Difference between Contract Manufacturing & Private Label Skin Care in Malaysia

So lately, we’ve been selling readymade products using the existing recipes  we have that you can simply buy the products (minimum 50pcs), relabel and sell under your own brand. 

And this has led to some of you asking the difference between a “private label”and “contract manufacturing/OEM”

So we decided to make a quick short post to explain the difference which will be useful to you when deciding what you want for your business.  

Private label 

Using a tested formula by your manufacturer and adding your name and logo to it.  Simple right? That's what our readymade products. 

Tried and tested formulas you can use and relabel. 

Pros: Doing it under “Private Label”

1. Usually the manufacturer doesn’t let you change the formula.
2. The formula is already tested, ready to use without worry
3. You don’t need to do testing all over again, meaning production time is SUPER FAST.
4. Less hassle- all you have to do is label, brand and market it. 

The Cons: 

1.         There’s a chance you might not like the ingredients
2.         Some changes that you think are small, might mean major changes and make it fall under the category of “Custom Manufacturing”
3. 
   

Who is this suited for: 

1. If you want to sell homemade products to customers who care about the ingredients
2. If you are just starting your business 
3. If you have no knowledge about product formulation

Who it is not suited for:

1. People who want to do very high volume distribution, in the millions. In this case, it is worth going under custom manufacturing
2. If you are afraid that your manufacturer might end up going into direct selling and become your competitor. Check with your manufacturer that they do not have their own brand of products. 

The next one, is 

Custom Manufacturing

This is where you provide the manufacturer with your recipe and/or ingredients or a product you want to copy and ask them to create a similar product. 

Pros:

1. Make their own products and are ready to grow.
2. People who make their own products and you just want to get someone else to do it. 
3. If you want your own very unique brand and ingredients
4. Anyone who is currently making their own products and is ready to expand
5. Anyone who ready to create a product and market. 

Cons: 

1. Lab Costs are very high. 
2. New product development takes many months 
3. Finding the right lab can be challenging
4. To patent the formula is a long process. If you don't, you do not own the formula you requested for.

So those are all the differences, leave comments if you have any

questions