Are you entering the world of contract manufacturing for the first time?
Frustrated with an existing manufacturer?
Looking to expand your product line or increase your volume and need fresh guidance?
We consider it part of our mission to clear up confusion and inspire confidence on a critical decision that has a significant hand in your success. It’s vital to be aware of the tricks of the trade so you can maximize your manufacturing relationships and be ready for problems before they arise.
What type of Contract Manufacturer Do You Need?
Contract manufacturing has become compulsory in the modern nutraceutical industry. A long way from cottage days of “garage” production, the supplement manufacturing arena of today is a shrewd, dynamic, competitive business. The good news is that options abound. But it’s not as easy as clicking on the leading Google search.
Full Turnkey
Most top-tier contract manufacturers (CM) offer “full turnkey” or “end-to-end” services, meaning they will formulate, source, produce, package, and label your product. Like a general home contractor, this option is the way to go for efficiency, simplicity, and uniformity.
Pros:
- Established supply chains
- Solid quality management systems
- Streamlined communication
Cons:
- Limited control
- High MOQs
- Less negotiability
Private Label
Startups sometimes opt for private label manufacturers to kick off their initial product line. In this case, brands might “customize” an existing formula or change nothing at all. Requiring the least knowledge and effort, private labeling can be a prudent way to get started and get up to speed with the standard ways and means of the nutraceutical industry.
Pros:
- Less decision-making
- Quick turnaround times
- Verified product feasibility
Cons:
- Poor visibility
- Higher cost
- Restricted growth
Partial Service
More intrepid, Type-A entrepreneurs or brands desiring specialized services might arrange a suite of subcontractors to optimize their product design and business strategy. Armed with knowledge, patience, and determination, lining up the best-of-the-best is not without merit and might save cost.
Pros:
- Maximum control
- Greater product flexibility
- Cost maneuverability
Cons:
- Time-intensive
- More room for error
- Requires strategic communication
Most small to mid-size brands choose full turnkey service, and it’s the option we typically recommend to our clients as part of our custom formulation process. Manufacturers with comprehensive capabilities offer the broadest scope for customization and scale. And ideally, the company and facility follow a consistent quality program from end to end.
Key Considerations for Selecting a Contract Manufacturer
In addition to the baseline pros and cons we’ve noted, selecting the best contract manufacturer for your products comes down to a few key considerations. The more unique and specific your requirements or preferences, the fewer options available. At a glance, the chief variables are:
Volume
Large, in-demand manufacturers come with high minimum order quantities (MOQs). For brands just getting started with an initial run of 5,000 units, volume might be decisive in ruling out options. Matching the size of your project with a manufacturer’s capacity is a crucial first step.
Capabilities & Expertise
If your product has unique features, here’s where your research counts. Does your formula have inflexible ingredients or characteristics that may require special processing, handling, or equipment? Just about every CM can produce capsules, but gummy or powder manufacturers are less ubiquitous.
Budget
Our options are always limited by budget, right? But hopefully it’s not the only deciding factor. Many new brands make cost their sole criteria and pay for it later. It’s not unusual to let marketing dollars predominate, but the ultimate success and longevity of your brand may depend on the performance of your manufacturer.
“You get what you pay for” doesn’t always apply, but in the world of contract manufacturing, it typically holds true. The best CMs are reasonable and negotiable, seeking to earn your business and your loyalty. Quality manufacturers are worth their premium.
Quality Contract Manufacturers
Once you place a purchase order, your CM buys into the quality of your product. From a regulatory perspective, anyone who handles a product intended for human (or pet) consumption at any stage is accountable for its safety. Since you as the brand owner hold overall responsibility, it’s imperative that your contract agreement is mutual, and your concept of quality is shared.
Savvy brands should understand the best practices and obligations of a contract manufacturer in producing high-quality products and providing proper customer service. Whether you’re a novice or a hardened expert, having solid knowledge of the rights and wrongs of manufacturing practices pays off in the end with greater product confidence and solid partnerships.
These four foundational qualities should be non-negotiables in any contract manufacturing partnership:
- Collaboration. In any business transaction, a service provider should strive for customer satisfaction. Trusted manufacturers are collaborative in listening to your ideas and developing processes that optimize your product.
- Cooperation. Things can and do go wrong. Professionalism and integrity are tested under pressure, so brands should have up-front discussions with their CMs on how each party will cooperate through both routine and rare events.
- Communication. Consistent and transparent communication should be present from quotation through delivery. One-on-one attention and familiarity should never go out of style. Quality manufacturers have nothing to hide, and open problem-solving is their instinct.
- Commitment. A manufacturer’s level of commitment to excellence is made apparent in the quality of their contracts. Solid terms and make-it-right guarantees should be well-understood up front. Quality certifications and third-party accreditations are requisite indicators of reliability and authenticity.
Buyer Beware
Now that we’ve covered the ideals, let’s balance out the contract manufacturing landscape with reality. For every reputable, dependable CM, there are dozens of shameless or incompetent players concealed behind a credible varnish. While it’s not necessary to enter every conversation with cynicism, there are clear signs that should be deal-breakers when seeking a contract manufacturer.
Keep an eye out for these notorious red flags that deserve your vigilance:
Inexperience.Formulation flubs in quotes or skipping bench tests can suggest general ignorance of scientific or technical concepts and a lack of sufficient personnel qualifications. And if the question of “quality” or “cGMP” compliance is returned with an echo, you can probably save yourself the trouble of further pursuit.
Secrecy. As we mentioned earlier, brands and their manufacturing partners share mutual accountability for verifying a product’s quality. As such, information-sharing should be welcome and accessible. With a solid confidentiality agreement, CMs are obligated to supply documented proof of quality, from ingredient traceability to batch release. Ambiguous practices are harbingers of ongoing disclosure battles.
Manipulation. Customer respect shouldn’t be a priced commodity, but unfortunately, it’s not unusual for smaller brands to get the boot when big money comes along. If your contract manufacturer is unwilling to commit to a delivery timeline (beyond force majeure), it’s cause for pause.
Other manipulative behaviors might occur when manufacturers are at the mercy of their own risky business practices. Put everything in writing and read the fine print. Don’t leave yourself vulnerable to scare tactics, bribes, and threats. Remember: it’s your product.
Where to Find Contract Manufacturing Expertise
At Hydroscience, we shoot our clients straight, but we don’t aim to discourage. We’ve learned the ropes of contract manufacturing by experience, so we can save you the anxiety and frustration of working with irresponsible or dangerous dealers. Selecting a contract manufacturer and trusting them with your product is akin to putting your business into their hands, so we understand what’s at stake.
As part of our custom formulation packages, we only engage with exceptional manufacturers with a proven track record of product quality and service excellence. Whether you’re just starting out or looking for a necessary switch (or escape), we’re here to advise or facilitate rewarding manufacturing relationships to get you to a satisfying and successful finish line.
Contact us today!
