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Businesses that plan to manufacture in Vietnam have two options: Find and Reach out to local suppliers or hire a Vietnam sourcing company. Sourcing a product is a lengthy process that involves supplier selection, quality testing, payment/shipping arrangements, and follow-up. The sourcing company does all this for you and a range of other services.
Even though buyers can find suppliers on Alibaba in countries like China, this process is more difficult in countries like Vietnam, where manufacturers lack an online presence or impose high-order quantities. Sourcing companies have connections with manufacturers in Vietnam and can source quality products for your business – from small to large.
What Do Sourcing Companies Do For You?
The sourcing company effectively serves as your boots on the ground in Vietnam and identifies quality suppliers for your business while weeding out the low-quality manufacturers. Even small to mid-sized companies can benefit from sourcing companies – sourcing is not only for big companies with deep pockets.
Many Vietnam sourcing agencies can be affordable. This guide will focus on the benefits of hiring a sourcing company in Vietnam, the costs involved/payment methods, and an overview of the top sourcing companies in Vietnam. We’ll explain the basics, such as what Vietnam sourcing companies do and help you make your decision.
Top 7 Vietnam Sourcing Companies Ranking
Cosmo Sourcing was one of the first Western sourcing companies in Vietnam, founded in 2012 in China and setting up operations in Vietnam in 2014. Cosmo was founded by an American ex-pat living in China who saw how companies were moving to Vietnam from China. Cosmo Sourcing has since sourced over $40 million worth of products for 100’s of clients from all over the world. Cosmo Sourcing has sourced Vietnamese products for Fortune 500 Companies, SMEs, Amazon FBA sellers, etc. Cosmo Sourcing started in China and has since moved its headquarters to Vietnam.
Cosmo Sourcing is based in Ho Chi Minh City and has teams in Shanghai, Shenzhen, and Hong Kong. Cosmo Sourcing is an American-owned company with American management that ensures stricter standards are applied for all inspections, and the products abide by Western standards and certifications. Cosmo Sourcing offers flat-rate payments for customers and displays transparent fees – hence it made the #1st ranking in our list.
Cosmo provides full transparency, and buyers are allowed to communicate with suppliers directly. Cosmo Sourcing started operations in Vietnam in 2014 and was one of the pioneers before the Trade War that brought thousands of new companies to the country. Cosmo guarantees peace of mind for buyers because it forbids their employees from selling on Amazon FBA or other online platforms. The company protects buyers by making Vietnamese suppliers sign contracts that can’t sell your products on any online platform.
Seditex is a Vietnamese sourcing agency based out of Ho Chi Minh City, Vietnam. It provides a range of sourcing services such as factory audits, factory consultation, merchandise quality assessment, factory visits, employee training, QC inspections, and more. Seditex was founded in 2000 and had decades of experience in the sourcing industry.
Seditex provides a 3-step sourcing process during the pre-production phase. They start by checking the components, estimating risks, and testing whether the company will meet production on time.
Seditex follows up their investigations with a process called “in-line inspection”. The company provides a final checkup once the goods are manufactured before it allows suppliers to proceed with the shipment. Seditex works with suppliers in popular Vietnamese manufacturing industries such as fashion, electronics, seafood, furniture, machinery, bags/backpacks, and more. Their main clients are Savcan and Smithcare.
Dragon Sourcing is a Hong Kong-based sourcing company that is one of the largest sourcing companies in Asia, specializing in procurement services for low-cost manufacturing countries such as India, China, and Vietnam. The company exists since 2004 and has recently expanded to Brazil and Turkey as well. Dragon Sourcing has a regional office in Ho Chi Minh City. Dragon Sourcing has experience sourcing a large variety of products for clients.
Dragon Sourcing’s most popular items include industrial items such as plastics, clothing, footwear, fashion, handicrafts, and more. The company also has experience sourcing libratory items such and finished goods for retail, such as food and ingredients. Dragon Sourcing has a large team comprised of local Vietnamese and international staff that specializes in hands-on procurement.
Dragon Sourcing carries out feasibility studies for clients that determine whether production will be met by potential suppliers and provides a transparent procurement process with quality guarantees, including a deadline guarantee. Dragon Sourcing currently has regional offices in the US, Germany, France, and Italy. Dragon Sourcing’s primary specialty is food, and they work with international brands such as United Biscuits, British Foods, and Smithfield.
AGS Global, short for Alemenide Global Sourcing, is an international sourcing agency headquartered in Ho Chi Minh City, Vietnam. AGS Global specializes in the procurement of products and helps clients select products at the best rates. AGS Global currently has a team comprised of dozens of experts that specialize in product sourcing and quality inspection.
