Did you know that it is possible to launch a private label medical and cosmetic products without having your own production line? This is not a joke! This is possible by so-called contract manufacturing, which allows you to outsource the production of specialized products to a company that has advanced technological facilities. Find out exactly how the contract manufacturing works and what to do to launch your own brand product line.
What does contract manufacturing consist of?
By contract manufacturing is called a business model in which a company outsources the manufacture of products with certain specifications under its brand to another, external entity. Thus, it can be described as a kind of outsourcing. This type of imanufacturing is usually chosen by the companies that do not have the conditions, i.e. experience, qualified staff and adequate technical facilities, that would allow them to have their own production line.It should be noted that contract manufacturing is an excellent, above all, much cheaper alternative than building a production process in-house. instead of staff, buying machinery and acquiring know-how from scratch, the contracting company can leverage the experience and resources that the provider company has, without losing control over the production of its product range.
Are contract manufacturing and private label the same thing?
Sometimes contract manufacturing is confused with another business model, which is private label. However, it is worth bearing in mind that these are not the same models, although they are similar to some extent.
First of all, in contract manufacturing, the brand owner orders the contractor to produce the goods according to the requirements and specifications he has set, as well as having full control over the production line. Contract manufacturers must therefore strictly adhere to the principal’s guidelines.
In a private label strategy, on the other hand, private label products are also outsourced to another company, but based on the manufacturer’s formulas, technology and designs. Thus, the outsourcer has limited decision-making power in the production process and thus little influence on the final result, and his input is often limited to the choice of the packaging design.
Who can use the contract manufacturing and in what situation?
Contract manufacturing can be used by almost all companies and enterprises, both smaller and larger, start-ups and the oneswith a long track record in the market. It all depends on the capabilities of a given company and its needs. For example:
- A pharmacy chain may contract a pharmaceutical company to produce a line of private label painkillers.
- A popular personal trainer can benefit from the contract manufacturing of a range of sports nutrition products, branded with his own name.
- A celebrity can developher own brand of cosmetics, which will be produced for her by a contract manufacturer.
There are many examples, and it is certainly worth using contract manufacturing if you have an idea for an interesting product and no ability to manufacture it in-house.
Which products can be outsourced?
Contract manufacturing of dietary supplements, various medical products, cosmetics or perfumes are the most popular in our country. It is worth to know that the launch of a product that is a cosmetic or a dietary supplement often does not require specialized approvals and laboratory tests.
In addition, this type of manufacturing is used in many other industries (such as the manufacture of semi-finished products, machine and equipment parts, food, clothing, footwear and many, many others).
Advantages of contract manufacturing
There are numerous benefits of contract manufacturing, including:
- reducing production costs,
- The ability to easily launch a product line under your own brand,
- Safety and control of manufacturing of supplements and cosmetics,
- The opportunity to benefit from the experience and knowledge of the manufacturer,
- Assistance in obtaining the appropriate approvals (if required)
Stages of the contract manufacturing process
Contract manufacturing consists of several stages. First, of course, there is the commissioning of the product, as well as an initial discussion of expectations regarding its formula and final outcome. At this moment, the size of the production run is also determined. Then the ordering party and the contract manufacturer work together to create a prototype until it is satisfactory and meets the ordering company’s expectations.
Before serial production takes place, the product still has to undergo tests and research to ensure the safety of customers who will use it in the future. If they come out positive, the registration of the product in the relevant database takes place and the actual production and launch on the market begins. Done, the company can enjoy its branded product!
What is the contract manufacturing – Summary
The process of contract manufacturing is about providing production services for a company by another entity, using its equipment and technology. This allows companies that do not have a production line or the appropriate technology to launchtheir own product using the capabilities of other companies.
If your company is planning to outsource the production of dietary or nutritional supplements, be sure to check out Exim Pharma’s offer! We ensure the highest product quality and world class manufacturing standards!