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Contract Manufacturing vs. Private Label

Contract Manufacturing vs. Private Label

Contract Manufacturing vs. Private Label

If you’re looking to produce and sell a new product but need to partner with a larger manufacturer to meet your production needs, two popular options are contract manufacturing and private label manufacturing. Both types have an end goal of making high-quality products, but the processes for accomplishing this goal have several significant differences.

What Is Contract Manufacturing?

The basic definition of contract manufacturing is an agreement between a company and a manufacturer to make a certain number of products in a certain amount of time. With contract manufacturing, the company approaches the manufacturer with particular product specifications so they can produce the item in their facilities. The manufacturer may offer suggestions and advice based on their experience, but the company retains control and responsibility for the final product. 

Is Contract Manufacturing Right for My Business?

Contract manufacturing gives you and your company full control over the product. You will retain all of your branding, imaging and package control, and you will specify the standards and testing the manufacturer must adhere to. 

By partnering with an experienced, reputable manufacturer, you will benefit from their advanced skills and production methods, which can lead to improved processes, reduced turnaround times and overall lower costs. And since you are contracting the manufacturer, you have more opportunity to negotiate market pricing.

What Is Private Label Manufacturing? 

With private label manufacturing, your company puts its name on a product that the private label manufacturer has already designed and produced. In this case, the manufacturer will typically have control over the product specifications and manufacturing process. 

Private label manufacturing works well for businesses that do not have the time or resources to develop a product on their own — typically, these companies are simply looking to add something their customers want to their product line. Private label manufacturing is also a popular choice for grocery stores that want to have their own brands on the shelves alongside other industry leaders. 

Is a Private Label Contract Right for My Business?

A private label contract gives you the ability to hit the ground running. You will have quick and easy access to the product with no design or engineering phases needed before bringing it to market, which means lower initial costs. And because the private label manufacturer owns the product, they bear responsibility for ensuring that the product meets all mandated standards, taking the burden off of you.

However, a private label contract means you do not have control over the product that you are putting your name on. You won’t have any say in the production process, you won’t own the formula or design, and you won’t have control over when and how any tweaks are made to the product. Private label manufacturers also supply products to multiple companies, so your competitors may be selling the exact same items. 

Overall, if you would prefer to just put your brand name on a product that already exists, a private label contract might be the best fit. However, if you’ve designed a product and just need a factory to produce it for you, contract manufacturing will afford you much more control over the end result. 

If you are looking for a contract manufacturer or need assistance with any part of the process, PBZ Manufacturing is the full-service metal fabrication company you need. Submit a quote form today to get started.  

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