First-time working with a contract manufacturer: what is the process for working with a contract manufacturer?
In this blog series, we outline what you need to know when it’s time to start working with a contract manufacturer. This is an exciting and sometimes terrifying time and we can help you prepare for this journey.
Now that you know some of the basic lingo from part 1 of this series, let's dive into the general process. The real key to having a successful product launch and relationship with a contract manufacturer is to understand the process of creating a beauty product.
This means, sitting down to make some decisions to help guide the discussion once you find a contract manufacturer.
For timing, you need to start the development process of a new product 18 months prior to your target launch date. If you are curious about what key milestones you should be looking at, we offer a free timeline development tool to help you gage the timing of certain processes.
This 18 months timeline includes creating your product brief, which gives you the chance to guide your vendors. So below is a list of questions to ask yourself when thinking about the product you are developing:
What product do you want to make? Determining the type of product you are making — whether it’s soap bars, liquid soap, eye shadow, lip gloss or body cream — will determine the different manufacturing environments and techniques needed. Many fillers have a specialty and the best fillers tend to be the best at sticking to their specialty and referring you to another company if they don’t make what you’re looking to make.
How many units do you want to make? Whether you are making 1,000 units or 100,000 units will greatly impact who will be willing to work with you.
What is the total cost of goods you are trying to hit? Knowing this number is very important for the health of your margins. For example, if you can decide from the beginning that you want to sell a product for $35 on e-commerce and 40% of that for wholesale, but you want to make a 60% margin on wholesale, you can pretty easily determine what you are able to spend per unit to hit your margin goals.
Do you want to have a specific active ingredient in your product or do you just need it to feel and smell nice? Many times fillers will have already developed “stock” or “off the shelf” formulas you can marginally personalize to make it smell and feel the way you want. Using this method takes about a quarter of the time and half the development cost compared to starting from scratch.
Once you have all of this figured out, you are ready to find fillers in the area you want to manufacture. From this point, you’ll want to vet potential fillers by finding out what their minimum order quantities are, what their specialties are, what their research & development costs are, etc. After that, it’s about building a relationship with your filler and proving that your brand is one they’ll want to work with over and over again.
If you find any or all of this overwhelming, give us a call. We’d love to chat about how we can help you find the right contract manufacturer for your project. We have relationships with a variety of vendors across the country and can help jump start this process for you. Contact us below to get started.