Guidelines for selecting wood product suppliers

As of January 2024, Vietnam has approximately 6,000 wood processing and manufacturing enterprises. Among them, the group of direct exporters (accounting for about 20%) consists of large-scale enterprises in the industry, primarily FDI enterprises. The group of non-direct exporting enterprises (accounting for about 80%) includes subcontractors for export companies and those producing for the domestic market. In reality, accessing this group is a reasonable choice to help importing companies obtain a competitive price.

Vietnam has a long history in the handicraft industry, with over 340 craft villages spread across the country. This creates a diversity of quality and products for Vietnam’s wood and wood-related items. Therefore, in this step of searching for and selecting suppliers, it is essential to ensure that you choose the right partner to meet your project’s deadlines and budget. The following steps should be taken:

Step 1: Define Supplier Selection Criteria

• Price: Ensure the supplier offers competitive pricing that aligns with your budget.
• Quality: The supplier must guarantee the wood quality according to required standards, with quality certifications such as FSC (Forest Stewardship Council).
• Delivery Time: The supplier should commit to on-time delivery to ensure project timelines are met.
• Ability to Supply Large Quantities: Ensure the supplier can meet large order quantities without compromising quality. For example, if you plan to sell 1,000 products in Q1, but market demand fluctuates, the supplier should be capable of producing between 1,200 – 1,500 products within that timeframe.
• Reputation and Operational History: Research the supplier’s reputation and experience in the market.

Step 2: Search for Suppliers

• Attend Trade Shows: Participate in international trade fairs specializing in wood and furniture to find potential suppliers.
• Online Research: Use official information and industry websites to search for and contact wood suppliers in Vietnam.
• Networking: You can use sourcing companies in the market to help you select and find multiple potential suppliers at reasonable prices. As the market develops, many new manufacturers will emerge with modern machinery and a good understanding of the market. Sourcing companies can help you find such suppliers to create the best quality products at competitive prices.

Step 3: Contact and Negotiate

• Send Request for Quotation (RFQ): Contact potential suppliers to request detailed quotations, including product prices, payment terms, and delivery times.
• Evaluate Quotations: Compare quotes from multiple suppliers to choose the one offering the best price and fitting your budget.
• Negotiate Contracts: Negotiate terms regarding price, quality, delivery conditions, and other clauses to ensure maximum benefits.
• To ensure detailed terms and favourable conditions, it’s advisable to use an intermediary company to evaluate and expedite the contract.

Step 4: Inspect and Evaluate Suppliers

• Request Product Samples: Ask suppliers to send product samples for quality inspection before signing the contract.
• Factory Visit: If possible, arrange a visit to the manufacturing plant to assess production capabilities and quality control processes.
• Check Legal Documents: Ensure that the supplier has all the necessary legal documents, including business licenses, quality certificates, and related certifications.

Step 5: Select a Supplier

• Overall Evaluation: Based on all the gathered information, select the supplier that best meets your criteria for price, quality, and reliability.
• Sign the Contract: After choosing a supplier, proceed to sign the official contract, ensuring that all terms are clearly defined and legally binding.

See more blog: Review of Reputable Wood Suppliers in Vietnam by Region

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Sample Questions to Determine Supplier Capabilities