Do you know the difference between private label manufacturing and contract manufacturing? Find out what they are before getting into the private label business. It would definitely help you decide which will work best for you.
Private label manufacturing, whatever it is that’s being manufactured (in this case—pet food), is when a company manufactures products but are sold under another company’s label. It is positioned as an alternative product, most often a low-cost or cheaper product, to branded products of the same kind. For example, ABC Manufacturing makes raw dehydrated venison dog food for many companies like XYZ Petfood, 123 Dogfood, etc. These companies will then sell the product under their respective labels.
Private label contract manufacturing, on the other hand, is when a company outsources the manufacturing of, in this instance, raw dehydrated venison dog food, to another company. The company that outsources the manufacturing owns the specs, the formula, etc. of the product. The contract manufacturer (in this case, the company offering private label manufacturing) has no say about the product and its specs, etc. It just manufactures the product based on the specifications given by the owner company.
The upside of private label manufacturing is that one has quick and easy access to the product. It’s basically ready-made. All you have to do is put your label on to it. This gives you enough time to focus on selling and marketing the product under your label. Imagine having a raw dehydrated dog food beef flavor ready to market under your label. Now imagine the stiff competition you will have in the market as such product is generic and accessible to many. Now that’s the downside of PL manufacturing.
PL contract manufacturing
In private label contract manufacturing, you as a buyer have total control over the product. Usually, the contract manufacturer has the expertise and experience to make improvements on the product. You own the image down to the branding and packaging of the product. Say, if you are ABC Company and you have a dog food recipe in mind using raw dehydrated venison, the contract manufacturer can even help you fortify your formulation for the dog food. The best part here is that you can talk to and negotiate with the contract manufacturer when it comes to cost per unit. Usually, you get market pricing that’s lower that PL options.
However, what’s going against you here is the element of time as research and development on your product takes time. Plus, the start-up cost is higher compared to just engaging a private label manufacturing.
For your consideration
What kind of setup works for you? For practical consideration, one may opt for the easy way the PL manufacturing provides. But at the end of the day, would you have the means to battle it out with your competitors? As mentioned, you may face stiff competition as the product is market-ready.
It’s a different story though if you opt for contract manufacturing. You own your product totally. It’s just a matter of getting the right partner. Why not explore partnering with Addiction Private Label. You might even find the product range you need for your recipe. Contact us. Who knows, we might just be the right partner for your private label.
For further reading