Vietnamese distributors are an essential part of the supply chain in Vietnam. They serve as intermediaries between manufacturers and retailers, connecting products with consumers across various industries. As Vietnam continues to experience rapid economic growth, the role of distributors is becoming increasingly important, particularly to non-native companies who do business in Vietnam. Therefore, when seeking Vietnamese distributors, they must understand the 5 key things that every domestic distributor wants from foreign suppliers, which are listed below:
1. Trending Products
In the context of an ever-changing and competitive business market, the distribution companies in Vietnam consistently pay attention to and seek to leverage trending products, which is an essential factor for sustaining and developing their businesses.
One fundamental reason why distribution companies in Vietnam focus on trending products is to meet customer demands. Customers always desire to have access to new, modern, and exciting products. By providing products that are currently ‘hot’, distribution companies can satisfy these desires and maintain customer satisfaction.
Trending products often come with attractive business opportunities. Offering these products can generate substantial profits for distributors. Customers in Vietnam are often willing to pay higher prices for unique and novel products. This opens up opportunities for optimizing sales volumes and financial growth.
Moreover, the business market is always competitive and constantly evolving. Trending products typically represent differentiation and advantages in competition. Foreign brands need to keep up with these new trends to avoid falling behind and maintain their position against competing rivals.
2. High Margin Products
High-margin products are those that have the potential to yield substantial profits due to their premium value or unique features. To ensure these products can be effectively introduced and marketed by Vietnamese distributors, it’s essential to establish wholesale prices that allow for various expenses while maintaining profitability.
Setting wholesale prices at around 20% of the recommended retail price is a common practice. For instance, if a product is intended to be sold at a retail price of $100, the wholesale price would be approximately $20. This approach offers distributors a reasonable profit margin while also accommodating costs associated with launching and promoting the product.
By keeping wholesale prices relatively low, foreign businesses have room to allocate funds for different aspects of their business operations, including:
- Marketing and Promotion: Effective marketing is crucial for creating awareness and demand for the product. Funds can be directed toward advertising, social media campaigns, influencer collaborations, and other promotional activities.
- Administrative Tasks: Administrative tasks such as documentation, legal procedures, customs clearance, and other regulatory requirements are necessary when importing products. Allocating funds for these tasks ensures a smooth and compliant entry into the market.
- Logistics and Distribution: Costs related to shipping, warehousing, and distribution should be factored in. Adequate logistics support ensures the product reaches customers efficiently and on time.
- Packaging and Branding: Creating appealing packaging and establishing a strong brand presence often require financial investment. Well-designed packaging enhances the product’s perceived value and attracts potential buyers.
3. Certificates & Awards
Certificates and awards are often bestowed by industry associations, professional bodies, or recognized institutions. Earning these accolades signifies that a company or its products have met specific industry standards, demonstrated excellence, or contributed significantly to the field. This recognition elevates the company’s credibility and positions it as a leader in its sector.
When Vietnamese distributors see that a product or business has received certificates or awards, they are more likely to trust the quality and reliability of what’s being offered. Certifications such as ISO standards, safety endorsements, or quality seals serve as indicators that the product or service adheres to strict guidelines, ensuring distributors’ safety and satisfaction.
Certifications can also play a role in building strong relationships with suppliers and partners. Having recognized certificates can assure these entities of a company’s commitment to quality and adherence to industry standards, facilitating smoother collaborations.
Examples of Certificates and Awards:
- ISO Certifications: These standards signify a company’s adherence to international quality management systems, environmental practices, and more.
- Industry-specific Awards: Awards recognizing excellence in specific sectors, such as technology, sustainability, innovation, or customer service.
- Safety Endorsements: Certifications indicating that a product meets safety standards, reassuring consumers about its use.
- Customer Satisfaction Awards: Recognition based on high levels of customer satisfaction and positive feedback.
- Ethical and Sustainability Certifications: Acknowledgments for environmentally friendly practices or ethical sourcing.
4. Great Marketing Support: A Dynamic Approach to Collaboration
Vietnam’s dynamic business landscape, coupled with changing consumer behavior, has led distributors in the country to place significant importance on effective marketing support.
Great marketing support offers Vietnamese distributors the opportunity to increase the visibility of the products they distribute. Effective marketing campaigns, both online and offline, ensure that the products are well-promoted and reach a broader audience. This heightened visibility translates into increased brand awareness among consumers, ultimately driving demand.
Besides, the Vietnamese market is characterized by fierce competition, especially in sectors where multiple distributors offer similar products. Well-executed marketing strategies allow distributors to differentiate themselves from competitors. This differentiation can be achieved through unique branding, creative messaging, and engaging campaigns that resonate with the target audience.
5. Fast and Flexible Brands: Embracing Exclusive Distribution and Adaptation
Fast and flexible brands recognize the potential of exclusive distribution arrangements. This strategy involves partnering with selected distributors, giving them the sole rights to distribute the brand’s products in specific regions or markets. This exclusivity encourages distributors to invest more in promoting the brand and its products.
Example: An electronics brand partners exclusively with a reputable distributor in Vietnam, granting them exclusive rights to distribute their latest line of smartphones. This arrangement gives the Vietnamese distributor a competitive advantage, enabling them to present a unique offering to the local market. As a result, both the brand and the distributor experience increased visibility and market share.
A hallmark of fast and flexible brands is their willingness to adapt to the individual requirements of distributors in Vietnam. This includes being open to negotiating pricing, shipment policies, and other contractual terms. Brands that understand the significance of accommodating distributor preferences foster stronger and more mutually beneficial partnerships.
Fast and flexible brands steer clear of rigid structures and embrace feedback loops with their distributor network. They acknowledge that the business environment is ever-evolving and value the insights and suggestions of their partners. By actively listening and making adjustments based on feedback, these brands foster a collaborative atmosphere that drives success.
To sum up, Vietnamese distributors hold distinct expectations when engaging with foreign brands. Meeting these expectations paves the way for forging robust and enduring partnerships that yield mutual advantages. Through collaborative efforts, brands and distributors synergize their strengths to introduce top-notch products to Vietnamese consumers, fueling market growth. Nonetheless, it’s imperative for brands to effectively navigate the process of identifying suitable local distributors in Vietnam. Need guidance on initiating this journey? Explore the insights presented in this informative article:
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