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Does Vietnam makes business sense for you. Low minimum clothing manufacturing in Vietnam does not always make good business sense.

The main reason to produce in Vietnam is to get quality at a low price. The two main components of price are labor costs and fabric costs (aka raw materials.) Let’s look at labor costs. Vietnam’s minimum wage ranges @ $190 per month compared to China’s which ranges @$350. Based on labor cost alone, Vietnam does make business sense. But, when it comes to fabric, it’s a different story. 70% of the fabric in Vietnam is purchased from China. Chinese sewing factories can buy the same fabric cheaper and faster. Based on fabric costs alone Vietnam doesn’t make business sense. In order to get cheap, quality fabric from China you must buy large quantities and negotiate sweetheart deals. Note that there are additional shipping costs to get the fabric from China to Vietnam. Keep that in mind if you want to do small batch clothing manufacturing in Vietnam.

So, if you are already established in China and doing small quantity, I recommend you stay in China. It doesn’t make business sense to pay to maintain two production centers: maintain your China production and find new factories in Vietnam is too costly.

If you are not established in China then I recommend starting in Vietnam, knowing that, in the beginning your Vietnam price probably will be higher than the China price because of the fabric issue. (Raw Material Issue)

Here are 5 reasons why I recommend Vietnam:

Vietnam labor costs will always be lower than China
Vietnam is getting better at producing fabric locally
Vietnam has a western business friendly environment more so than other asian countries
It’s safe, easy and pleasant to travel in Vietnam
Finally, Vietnam is known for quality

In summary, when you can source your fabric in Vietnam then Vietnam makes business sense if you can meet the fabric MOQ. For small batch clothing manufacturing in Vietnam you will need to buy stock fabric. For that matter, getting any raw materials made in Vietnam for any product category is one key to success here.