AGS Global can source a wide range of products in Vietnam at the lowest prices, including lifestyle, outdoor, household, furniture, and textile products. AGS Global is certified by BRC, FSC, GMP, and IFS. Their largest companies are cDiscount, Jumbo, Maison Sarah Lavoine, AchatSource, and others. AGS Global exclusively provides product sourcing and manufacturing services and connects buyers directly to suppliers in Vietnam.
Mekong Sourcing is a Vietnamese-based sourcing company with ten years of experience in the sourcing across different manufacturing sectors. Mekong Sourcing guarantees that international buyers will have access to a supplier network that they set up and run over the long term to help them minimize their operation costs in Vietnam.
Mekong Sourcing takes care of the sourcing process and the shipping for clients, taking control of the process. Mekong Sourcing claims their clients will “never have to worry about disruptions in supply,” and they promise compensation in case of a breach of contract by suppliers. Mekong Sourcing’s services include product procurement, sample making, negotiation, production monitoring, and shipping.
Mekong Sourcing connects buyers directly to the original suppliers to increase transparency and communication. This direct connection allows them to improve production quality and serve as a brand ambassador for the buyer’s company to decrease its total cost and increase efficiency.
Cut And Sew Vietnam is a Vietnamese sourcing company that specializes in textiles. Cut And Sew Vietnam have 14 years in the product-procurement and manufacturing sector with two regional Vietnamese offices. Cut And Sew Vietnam QC service has performed audits on over 1000 factories and has direct links to the largest Vietnamese manufacturers who deliver high-quality products at fair prices.
Cut And Sew Vietnam specializes in textile industries such as fashion accessories, footwear, uniforms, t-shirts, formal wear, bags/backpacks, sportswear, swimwear, pet appeal, handicrafts, and more. Cut And Sew Vietnam’s management team is comprised of native Vietnamese personnel trained in Western business operations. They have in-house manufacturing specialists, quality control engineers, biz-dev representatives, and customer service representatives.
Vietnam B2B Direct (International Trade Solutions LTD) is a Vietnamese sourcing company with over 15 years in the sourcing industry. Vietnam B2B Direct is based out of Ho Chi Minh City near the international airport, and they have a second regional office in Nha Trang.
Vietnam B2B Direct’s representatives are present in Cobourg, Ontario, for their North American clients. Vietnam B2B Direct trains its operatives in Western business practices to provide wide-ranging services that include product sourcing, low-cost manufacturing, and product distribution/exports from Vietnam.
Why Hire A Sourcing Company In Vietnam // Top 4 Benefits
The benefits of hiring a sourcing company far outweigh the downsides of the costs involved. The main task of a sourcing company is to find source products/suppliers for your business. The sourcing company identifies Vietnamese suppliers/manufacturers, negotiates on your behalf, conducts inspections, arranges the shipping terms, and serves as your ambassador for your business in Vietnam.
However, Vietnam sourcing companies can work in many different ways. Vietnamese sourcing companies provide services such as supplier selection, quality control, negotiation, and shipping assistance. They also vary in payment terms: Some ask for commissions, and others let you pay a flat fee for their services. The sourcing company you choose should depend on your requirements, and it can affect the final product quality your business ends up with.
The following are the top 5 benefits of hiring a sourcing company when you do business in Vietnam:
✔ Save Money
Vietnamese sourcing companies have a physical presence in Vietnam and deal with factories regularly. They serve as your brand ambassador in Vietnam by consulting with local suppliers, investigating the factories, running quality audits, negotiating with domestic suppliers, arranging the shipping terms, and following up with suppliers. They arrange the lowest-cost options for your business to save you money.
Their extensive experience allows them to narrow down the exact suppliers you need – saving you money and shortening the sourcing time in half. Their physical presence in Vietnam saves you money and resources you would otherwise pay for flights to/from Vietnam, travel to/from factories, quality control audits, and further arrangements.
✔ Learn About Cost
Vietnamese sourcing companies can estimate the cost of your operations and let you know how much you’ll end up paying. The sourcing company serves as a financial agent by inspecting the cost of items, export duties, tariffs, and other costs that may complicate your exports. They know how much it costs to manufacture items in Vietnam negotiates at that rate (or lower!), whereas if you go on your own, you may end up paying a foreigner’s premium.
Sourcing companies consult factories and ask for their financial information to determine how much they charge in advance. Sourcing Companies allows the client to directly negotiate with factory owners and ask for discounts that foreigners may not be able to. The direct communication cuts down on the total production costs for buyers.
✔ Save Time
Sourcing companies have years of experience in the Vietnamese market dealing with manufacturers and shipping companies, which allows them to streamline the production of new products instantly. They are the most efficient when it comes to producing and shipping products because of suppliers, shipping forwarders, government agencies, etc.
Sourcing companies have an extensive network of partners that they can use to place orders and save time. The partnership network allows you to cut down on time needed to start producing and shipping your product.
