Vietnam has been developing as one of the hot spots for businesses seeking to relocate part of their production in this era of diversification of global supply chains.
Often, buying offices can initiate this shift, taking upon themselves a wide variety of services that set up smooth operations and high-quality output.
Among the key activities the buying offices would handle for their clients are supplier search and quality inspection.
How to find the right supplier?
Finding the right supplier is the basis for a successful sourcing strategy. This usually starts by visiting wholesale markets, factories, and exhibitions where you, or your buying office, will meet many potential suppliers.
The first thing to do is state your product requirements, quality standards, target price, and timeline. That’s the primary input for starting the supplier search. Once potential suppliers are shortlisted, the track record of suppliers in terms of quality control procedures, delivery times, and financial stability are considered. This step ensures that the selected suppliers can consistently meet your needs.
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Further checks and analysis, such as factory audits and risk assessments, verify the legitimacy of suppliers to ensure they comply with legal and ethical standards. It may include site visits, reference checks, or reviews of business licenses and certifications.
Benefits of using a buying office partner in Vietnam
Here are some reasons to consider using a Vietnam buying office partner in Vietnam:
- A good buying office will have professionals that speak the local language fluently (Vietnamese, in this case) and English. They should have strong communication channels, be quick to respond to inquiries, and be available for calls when needed.
- Some sourcing agents might specialize in manufacturing projects like furniture, handicrafts, or metalwork. Check if the experience of the buying office being considered aligns with the area in which your business needs assistance.
A third-party company hired to handle your procurement can be thought of as a connection between the buyer and supplier. The acquired company will know the demands and limitations of both parties. Negotiation skills must be assessed in this regard, especially in rates, payment terms, and minimum order quantity (MOQ). - Having a buying office with attached warehousing facilities can provide a host of benefits. They can supervise the logistics and warehousing, manage orders from many suppliers in mixed container consolidations, and assure cost savings. They can also provide quality control, proper packing, and customization of the packaging that would enhance the visibility and appeal of your brand.
Top 3 recommended Vietnam buying offices
As a new entrant or SME, partnering with small to mid-scale sourcing agencies can be highly advantageous due to their flexibility and adaptability in handling small-scale projects.
These agencies can effectively deploy their teams to meet the specific needs of emerging businesses, ensuring tailored support and personalized service.
- MovetoAsia: As a professional buying office agency based in Vietnam, they offer specialized services to help businesses leveraging sourcing and manufacturing in Vietnam. Find more detailed resources and insights on this Vietnam sourcing playlist.
- SourcingAgentVietnam.Com: Based in Vietnam, this sourcing agency has served international buyers for six years. With a small-scale team, they have built a reputation for trustworthiness. They excel in connecting buyers with reliable manufacturers and suppliers in Vietnam, ensuring smooth communication, quality control, and timely delivery.
- Nordcham Consulting: Established in Ho Chi Minh City, this Vietnamese sourcing agency offers factory audits, quality assessments, and consulting for sourcing.
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Quality checks within sourcing agencies
These processes are vital for maintaining product standards. They fall into three main categories: pre-production, during production, and final random control of goods.
Each plays a role in eliminating potential risks and ensuring clients receive products that meet their specific requirements.
Vetting new suppliers
Pre-production due diligence is crucial for discovering potential issues before they become significant problems. As the saying goes, “garbage in, garbage out”; faulty parts or raw materials do not give quality products. Buying offices may arrange to have random samples of inputs visually inspected or sent to laboratories for testing. This step is vital for customized and complex products.
Experienced inspectors verify the factory’s capability to interpret the technical files and ensure effective communication between development and manufacturing teams. They confirm that the machinery for large-scale manufacturing is the same as that used for prototypes. Although production is underway, finding problems earlier saves significant impediments.
Quality Control
Inspecting products during production, also called in-line quality check, prevents the creation of many defective goods, which would cost much to rework or require a completely new production cycle. During an in-line quality check, the first few pieces produced are checked for compliance.
This allows the factory to make immediate amends and reduces the risk of delays, keeping the order on track. In-line inspections also enable buyers to verify the production location, ensuring transparency and accountability.
Final product inspection
The most popular quality check among importers is the final product inspection, which takes place when products are fully finished and ready to ship. Inspectors examine the conformity of products with a predetermined list of criteria regarding quantity, workmanship, functionality, safety, appearance, size, and packaging. This form of inspection allows a genuinely random sample to be drawn, representing views of the entire batch. Although the findings of such verifications are commonly promising, buyers should remember that they do not fully guarantee the quality of the total order. To minimize risks, the buying office may advise supplementary measures, such as container-loading supervision, to safeguard shipment integrity. This helps avoid frauds like shipping smaller quantities or substituting products after the final inspection.
Contracting vs setting up a buying office team
Vietnam’s manufacturing sector offers good products at competitive prices. The remaining question for businesses is whether to use an existing local buying office or setup their own team. Owning an office in Vietnam gives you full control over operations, including staff and brand representation, potentially leading to long-term savings. However, it requires a high initial investment, takes time to build a reliable network, and carries higher risks due to the complexities of navigating a new market.
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Contracting an existing local buying office allows for faster, cost-effective entry with less risk. Local sourcing agents have established networks and knowledge of regulations, ensuring smoother operations. However, this approach offers less control and flexibility over sourcing strategies and brand representation. Finding a partner whose values align with your business needs is crucial to ensure a successful partnership.
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Source: Vietnam Insider