Despite the differences, many people believe that Private Label and Contract Manufacturing are the same. Both forms of manufacturing are prevalent in numerous industries. Each has its own benefits. When looking to outsource, organizations must decide which solution works better for their situation and business.
Private Label Manufacturing
A Private Label Manufacturer provides organizations with products marketed under the brand name or label of the company that partners with them. With this type of manufacturing, the manufacturer retains control over the product, including its specifications and quality.
Private Label Manufacturers often sell low-cost alternatives to popular products branded as the company that hires them. This makes it possible for big box stores to offer their own brand beside other well-known brands.
Contract Manufacturing
Contract Manufacturing involves outsourcing the manufacturing process to another company. Contract Manufacturers do not own the product and cannot change the specifications without prior approval from the company that hires them.
Benefits of Private Label
Private Label allows stores to offer their own brand at a lower price point than other, more popular brands. This can improve sales and increase consumer respect for store brands. With Private Label, organizations do not need to worry about developing design plans or tweaking formulas.
Benefits of Contract Manufacturing
Utilizing the help of a Contract Manufacturer allows organizations to produce high quality products that meet their exact specifications and requirements. Using a Contract Manufacturer costs less than producing products in-house. It also puts organizations in reach of experienced professionals. CMs often provide advice and guidance, allowing OEMs to improve product quality and reduce time to market.
Final Thoughts
Both Private Label and Contract Manufacturing allow organizations to bring quality products to market. While Private Label does not allow the purchaser to modify or change the product, Contract Manufacturing enables companies to produce products to their own specifications. Having control over the production process allows organizations to adjust to meet the needs of consumers.
The type of manufacturing an organization chooses will depend on numerous factors. Organizations should fully evaluate their needs before making a decision.
Means Engineering offers a variety of contract manufacturing services to organizations and OEMs across a wide range of industries. Please contact us for information about our services.
