5 Important Questions to Ask Yourself When Choosing Your Ideal Contract Manufacturing Partner

Manufacturing has seen its shares of peaks and valleys in the past two years. Though each industry’s experience has been unique, they’ve all had to adapt in some form.

Contract manufacturing partner

Take the beauty industry, for example. For that $530 billion market, the past couple of years have been mainly about survival. As the world battled a deadly pandemic and its economic fallout, beauty consumers began shifting their dollars elsewhere. As a result, 2020 saw the sales of color cosmetics sales plunge 33%, and overall retail beauty sales fall 15%. But beauty is nothing if not resilient, and experts are forecasting a return to growth in 2022.

Such news probably comes as a relief for beauty and personal care brands, but now isn’t the time for any industry to rely on such predictions. As the sun (hopefully) sets on “how to survive” and as we shift to “let’s thrive,” your company needs to turn its attention to refining processes and partnerships. One of a brand’s most critical collaborators is its contract manufacturing partner.

Taking a Closer Look at Your Contract Manufacturer

When was the last time you assessed whether your manufacturing partnership was still meeting your business’s needs? The answer probably depends on a whole host of factors, including how long you’ve been in business, your business strategy, manufacturing costs such as raw ingredients, production timing, etc.

For example, if your brand is new and aims to scale quickly, you might begin searching for a contract manufacturing partner that specializes in speed to market or product scale-up. Or perhaps your brand is more established but you’re looking to expand your distribution and product offering. In that case, you might need a second contract manufacturer that can help take on some of your production needs.

When evaluating a partnership based on manufacturing costs, you have some important elements to consider. The first would be to look at that vendor’s minimum order quantity (i.e., the fewest number of units you must purchase at one time). Next, ensure that you see clear pricing structures so you’re not hit with any last-minute surprises.

Each brand’s journey is different, and you need to be sure your solutions are still working for you as circumstances change and your business evolves. For that reason, you should choose a partner that aligns with your business plan, whatever that means for you.

5 Important Questions to Ask Yourself

After weathering the same uncertainty many felt at the peak of the pandemic, contract manufacturing is on the rise once again. Research shows that the contract packaging and contract manufacturing industry is forecast to hit 10.2% compound annual growth rate through 2025 — that’s a projected revenue of $121 billion, nearly double the total from 2019.

That’s a lot of promise to look forward to, but don’t bank on those forecasts alone to guide your future partnerships. Here are some questions you should ask yourself when reviewing a potential contract manufacturing relationship:

1. Is its speed to market up to snuff?

A clear production timeline is very important because you likely have your own launch timelines to hit. Therefore, ask yourself: Is your potential partner capable of helping you stay on track toward those benchmarks? Make sure you can rely on the manufacturer to stay on pace with your desired timelines so you can both meet those established deadlines.

2. Does it prioritize continued innovation?

Trends come and go. Try to team up with a manufacturer that shares your enthusiasm for continuous evolution in terms of product creation and improvement. If not, you run the risk of the competition swooping in and grabbing parts of your market share.

3. What are its production capabilities?

Does it offer custom-formulation, private-label contract manufacturing? Is it fully turnkey? Bring these answers into focus and align them with what your company does well or needs to improve.

4. Is the manufacturer a true partner?

Does the manufacturer offer any added-value services to support your brand growth? This might look like product education, marketing, or graphic design. Additionally, what’s the path to formulation ownership?

5. Has communication been transparent?

Is your partner optimistic to a fault? A good manufacturing partner will share the good news and the bad news (e.g., delays, supply chain issues, etc.). Find a manufacturer that understands there’s something to learn from both positive and negative updates.

As you enter the new normal, consider how you can continue refining your business processes and assessing your partnerships to build a stronger business that can withstand whatever the future may hold.


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