Even with tariffs and logistical challenges, international manufacturing is often the best option for companies wishing to bring a product to market. How successful that strategy will be, however, depends on finding a suitable factory in the right country.

Many companies look to China first, but Vietnam has recently emerged as a rising star in contract manufacturing.

In this article, we’ll look at what makes Vietnam a great option and the best approach to making a product with Vietnamese manufacturing.

• Low labor costs and specialties in major industries make Vietnam a competitive manufacturing hub.
• Well-planned RFQs help mitigate unexpected costs and allow for accurate business quotes.
• Clear manufacturing specifications are crucial for selecting the right manufacturer.
• Manufacturers should be properly vetted and tested before running a full production order.

• Introduction
• Key Takeaways
• Why Choose Vietnam for Manufacturing?
• What Kind of Products Can Be Made in Vietnam?
• How to Manufacture a Product in Vietnam: A Step-by-Step Guide
• An Emerging Manufacturing Powerhouse
• FAQs

There are four major advantages to making a product in Vietnam.

1. Affordable Labor Costs

The most obvious advantage is the labor expense, which are approximately 40 to 60% of what they are in China. This makes Vietnam’s workforce a very cost-efficient resource.

2. Free Trade Agreements

Vietnam has entered into a number of strategic Free Trade Agreements (FTAs).

These include:

• Comprehensive and Progressive Agreement for Pacific Trade (CPTPP), allowing duty-free access with Canada, Mexico, and Japan
• EU-Vietnam Free Trade Agreement (EVFTA), eliminating 99% of EU tariffs on electronics, shoes, and other non-foodstuffs by 2027
• Regional Comprehensive Economic Partnership (RCEP), ensuring free trade between 15 Asia-Pacific countries to make sourcing components easier

Together, these agreements make it easier to source materials and more affordable to import and export goods from the country.

3. Diversified Supply Chain

Vietnam’s supply chain has become remarkably diverse, allowing more materials and components to be sourced directly from the country or its close neighbors.

This minimizes the risk of supply chain disruption due to global hostilities and international political upheavals. It also protects companies from regulations, natural disasters, and excess tariffs.

4. Attractive Investment Incentives

The Vietnamese government has actively courted international corporations through Foreign Direct Investment (FDI) programs. This strategy has paid off, attracting 3,375 new projects in 2024, with a total of nearly $20 million USD in newly invested capital.

These investments have led to a growth in Vietnam’s manufacturing ecosystem, which has grown by 10.3% in the first seven months of 2025 alone.

Manufacturing a product in Vietnam can be a complex endeavor, but following these steps will simplify the process.

Step 1: Prepare Your Product Design and Specifications

The first step in making a product in Vietnam is the design phase. 

Use Design for Manufacturing (DFM) procedures to create all the technical documentation the manufacturer will need. This will include 2D and 3D CAD models and a bill of materials listing all the components and parts required for the product.

To get the best results, hire technical engineers and industrial designers to ensure all the necessary data is included and clear enough to avoid any misinterpretation. They will be able to determine what does and does not need to be included to produce a smooth manufacturing process within certain safety parameters.

Step 2: Build a Quotes Package

The next step is to get an estimate for the cost of production. 

This is usually referred to as a Request for Quotation (RFQ) package. It should specify the delivery of all necessary technical drawings, material quality requirements, the amount of materials needed, packaging needs (labels, certifications etc.), and an expected timeline for production.

Step 4: Send RFQs and Sort Manufacturers

Once you have compiled a list of potential manufacturers, it’s time to send out your RFQs. How each manufacturer responds will help you decide which one ones are worth considering. 

