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Tropical Labs

Your place for contract manufacturing industry information

05
Jan

The “Average Joe’s” Guide To Contract Manufacturing

Written by Kim Canavan -

CEO Spotlight

Nobody can do everything, even if you’re the most diligent and hardworking person. The same is true in business; companies rely on other providers at some point for them to fulfill their products or services deliverables.

The process is called contract manufacturing, when a company enters an agreement with another company or contract manufacturer to help them make particular components or products over a specific time frame. It is considered a form of outsourcing since contract manufacturers are third-party organizations that produce products for a client company.

Contract manufacturers offer various services, including but not limited to designing prototypes, formulating solutions, manufacturing and production, assembling, packaging, and shipping. Because it can cover a broad scope of services, contract manufacturing can be done in almost every industry. For instance, startups and small businesses outsource their manufacturing process to save on overhead costs. Large enterprises use contract manufacturers to simplify production while ensuring high-quality products or results.

The Convenience Of Contract Manufacturing

Every business should strongly consider working with a skilled contract manufacturer rather than doing all processes in-house. If you are considering or contemplating going for contract manufacturing for your business, here are some of the benefits it can bring to the table:

Faster Production

Contract manufacturers have the in-house resources and tools to consistently and quickly manufacture products. Thus, ensuring faster production that can help fulfill orders on time.

Higher Quality Results

Contract manufacturers typically have a skilled team, experts, and advanced manufacturing tools which help create superb products.

Cost Efficiency

Enlisting a contract manufacturer’s services can help save you money as you don’t have to spend a budget on facilities, equipment, maintenance, manpower, and labor – all of these are included in the service fees of your manufacturing contract.

Time Savings

Leaving your production in the hands of contract manufacturers gives you much more time to focus on different aspects of your business that could improve profit.

Scalability

You can immediately scale up production in contract manufacturing without incurring high costs since all materials are ready and purchased in bulk, which is cheaper in terms of the base price. Additionally, since production is fast, you can get your product to market in as little as a few weeks in some cases.

Different Ways To Launch A Product Through Contract Manufacturing

Contract manufacturers offer you multiple ways to get your business or product on the map. You can engage with several contract manufacturing arrangements, such as private label deals, ready-to-finish arrangements, full-service research and development (R&D), or through technology transfer.

Private Label

The private label or stock formula is the easiest and quickest way to get your product into the market. It is a plug-and-play approach where the contract manufacturers will be the ones to take care of your product’s formulation, manufacturing, and packaging, and all you need to do is sell them. This method is preferred for small and startup businesses who want to focus on other aspects of their business, like marketing. At the same time, the contract manufacturing partner develops and produces their products.

Ready-To-Finish

Ready-to-finish contract manufacturing is somewhat similar to private label. Only this time, the hiring company has a little more input regarding their product formulation. In addition, the hiring company will also influence the packaging of the products instead of leaving everything to the contract manufacturer.

Full-Service R&D

This contract manufacturing arrangement entails a full collaboration with the contract manufacturer regarding your product’s formulation, design, testing, and packaging. With full-service R&D, you have guidance and assistance through the different specific processes to help you launch your product and have total input over everything. Additionally, the contract manufacturer’s expertise and professional insights can help you tweak your product to make it unique and stand out even more.

Technology Transfer

Technology transfer has existed in the business industry for a long time. Technology transfer contract manufacturing uses another company’s data, inventions, designs, technical knowledge, or trade secrets to help improve and manufacture your product. Others may see this as blatant copying, but that is not the case. Policies and procedures guide this process and give value to all the organizations involved.

Let’s Get You Started With Contract Manufacturing!

Tropical Labs is here to bring your innovative product ideas into reality! We’re a full-scale private label and contract manufacturing company that can help you conceptualize and develop products you’ll be proud to put your name on.

We offer private label, ready-to-finish, and full-service R&D contract manufacturing services that suit industries like beauty, household, personal care, pet care, plant-based, and over-the-counter (OTC) products.

We’re here to help our partners succeed. Contact us to learn more about our contract manufacturing capabilities, and let’s get started on your next product launch!

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Kim Canavan

Kim Canavan

President at Tropical Labs

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