RushRoot COGS Comparison: U.S. vs. Vietnam Production (2026-2030)

 

Overview

Comparison of Cost of Goods Sold (COGS) per unit for RushRoot protein drinks (12 oz/355ml, 1-quart/946ml) produced in the U.S. (original plan) vs. Vietnam (RushRoot-BIG4 Exports, Inc.) over 5 years, based on the RushRoot Business Plan 2025: Premium Reseller Margins with Dividends. Includes 5% promotional samples.

 

Sales Volumes

• Year 1 (2025): 1.82M units (1.08M × 12 oz + 0.74M × 1 quart).

• Year 2 (2026): 3M units (1.8M × 12 oz + 1.2M × 1 quart).

• Year 3 (2027): 4.5M units (2.7M × 12 oz + 1.8M × 1 quart).

• Year 4 (2028): 6M units (3.6M × 12 oz + 2.4M × 1 quart).

• Year 5 (2029): 7.5M units (4.5M × 12 oz + 3M × 1 quart).

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​​Key Assumptions

• U.S. Production:

  • Manufacturing: $0.30 (12 oz), $0.80 (1 quart).

  • Fixed Facility Cost: $500,000/year (LA co-packer).

  • Delivery: $0.02/unit.

  • California Use Tax: 10.25%.

  • Samples: 5% of units at $0.50/unit.

  • No freight, duties, or broker fees.

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  • Vietnam Production:

    • FOB: $0.142 (12 oz), $0.40 (1 quart).

    • LLC: $26,248/year (Years 1–2), $40,648/year (Years 3–5, second employee).

    • Logistics: Freight ($1,700/container), export fees ($315/container), insurance (0.75%), duties (6.4%), MPF (0.3464%), use tax (10.25%), port fees ($220/container), broker ($1,500/batch).

    • Samples: 5% of units at $0.3677–$0.3803/unit.

• HTS Code: 2106.90.99 (6.4% duty for Vietnam, none for U.S.).

• Tariff: 0% for Vietnam (MFN rates, post-settlement).

 

Notes

• Savings Trend: Vietnam COGS is 42.4–57.9% lower than U.S., with largest savings in Year 1 ($0.5227/unit, 57.9%) due to low FOB costs ($0.142 vs. $0.30, $0.40 vs. $0.80). Savings decrease as U.S. scales (fixed $500,000 facility cost spreads over more units).

• Vietnam Advantage: RushRoot-BIG4 Exports leverages Vietnam’s low labor ($1,200/month coordinator) and supplier proximity (RITA Beverage), with LLC costs dropping to 0.5% of COGS by Year 5 ($0.0054/unit).

• U.S. Advantage: No import duties, freight, or broker fees, but high manufacturing ($0.30–$0.80 vs. $0.142–$0.40) and facility costs ($500,000/year) inflate COGS.

• Risks: Vietnam’s 0% tariff may revert to 10% (+$0.047/unit, e.g., $85,540/Year 1). U.S. faces higher labor inflation (3–5%/year).

• Recommendations:

  • Maintain Vietnam production for COGS savings ($0.3677–$0.3870 vs. $0.6698–$0.9030), enabling 50–60% reseller margins ($1.25–$2.50/unit revenue).

  • Negotiate FOB discounts ($0.13, $0.35) with RITA Beverage for 6M–7.5M units.

  • Confirm HTS 2106.90.99 (USA Customs Clearance, 855-696-7434).

  • Monitor ustr.gov for tariff updates.

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Sources: Statista, Viettonkin, Vietnam Briefing, USITC, CDTFA, Freightos, USA Customs Clearance.

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Overview and Insights

• Vietnam COGS: Ranges from $0.3677 (Year 3) to $0.3870 (Year 4), with a slight dip in Year 3 due to optimal LLC cost allocation ($40,648 ÷ 4.5M = $0.0090/unit). Years 4–5 rise slightly due to higher container volumes (168–210) and fixed LLC costs.

• U.S. COGS: Decreases from $0.9030 (Year 1) to $0.6698 (Year 5) as fixed facility costs ($500,000) spread over more units (1.82M to 7.5M). Still 42.4–57.9% higher than Vietnam.

• Savings: Vietnam saves $0.2842–$0.5227/unit, with the largest gap in Year 1 (57.9%, $0.5227) due to low FOB costs and minimal LLC overhead ($26,248 ÷ 1.82M = $0.0144/unit). Savings narrow by Year 5 (42.4%, $0.2842) as U.S. scales efficiently.

• Vietnam Advantage: RushRoot-BIG4 Exports leverages Vietnam’s low-cost labor ($1,200/month) and supplier proximity, with LLC costs dropping to 0.5% of COGS by Year 5. Enables higher margins ($1.25–$2.50/unit revenue vs. $0.3677–$0.3870 COGS).

• U.S. Challenge: High manufacturing costs ($0.30–$0.80) and fixed facility expenses ($500,000/year) make U.S. production less competitive, despite avoiding import costs.

• Strategic Implication: Vietnam production supports RushRoot’s 50–60% reseller margins and EU export potential (via EVFTA and Western-owned LLC trust), while U.S. production risks lower margins ($0.6698–$0.9030 COGS vs. $1.25–$2.50 revenue).

 

Recommendations

1. Stick with Vietnam: Maintain RushRoot-BIG4 Exports for 42.4–57.9% COGS savings ($0.2842–$0.5227/unit), funding marketing stunts and EU expansion.

2. Optimize FOB: Negotiate with RITA Beverage for $0.13 (12 oz), $0.35 (1 quart) at 6M–7.5M units, potentially lowering Vietnam COGS to ~$0.35.

3. U.S. Contingency: Explore U.S. co-packers only if tariffs rise (e.g., 10%, +$0.047/unit) or EU markets demand local production.

4. Compliance: Confirm HTS 2106.90.99 (USA Customs Clearance, 855-696-7434). Monitor ustr.gov for tariff updates.

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We also put RushRoot Vietnam structure under a stress-test. 

 

Conclusion: 

The Vietnam Strategy withstands tough stress tests, with COGS rising 2.6–28.8% ($0.3813–$0.4777) at 25–75% sales.🚀

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