Here are some things to look for in their responses:

• Clarity: Clear communication shows the company understands what you’re asking and increases the likelihood that they’ll be able to deliver it. If their response is unclear, this could indicate potential problems in the long run.
• Detailed Pricing: Transparency about costs is a sign of a trustworthy manufacturer. If there are hidden fees or unclear pricing structures, you may risk being paying unfair prices or being overcharged through unexpected fees.
• Responsiveness: If a company responds quickly and provides regular updates, this is a sign that they value client and customer satisfaction and are more likely to keep you posted through the production process.
• Information Security: If you’re dealing with sensitive intellectual property, look for a company that is willing to sign a Non-Disclosure Agreement (NDA). This will allow for legal protection for both sides while protecting any industrial drawings needed for the RFQ of the company.

Step 5: Shortlist and Evaluate Final Candidates

Now that you’ve narrowed down your options, you’ll need to pick out the best manufacturer for your needs. We recommend creating a scorecard so you can accurately and objectively weigh the pros and cons of working with each manufacturer.

Some criteria to include on your scorecard should include:

• Manufacturing Capabilities: Can the manufacturer actually produce the product you want and to the scale you want it? Some manufacturers are fantastic at small scale, but struggle to produce runs with 1,000 units or more.

• Quality Management Systems: These are mostly governed by the International Organization Standard (ISO). Compliance with these indicates whether or not the manufacturing facilities meet a reasonable baseline for quality, safety, and efficiency.
• Previous Clients and Projects: Gauge a manufacturer’s capabilities by evaluating their previous completed projects and clients. Have they completed projects on a scale similar to yours? Do they have repeat business from high profile clients?
• Communication and Transparency: Communication is key. If the manufacturer communicates poorly or is not transparent about its practices, you’re more likely to run into issues and struggle to get them resolved.
• Sample Reviews and Audits: Having a sample made from your design gives you a good idea of the manufacturer’s quality standards. An audit might also be necessary to confirm that the facilities actually meets your standards. You can visit the factory or send a representative to inspect conditions on the production floor.

Step 6: Launch Your Project

Once you’ve selected a manufacturer, you’re ready to launch your project.

This will typically follow four cycles:

• 1. Prototyping/Sampling: This is the phase where your product concept is put to the test. Allow the manufacturer time to process the prototype, figure out how it can be made with their equipment, and then review the sample to see if it is made to your specifications.
• 2. Manufacturing Contract: Once the prototype is produced and sampled, you will need to draft and sign a manufacturing contract that covers all legal expectations, payment terms, quality control responsibilities, penalties, and other pertinent factors. If you don’t have an in-house legal team, hire a lawyer familiar with local, international, and industrial law to write and review the terms before signing.
• 3. Pilot Production: This phase tests out whether or not the manufacturer can produce the product at scale. This is when early issues are caught and corrected before moving to a full production run.
• 4. Final Product/Quality Assurance: The final step will be making the final version of the product, which is ready to be shipped to consumers. Be sure to institute quality control processes to check for defects or issues before sending the products to retailers and customers.

Manufacturing in Vietnam is a great way to bring quality, cost-effective products to market. The process is similar to the one you would follow with contract manufacturing in any country: clear communication, good documentation, and extensive vetting of suppliers and manufacturers.

For the best results, having a local presence or third-party support can ensure that everything is carried out to your specifications, while easily resolving issues that may develop throughout the process.

Q. Is Vietnam Affected by Trade Tariffs?

Yes, Vietnam is still affected by trade tariffs. However, Vietnam has been subject to lower export tariffs than China. The country also benefits from a number of Free Trade Agreements that mitigate or offset costs caused by tariffs.

Q. Are Labor Costs Lower in Vietnam Than Other Countries?

Yes. One of the primary reasons Vietnam is selected for manufacturing is that it is very cost effective in terms of labor. Vietnam’s low cost of living and wages that are approximately half those of workers in China make it an affordable option for manufacturing.

Q. What Type of Products Can Be Produced In Vietnam

Vietnam primarily produces electronics, textiles and apparel, footwear, automotive components , and other types of machinery. While there are plenty of manufacturers and suppliers covering other industries, these are Vietnam’s main export categories.