Sourcing from China is old news, Vietnam new news?

[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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[StevieB]

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.

It was simply a thought that entered my head. An idea that I put into a post. I get many of them, daily. Right now I'm focusing on something completely different and don't plan on changing. Gotta keep the focus on what I'm building already and not chase shiny objects. Though I hear @MattR82 lives there.

 

[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.

 

[Xeon]

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

 

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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

 

[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

 

[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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[Real Deal Denver]

Okay Walter. I hang on every word you say.

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.

Here is where I'm at. I have a dynamite product. It will require high quality standards, like you mentioned in your post, to stand out as the superb product that it truly is. I am sure I can find a supplier in China to do all of that.

Life is good, right? I'm not so sure. I think I have the idea for your next book.

What worries me MOST about my product being produced is how long it will take to knock it off. And, as has been pointed out before, that could even come from my OWN supplier running with my product!

So I am at stage 3. Stage 1 is developing a hot product. Stage 2 is ramping up and being able to supply the market with the finished product. Stage 3 is fighting off the dogs that pick up my scent, chase me down, and steal my market. I am limited in my capabilities. Although I might be able to turn 10K of these items in a month, a bigger player could do ten times that much. Then the chase will be on. Let's get real - I can't do a half million units a month. Maybe a year down the road I'll be able to. How do I scale up, from being a weak seedling to a strong tree, without being stepped on by any gorilla that happens to be walking by?

Write that book. One reference that I've come across that is similar to this story is from Robert Kiyosaki, who developed a velcro nylon sport wallet. No, they did not live happily ever after. His idea was stolen from him. Great product. But, like the second graders on the play ground, the big kids took his lunch money.

Another reference is when Smith and Wesson stole the Glock 9mm pistol design. Glock is a big company, and fought a good fight. But they lost. S & W made tiny changes to the design of the gun, and won the patent infringement case. Cost them millions to do it, but I guess their product was worth that much. Mine isn't. And even if it was, I don't have the resources to fight that battle.

This is what gives me nightmares.

I have 20 or so books on how to invent/patent/market. Not one single one on how protect and grow my product. A patent is not the answer. I don't have $100K and five years to defend my patent, like Glock did. Or even $20K and two years.

CAN a little guy make it big?

The world needs that book. "Market effectively while protecting your product so you can grow your company and not be crushed."

 

[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.

 

[Xeon]

the Domincan Repubic is great and much closer to the U.S. if that's your target market.

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.

 

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[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.

 

[Xeon]

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.

Thanks! DR seems to be an untapped gold mine based on what you mentioned. Low labor rate, great exchange rates and I think the shipping costs will be way way lower than from Asia to the US!

 

[Walter Hay]

Okay Walter. I hang on every word you say.



Here is where I'm at. I have a dynamite product. It will require high quality standards, like you mentioned in your post, to stand out as the superb product that it truly is. I am sure I can find a supplier in China to do all of that.

Life is good, right? I'm not so sure. I think I have the idea for your next book.

What worries me MOST about my product being produced is how long it will take to knock it off. And, as has been pointed out before, that could even come from my OWN supplier running with my product!

So I am at stage 3. Stage 1 is developing a hot product. Stage 2 is ramping up and being able to supply the market with the finished product. Stage 3 is fighting off the dogs that pick up my scent, chase me down, and steal my market. I am limited in my capabilities. Although I might be able to turn 10K of these items in a month, a bigger player could do ten times that much. Then the chase will be on. Let's get real - I can't do a half million units a month. Maybe a year down the road I'll be able to. How do I scale up, from being a weak seedling to a strong tree, without being stepped on by any gorilla that happens to be walking by?

Write that book. One reference that I've come across that is similar to this story is from Robert Kiyosaki, who developed a velcro nylon sport wallet. No, they did not live happily ever after. His idea was stolen from him. Great product. But, like the second graders on the play ground, the big kids took his lunch money.

Another reference is when Smith and Wesson stole the Glock 9mm pistol design. Glock is a big company, and fought a good fight. But they lost. S & W made tiny changes to the design of the gun, and won the patent infringement case. Cost them millions to do it, but I guess their product was worth that much. Mine isn't. And even if it was, I don't have the resources to fight that battle.

This is what gives me nightmares.

I have 20 or so books on how to invent/patent/market. Not one single one on how protect and grow my product. A patent is not the answer. I don't have $100K and five years to defend my patent, like Glock did. Or even $20K and two years.

CAN a little guy make it big?

The world needs that book. "Market effectively while protecting your product so you can grow your company and not be crushed."

Thanks for the suggestion about a new book. I have a couple in mind already, so I'm not keen on opening the can of worms that your problem constitutes.

But.... I'll try to help. 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.

If someone breaches your IP boundaries, you can threaten or litigate. Even if the thief is small fry, it can still cost you a huge amount to bring the matter to court.

As I'm sure you know, the situation in China is very bad in that regard. I recommend a lawyer in China to help protect your IP, but he advises against litigation. His successes have mostly been achieved by bluffing.

Without knowing what your product is, I can only suggest, if practical, you avoid allowing any supplier knowing what the finished product is, and never let them know your brand or website details. This could involve buying under a different name from several sources. This adds to freight costs and slows down the process, but can provide reasonable protection until local copycats as well as those in other countries decide to jump on your bandwagon.

If you can have the component parts assembled locally, that will help keep your design off the Chinese suppliers' radar for quite a while.

With the amount of reshoring that is now taking place, it might be worth considering manufcaturing in the US. It might pay to have some components made overseas.

I suggest you have a look at Reshoring Initiative | Reshoring Initiative in particular, look at their What is Reshoring page.

Walter

 

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[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.

 

[PeterT06]

As someone who source products from China for clients foer years VN is not there yet.
From my expirience the warehouse services in VN is getting better.

 

[caezlar]

In the junction between China Guangxi province and Vietnam，Every day every minute, huge number of products are transported into Vietnam from China, Not through the customs，via Vietnamese male and female back them through the mountains.

 

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