How To Choose The Best Cosmetics/Personal Care Manufacturer.
Whether you are a large multinational company looking for a new private label opportunity or the manager of a small brand ready for large scale production, selecting the right manufacturer for your product is key to your overall success. Even before you deploy that new marketing campaign or hire that new market researcher; decide which manufacturer will give you the biggest and best bang for you buck.
I am a customer service rep who has worked in the industry for almost six years-to-date. Therefore, I have seen the inner workings of the industry from nuts to bolts. Below I have tried my best to outline the key considerations when searching for your ideals manufacturer or manufacturers.
Try To Find A Specialist.
Well it goes without saying, no one person is good at doing everything. This goes double for manufacturers. Some manufacturing operations like to paint themselves as all-in-one/multi-purpose operations. And while it is true that some of them can provide a variety of services; you must question whether they can provide that service in the timely, efficient manner that your business needs.
I once worked for a manufacturer for whom 90 percent of their business came from the manufacture of lip gloss and other lip enhancing products (think lip plumpers, lipstick, etc). Yet, they still chose to market themselves as a company specializing in multiple product categories. Needless to say, working in customer service was a miserable experience as there were dozens of production and shipment delays each week but no real way for me to rectify the problems. To avoid this scenario, make sure you ask your manufacturer the following questions:
What spare production capacity do you currently have for my product category?
Do you have warehousing and storage space for my products/raw materials?
What is the typical production lead time for my product category?
What is your operating policy regarding back orders and late orders?
Make Sure the Proper Agreements Are In Place.
I know everybody hates paperwork, but in this instance paperwork can really save your business. Before, sourcing, purchasing and production is carried out by the manufacturer, make sure the proper documentation is in place. For instance, standard manufacturing agreements are needed to specify and routinize the most basic aspects of production. Also, ownership, privacy and non-disclosure agreements ensure that you (the customer) retains full control to the rights of the product in question.
The latter set of agreements (privacy and NDA) are especially critical. In a age where manufacturers from certain areas (cough, cough....China) feel the need to create knock-offs that they can later sell at a higher margin; any kind of privacy for your formulations/packaging/design is in your best interest. Here are some questions you may want to ask your manufacturer regarding agreements and conditions:
Do you have a Privacy/NDA agreement that I can look at? (Before handing over a formulation.)
Do you have any kind of manufacturing agreement that I can look at and sign off on?
Have you had any prior issues with formula sharing, discounted resales and the like. (Or you can investigate this yourself.)
Make Sure Their Customer Service Is At Least Half Decent
I can't emphasize this enough, don't scrimp on the customer service. On the retail and distribution ends, customer service just comes with the territory. You field customer complaints, you do goods exchanges, arrange promotions, etc. The manufacturer, being removed from direct contact with the consumer, often forgets the importance of this function to a brand's survival. Furthermore, as the tend to work with high volumes of goods, they often ignore the nitty-gritty details that branded or private label companies obsess over.
Therefore, it is important that you find a company that can provide you with the type of responsive and detailed customer service that you will need. What is ideal (but not always possible) is to have direct access to a technical department in case you need assistance with such things as formulations, allergens, product failures, etc. Typical questions you may want to ask you manufacturer are:
1.) Do you provide customer service assistance or at least support for secondary customer service teams.
2.) Does your customer service allow for access to technical staff for detailed and analytical inquiries.
3.) Do you provide analytical paperwork, such as batch testing or microbiological analysis. Can we receive batch sample on request.
Logistics, Logistics, Logistics
Beyond typical lead times and storage/warehousing space, the business of logistics can get pretty messy. As a general rule of thumb, with special technical and cost exceptions, most if not all raw material sourcing should be done by the manufacturer. I say this for two reasons: a) As much as possible, you want to focus on the main parts of your business, not on sourcing for another company. b.) You stand a good chance of causing your own delays, over runs and or shortages if you are not experienced in logistics/purchasing. Again there is some money to be saved by providing some raw materials yourself, but only do so if you are prepared to.
The same logic applies to the shipping of finished goods as well. Unless you are fully prepared to handle it, have the manufacturer ship goods to your specified location. Typical questions you should ask you manufacturer include:
Do you provide drop shipping services for your customers?
Have you done business with firms in my [area, country, region] before?
Assuming I can handle it, which raw materials if provided by me would lower the price?