Top 7 Vietnam Sourcing Mistakes

Catalyst88 SourcingTop 7 Vietnam Sourcing Mistakes

As the global economy has become increasingly interconnected, sourcing from overseas markets has become increasingly popular among businesses. Vietnam, in particular, has become a popular source of various goods and services due to its low labor costs and competitive manufacturing capabilities

However, sourcing from Vietnam is not without its risks. Many companies make rookie mistakes when sourcing from this country and end up paying the price. It will look at the top 7 sourcing in Vietnam mistakes and how to avoid them.

Let’s Get Started!

What is Vietnam Sourcing?

Vietnam Sourcing is a process of identifying and selecting suppliers in Vietnam that can provide goods or services to a company. It can be done through various means, such as online research, attending trade shows, or working with a sourcing agent. 

When sourcing from Vietnam, it is essential to consider several factors, such as cost, quality, lead time, and minimum order quantity. Once a potential supplier has been identified, it is essential to visit their facility and meet with their team to ensure they are a good fit for your company.

Finding the right supplier, Vietnam Sourcing, can be complex and time-consuming. Working with a sourcing agent can be a helpful way to save time and ensure that you find the best possible supplier for your needs.

Why Vietnam Sourcing is Important?

Vietnam sourcing is essential for several reasons. 

  • Firstly, Vietnam has a large population and many products to choose from. It means there is always something new and exciting to discover when sourcing in Vietnam. 
  • Secondly, Vietnam’s skilled workforce makes it an ideal location for manufacturing and production. 
  • Thirdly, due to the country’s low labor costs, Vietnam is an excellent option for companies looking to save money on their product cost. 
  • The relatively simplified regulatory environment is a fourth reason for doing business in Vietnam. 
  • Lastly, Vietnam has a long history of being an important trading partner with many countries worldwide, making it an excellent choice for companies looking to expand their global reach.

Top 7 Vietnam Sourcing Mistakes

To help you out, here are the top 7 Vietnam sourcing mistakes you should be aware of.

Mistake #1: Starting without Knowing Your Desired Result

Before you even start looking for suppliers in Vietnam, you must clearly understand what you want to achieve. It means having well-defined objectives, a delivery timeline, and a budget. Without these, you’ll likely find yourself running around in circles, unable to decide or move forward.

Before starting any sourcing project, it’s crucial to understand what you want to achieve clearly. Otherwise, you’ll likely end up with many products that need to meet your needs or expectations.

When you know your desired result, you can more easily identify the right supplier. You’ll also be able to negotiate better deals and avoid costly mistakes. So, take the time to figure out what you want before you start sourcing in Vietnam.

Mistake #2: Lack of Understanding

When it comes to sourcing in Vietnam, one of the biggest mistakes companies make is a need for more understanding. This lack of knowledge can manifest itself in several ways, but the most common is a lack of knowledge of Vietnamese culture and business practices. This lack of understanding can lead to several problems, including miscommunication, misunderstandings, and even conflict.

To avoid these problems, companies must take the time to learn about Vietnamese culture and business practices before sourcing in Vietnam. It can be done through research, talking to experts, and spending time in Vietnam. By taking the time to understand Vietnamese culture and business practices, companies can avoid the mistakes that can lead to problems when sourcing in Vietnam.

Mistake #3: No Purchasing System

One of the companies’ biggest mistakes when sourcing in Vietnam needs the purchasing system. It can lead to several problems, including:

  • Feeling overwhelmed by the sheer number of suppliers in Vietnam
  • Not knowing how to select the suitable suppliers
  • Not having a system for managing supplier relationships

A purchasing system is essential for any company that wants to source in Vietnam effectively. With a system in place, it will be easier to manage the sourcing process and ensure that you get the best possible prices from your suppliers.

Mistake #4: Not Enough Details

One of the top Vietnam sourcing mistakes that companies make is not providing enough details to their suppliers. It can lead to several problems, including poor communication, quality issues, and production delays.

When sourcing from Vietnam, it is essential to provide your suppliers with as much information as possible. It includes your company’s specifications, design files, and other relevant information. By providing more details, you can ensure that your suppliers understand your requirements and can produce the needed products.

You need to provide more details to avoid your products not meeting your standards. It can lead to costly delays in production and, ultimately, a loss of business. So, when sourcing from Vietnam, give your suppliers all the information they need to produce quality products that meet your expectations.


Mistake #5: Lack of Oversight

When it comes to sourcing in Vietnam, one of the biggest mistakes you can make is to need more oversight. It means not having a clear plan or strategy in place and not having someone responsible for monitoring progress and ensuring that everything is on track.