✔ Audit Quality
The sourcing company has experience with hundreds of large factories and knows which factories are reliable and output high-quality products. The QC and Auditing allow you to avoid low-quality factories with human rights abuses (i.e., child labor/abusive factories) and similar negative aspects that may reflect poorly in your brand. Sourcing companies can investigate factories and let you know whether the factory will be capable of meeting your production quality standards.
The sourcing company usually collaborates with QC services based in the country that can write detailed reports in terms of labor conditions, environmental impact, access to machinery, and other critical information. This collaboration allows them to narrow down a potential list of factories and help you manufacture your product at record speed.
What Do Sourcing Companies Do In Vietnam? Top 4 Things
What can a sourcing company do for your business that you can’t do yourself? What makes Vietnamese sourcing companies different than Chinese sourcing companies? We’re going to look at how sourcing companies operate in Vietnam and what they can do for your business.
Each sourcing company has its protocol for discovering, vetting, and negotiating with suppliers.
They usually set a deadline and assemble a professional team of Vietnamese native experts who can purchase products, assess quality, arrange to ship, and complete orders for clients. The following are the main things a sourcing company can do for your business:
Discover Products in Vietnam
The sourcing company’s main job is to do what the name implies: source products, suppliers, and Manufacturers. The sourcing company can locate and identify factories and products that you need to manufacture and customize your product in Vietnam.
While you may be able to find reasonable prices and companies on the internet, the sourcing company knows which factories can manufacture the kind of products you’re looking for, allowing you to lower production costs and minimize your risk when manufacturing in Vietnam. The sourcing company serves as a local business ambassador and consults you before placing an order.
The sourcing agent places an order with the supplier on your behalf. Not only do they source products, but they also place orders for international clients and monitor the production process. Example: You’ve made an order for 5000 pieces of backpacks. The sourcing company will pay the supplier and start manufacturing your product.
Once the factory starts manufacturing your product, the sourcing company will investigate the quality, consult with you, and ensure the products are shipped on time. The sourcing company effectively acts as if it’s a branch of your company in Vietnam.
The sourcing company partners with other QC companies for a factory audit, depending on the client’s needs. This stage is essential for making sure the products don’t have any defects when they’re being shipped (or to minimize the defects).
Sourcing companies offer basic quality control services. However, some agencies specialize in quality control and provide detailed reports for clients. Still, the sourcing company usually tests the first products for quality and establishes that they’ve met certain standards.
Shipping From Vietnam
The final stage of the production process is to ship the product to a destination such as a port in the US, EU, or other countries. This step involves the logistics of shipping from the factory to a Vietnamese seaport or airport. Vietnam has dozens of ports where goods depart to an international destination.
- Vietnamese sourcing companies negotiates with suppliers to load the goods on their trucks or hires a forwarding company that transports the merchandise and ships it internationally.
The sourcing company obtains all documentation to abide by Vietnamese law and ensures the order is shipped on time. The client determines which mode of transport they prefer (usually air or ocean). For small orders, airfreight is the most common transport mode. For large orders, ocean shipping is the most popular model and takes 3-4 weeks at an average price of $1000-2000 per container.
The sourcing company helps the clients unload their merchandise at home by supplying all paperwork necessary. In some cases, the sourcing company can arrange a transfer from the destination port directly to the buyer’s warehouse in the US. They are involved at every stage of the shipping process and follow up with the client after delivery to ensure the products are delivered safely. In the event of damaged products, the sourcing company can issue an insurance claim.
What’s The Cost? Top 3 Ways Sourcing Companies Get Paid
Will you still stay profitable if you hire a Vietnam sourcing company? Are sourcing companies only for big brands, or can small/mid-sized businesses also hire them? The answer: Yes, you’ll even save money when you hire a sourcing company. However, you must make sure you pick the right company. Vietnamese sourcing companies vary in payment methods – some ask for commission (%) based payments, others ask for monthly payments, and some ask for a flat fee in advance.
1 // Commission-Based Payment
The most common way sourcing companies charge buyers is a commission based on the order amount. The sourcing company calculates how much you owe them based on the number of products they source for the client. Bigger orders require more auditing and negotiations, which is why the company gets paid a higher commission. However, this method is not ideal if you want to save money at first.
2 // Hourly Payments
Sourcing companies may prefer to charge clients by the hour and ask for payments based on how many hours they’ve spent working on your project. This method is not ideal for international buyers because it may charge you for more hours than you owe unless you can document their work. This method is only recommended for large companies who are not on a budget.
3 // Flat Rate Payment
The flat-rate payment is the best mode for small/mid-sized businesses looking to save money because they know exactly how much they’ll be paying in advance. Instead of paying by the total value once the order is shipped or arbitrary hours worked, you know exactly how much you owe the sourcing company in advance. The flat rate is the safest payment method when you’re starting with a sourcing company.