba". You would have to do your sourcing search traditionally, research, make phone calls and email inquiries. But google makes that pretty easy. Not only is the exchange rate good but import duties are generally lower (depending on goods) and their labor rate is actually lower than China.

 

[Real Deal Denver]

My view is that patents, trademarks, etc., are only as good as your bank balance. They are like high wire mesh fences around premises to prevent illegal entry and theft. They keep honest people out, but are only a small obstacle for the dishonest and unethical.

My thoughts exactly.

Your analysis echoed my thoughts exactly.

I really hate the idea of assembling this product here. With the extra freight and labor, my costs would triple.

I have to give this some deep thought.

I kind of envy the Chinese system. They sift through all the products and rip off the ones that are promising. Gatekeepers. Very clever of them.

 

[Dan_Fastlane]

Just wait

I love VN but their business sense and attitude to money is atrocious. No need to make more money legitimately from recurring sales when you can just rip them off first time for a fraction of what you could have made! I know that sounds bad, but anyone who has lived here will tell you it's a big problem. It's getting better though, but I wouldn't rely on them doing things much different to China (heck, it will probably end up being a Chinese run factory just located in nam?)

There's actually an interesting discussion to be had on why that's the case but maybe it's not for this thread.

Back on topic. If this thread gains momentum and anyone needs a man in nam, I may be happy to help. Full plate at the moment but it sounds interesting.

can you please share more websites for manufacturer in vietnam? i got only 2 and they are from walters book. Also i would like to see a catalogoue or something like HKTDC? is there something? if not please make one ;D

 

[MattR82]

can you please share more websites for manufacturer in vietnam? i got only 2 and they are from walters book. Also i would like to see a catalogoue or something like HKTDC? is there something? if not please make one ;D

I don't have anything sorry. If I find anything will let drop it in the thread of course.

 

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[Beijing]

It's painful to work things out, only to be duped by a ripoff and your value proposition is put in jeopardy.

If something is way too cheap, of course you might wonder about their facilities, their costs and what is really going on there.

My feel on this is that very few people are offering enough value to justify spending the time and money to unsure that they are not being scammed.

A lot of folks are simply trying to get a piece of a pie that was baked a long time ago. Of course there's no room in their budget for doing due diligence with potential suppliers, because their margins are razor thin. They are literally in competition with everyone who has an Internet connection and a pulse.

If you're actually creating value (baking a brand new pie), odds are there is enough value being created to justify paying what it costs to do due diligence and avoid being scammed.

I actually live in China and as much as I would enjoy visiting factories or businesses to ensure that folks are who they say they are (on behalf of clients in other countries who are considering making deals and placing orders), I've never pursued this route to earning money because I doubt there is much demand for it.

People getting manufacturing in places like China or Vietnam aren't usually looking to spend more money to have things done right -- they are looking to cut as many corners as possible. For the medium to small sized business, this usually means not even spending a couple grand (or less) flying over to do a factory visit.

If I had offers to do this type of work, I'd gladly make it my main means of income, because my internal ethical system enjoys nothing more than ruining things for scammers and dishonest people, but having reached the conclusion that few people would be willing to pay what I would charge to do this (enough to cover a modest income and costs incurred along the way), I'm simply doing something else with my life -- starting my own business and creating value (in the form of products).

 

[StevieB]

Interesting when two posts somewhat expose a mentality...



One exposes money-based orientation...

Is there opportunity? New products where I can make some money because Vietnam will be one buck cheaper?



The other exposes value-based orientation...

I'm solving a problem and need a solution. I'll go with the best, no matter where I can find it. Could be China or Vietnam.


PS: @StevieB -- No, I don't think you're a money-chaser! Just demonstrated an interpretation based on the things we say and focus on.

I was thinking more on becoming a platform to source items from Vietnam for a B2B when I mentioned 'wonder if there's some opportunity there' (just went completely off the original topic from that comment though).

@biophase

Yes, very true I'm fairly new to sourcing products -- it's more of were to start in order to 'look all over the world' short of just searching on Alibaba. It seems @Walter Hay has a book which seems to be a good place to start.

Interesting that you can get products cheaper in various other countries and China even buys them and becomes the middle man in some cases... when suppliers think they're getting them wholesale.

Thank you for the information.