Without oversight, it’s easy for things to go off the rails and for problems to arise that could have been avoided. It can lead to delays, cost overruns, and other issues that negatively impact your business.

So, if you’re sourcing in Vietnam, have a clear plan and make sure someone is responsible for overseeing the process. It will help to ensure that everything goes smoothly and that you get the results you’re looking for.

Mistake #6: Everything Takes Longer and Costs More

One of the biggest mistakes companies make when sourcing in Vietnam is assuming that everything will take less time and cost less money than it does. Vietnam is a developing country with many infrastructure and logistical challenges. Even simple tasks can take longer and cost more than you expect.

One way to avoid this mistake is to build extra time and buffer into your project timelines. It will help ensure you don’t run into delays and pay more than you budgeted. Additionally, working with experienced local partners who can help you navigate the challenges of sourcing in Vietnam is essential.

Mistake #7: Lack of Compliance

Regarding sourcing in Vietnam, compliance is often an afterthought if it’s considered. It can be costly, as non-compliance with local regulations can lead to delays, product issues, and even legal problems.

It’s important to remember that Vietnam is a developing country with a complex regulatory environment. When running a business in Vietnam, it is imperative to comply with its many laws and regulations. 

Some of the most common compliance issues include:

  • Not following local labor laws
  • Not following environmental regulations
  • Not following product safety regulations

Ignoring compliance is a risky proposition, and it can come back to bite you. If you’re sourcing in Vietnam, make sure you’re doing it compliantly to avoid any problems down the road.

How Can I Avoid Vietnam Sourcing Mistakes?

Are you considering sourcing in Vietnam, but you’re worried about making mistakes? 

If so, you’re not alone!

Many companies make mistakes when sourcing from Vietnam, but you can avoid them by taking the proper steps. 

Here are some tips on how you can avoid Vietnam sourcing mistakes:

1. Research the Vietnamese Market

Regarding sourcing in Vietnam, it is essential to research to ensure everything runs smoothly. With a population of over 98 million people, Vietnam is a large and growing market with a lot of potential for businesses. However, it is also a market that many enterprises still need to discover. It means that there is a lot of potential for mistakes.

To avoid mistakes when sourcing in Vietnam, thoroughly researching the Vietnamese market is essential. It includes understanding the country’s culture, customs, and business practices. It is also necessary to build good relationships with local suppliers and partners. 

2. Choose the Right Supplier

Once you have identified suitable suppliers, be sure to take the time to vet them thoroughly before signing any agreements. Ask for references and case studies, get detailed quotes, and make sure they understand your company’s needs and expectations.

3. Communicate Effectively

Good communication is essential for successful Vietnam sourcing. Make sure you communicate clearly with your supplier and establish a timeline for delivery. Having a good relationship with your supplier can help you avoid misunderstandings that could lead to costly delays.

4. Protect Your Intellectual Property 

Vietnam is quickly becoming a hotbed for intellectual property theft, so protecting your company’s designs and ideas is essential. Make sure you have robust non-disclosure agreements and take steps to protect your intellectual property.

5. Have a Backup Plan

Finally, it’s essential to have a backup plan in case something goes wrong. Have alternative suppliers lined up and ready to go in case of delays or other problems. By avoiding these mistakes, businesses can have a successful Vietnam sourcing strategy. 

Why Getting Suppliers on Board Is Key

Any business’s success relies heavily on its ability to procure high-quality raw materials and supplies at a reasonable cost. For this reason, it is essential to have strong relationships with suppliers who can be trusted to provide consistent, reliable service.

Building strong supplier relationships requires effective communication and a clear understanding of each other’s needs and expectations. Developing a mutual understanding of the business goals and objectives is also essential. Once these relationships are established, it is crucial to maintain them through regular communication and review.

There are many benefits to having strong supplier relationships. 

  • First, it helps to ensure a steady supply of materials and supplies, which is essential for meeting customer demand. 
  • Second, it can lead to cost savings through volume discounts and improved payment terms. 
  • Finally, it can improve the quality of the business’s products and services.

Developing strong supplier relationships is essential for the success of any business. By taking the time to build these relationships, businesses can reap the many benefits that they have to offer.

Final Thoughts

When sourcing from Vietnam, it’s essential to take the time to understand the market, compliance regulations, exchange rate, and customs clearance procedures. Having successfully sourced products from Vietnam in the past, it’s likely that you have also made some common sourcing mistakes. 

If this is the case and you’ve been struggling to get your business off the ground, read our top 7 tips for avoiding these pitfalls when sourcing products from Vietnam. By following these tips, you’ll be well on your way to a successful product procurement from Vietnam.