Private label supplement manufacturing involves a lot of business processes and niche knowledge. It is possible to independently go through the cycle from an idea to receiving a finished batch of goods, but it is too expensive.
Contract manufacturing shortens the path to profit: your strategic partner is responsible for development and production. This is a hired company that designs and creates complex chemical products on demand. Such a partner already has a network of suppliers, technologists, lawyers, and designers. You come to the manufacturer with a product idea, sign a contract, and the company fulfills the order.
Why Contract Manufacturing Is Beneficial to the Customer
Hiring staff, setting up a laboratory and a company takes time. By signing a contract with a manufacturing company, you will have access to ready-made formulas and warehouse stocks of components. You can release your product earlier and start selling it.
In-house production is significantly more expensive than using the services of a contract manufacturer. The cost of employing a team of specialists, purchasing or renting a facility, and equipment can be disregarded and the price of the product can be negotiated. Another advantage is that manufacturers can purchase ingredients for creating supplements on wholesale terms, which also saves money. Contract manufacturing reduces costs by at least 25%.
Greater Marketing Potential
If you reduce overhead costs and outsource most of the operational processes, you will free up resources for advertising and promotion. Some companies offer help even in finding sales channels.
The quality control department at the outsourcing enterprise guarantees that the product will pass labeling and certification.
Product Line Expansion
The contract manufacturer of additives conducts research, tests ingredients in laboratory trials, and each stage has been worked out multiple times. With such support, you can expand the range of products and not get stuck in developing each one separately.
Transparent Processes and Access to Information
The company shares data on patented ingredients, packaging design trends, and regulatory nuances of registering a new product. You are not constrained by factory management and associated risks. But you also do not depend on a private contractor who keeps their processes secret. Open dialogue and accountability for contract work create space for business development.
Stages of Cooperation
Private label manufacturing of vitamin and mineral supplements, sports nutrition and drugs at the first stage does not differ. To start development, you and the contractor discuss:
- the purpose of the supplement;
- list of required ingredients;
- components to be excluded;
- unique specifications: organic, hypoallergenic, gluten free.
2. Commercial Offer
After that, the contract manufacturer takes a break to draw up a commercial offer. This stage takes from 48 hours to several weeks. It depends on the complexity of the request, the workload of the enterprise and the level of organization of management processes within the company.
The sales department informs how much the order costs, what time frame you will receive the batch in. Ingredients, specifications, packaging details and batch size are discussed again to avoid inaccuracies. After that, you sign a contract.
Representatives of different departments, such as project managers, engineers, technologists, designers and label proofreaders, cooperate with one another. While the manufacturing company is preparing the batch, you keep in touch.
5. Quality Control
The company delivers the ordered product and you can verify that it meets the specifications.
Who Can Become a Vendor
The company you conclude a contract with must have all the qualities and resources that are necessary to manufacture your dietary supplements:
- clean reputation;
- qualified employees;
- quality certificates;
- stock or arrangement to supply the required components.
If you are considering getting vegan, gluten-free, lactose-free, or any other ingredient-restricted supplements, check to see if the company makes them and has the appropriate certificates, materials and equipment. You can check the documents, arrange a visit to the production site, and chat with the team.
Find out the minimum order quantity. Usually, it is 1000 pieces, but there are exceptions.
Specify options for packaging, delivery and storage. Large contract manufacturers offer assistance in these matters as well.
Design and labeling is another topic for discussion. If the cooperation turns out to be fruitful, sooner or later you will want to update the product, or at least its appearance. Ask if you need to look for an individual artist or the company is ready to do this, too.
Find out delivery times. They may take longer than you expect. Or so short that it will damage the quality of supplements.
Ask about research and formulation development, including how big the team is and how competent the workers are. The supplement formula you have in mind can be tricky to execute.
Familiarize yourself with the types of ready-made supplements, such as capsules, tablets, gels, powders. Some companies work with only one or two of them.
Look for a partner who is easy to do business with because you will work closely and communicate a lot. Time and method of communication, friendliness, honesty of answers – everything matters. The project manager is able to warn against a bad decision and explain why it is bad:
- complex logistics;
- expensive or rare ingredients;
- no sense in terms of ROI;
- unable to meet industry standards.
You should look for a partner to succeed, and therefore the requirements are high.
Private label supplement manufacturing will be most efficient and manageable if it is outsourced to a company. By reducing the cost of maintaining your own factory and the staff of technologists, engineers, nutritionists, you will make the product more attractive to customers. It will also get to the market faster, and the price will not be too high. It is easier to get the right recipe, use high-quality raw materials and get the batch on time if this is done by a partner company.