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Manufacturing & Distribution
Why Manufacture in Vietnam?
Vietnam is a very unique country in Asia which is positioning itself to become an "Asian Tiger" economy. Due to its very convenient geographical location, manufacturing similarities to China, and lower cost of of labor, Vietnam is a fantastic place to produce products.
Despite slow growth and high inflation in the 90's, Vietnam's economy has stabilized significantly due to government reforms and economic liberalization and is now becoming a highly educated, high-quality manufacturing base. Vietnam has a strong competitive spirit which drives them to produce products of high quality to compete with their neighbors in Asia.
Who Manufactures in Vietnam?
Vietnam is becoming a major hub for companies such as LG, Samsung, Intel, Bosch, and many other large international companies looking for: the ability to produce products with high-quality, have a abundant supply of young motivated workers, avoid trade barriers i.e. trade war tariffs, ease of importing more exotic raw materials for production, and various other reasons. Due to Vietnam's very pro-business import-export rules, companies can import various raw materials far easier than their counterparts in China; thus, making it easier to produce higher quality products for less. Additionally, import and export is very easy to do directly from any company in Vietnam, so finding a company "who accepts USD" is not an issue compared to certain other countries.
DSC's Factories produce products for companies such as LG, Toyota, Japan Airlines (JAL), Hit Box, Shark Tank products, and many others.
WHAT’S THE MINIMUM ORDER AMOUNT?
Generally there is no "MOQ" however there is a point at which the cost of small quantity becomes too high to feasibly make any money. For reference, a pallet as of August 2021 will cost you roughly $2400 to ship from Vietnam to Los Angeles while a 40' container which can fit around 20 pallets will cost you around $14,000. This means the shipping cost for a container of goods is less than half if you ship a container versus a pallet.
Why is the cost difference so great? It comes down to fixed costs per shipment. A pallet's shipping cost may only be around $450; however, your port and customs clearance costs for a pallet are the same as that for a container, so if you ship 20 pallets you will end up paying 20 times more in customs clearance fees than if you shipped a container. In our cost example, a pallet to LA would cost around $500-800 in trucking from port to door while a container might cost around $1200-1500. This means 20 pallets would cost nearly $16,000 in trucking alone versus $1500 to ship 20 pallets of goods together at the same time in a container.
Material costs can add up as well when you do small quantities. A first-time backpack order of 50-100, for example, pieces involves many things, some of which are:
Design of the backpack's fabric pieces (they must all be cut the same which involves either making custom knife dies or setting up a CNC cutting machine.
Machine set up to cut the pieces of the backpack
Minimum order quantities on custom zipper colors
Costs to create custom logo zippers.
Minimum fabric quantities for custom colors.
The main thing to remember is this- MOQ's aren't set in stone, but certain products have higher MOQ's due to the costs of customizing colors, materials, setting up tooling, etc... Keep this in mind when planning your new product.