What is the Difference Between Contract and Private Label Manufacturing for Skincare Products?

There has been much confusion between private label skincare manufacturers and contract manufacturers. Both terms are often used interchangeably, but there are differences between these services. It is essential to understand what both of these approaches can provide in order to make an informed decision regarding the creation of your skincare product. Anthem United States of Beauty has created the following article to provide you with some insight and a comparison between private label and contract manufacturing services.

Private Label Vs. Contract Skincare Product Manufacturing

If you are looking to produce a skincare product, it may be challenging to figure out how you can make it work. Private label manufacturers and contract manufacturers are two alternatives to go about creating a new skincare product to impact your target market. However, the question remains: How do these approaches to skincare manufacturing work? Which one is better for me?

The bottom line is both services will offer the same result: a skincare product that suits your needs. However, there are noticeable differences when it comes to how both types of services work. We discuss each of these services in detail below.

Private Labeling

Private labeling is a streamlined, plug-and-play approach to the manufacturing process of a skincare product. It is an excellent way for companies looking to dive into a product’s manufacturing process without a lot of the hassle. Typically, smaller companies prefer this type of method because it allows them to focus on their business while another company creates their product. Large companies can also take advantage of this method since it poses little to no interruption to their day-to-day operations, allowing them to focus on adding products to their current roster.

The unique off-the-shelf approach that distinguishes private labeling has many advantages. For instance, when you hire a private labeling company, you get access to what is known as a “turn-key” process. In other words, your private label manufacturer will take care of your product’s formulation, manufacturing, and packaging, among other services.

Additionally, the time to launch your product onto the market is significantly reduced because once your product is ready, shipping can be done faster. Moreover, you don’t have to worry about the whole process; the private label’s expertise should take care of everything. Typically, your upfront investment may not necessarily be as high as it could be if you had to take over production yourself.

Contract Manufacturing

Contract labeling works entirely differently than a private labeling service. When you take this approach to manufacturing your skin care product, you have to figure out everything related to it. For instance, unlike a private label manufacturer – who takes care of everything – you have to create your own formulation, come up with your product’s packaging, source every ingredient required to create your product, establish shipping and shelving strategies, and everything else required to launch your product.

It may work for you if your formula is so unique that you have to create it yourself. However, there is a caveat. If you assume control over your project, it means that the manufacturer will likely ask for a larger minimum quantity to produce. In other words, your initial, upfront investment will likely be larger. This may not be ideal for smaller companies working their way into the beauty industry, and going through a private label company may be a better idea.

What Are the Advantages of Private Label Manufacturing?

As we mentioned, the best – and probably the most noticeable – advantage of hiring a private label manufacturer is its turn-key, off-the-shelf approach to creating your product. Private label companies understand that you have other responsibilities related to your business, and they can help you take care of the creation of your new product. Nevertheless, there are additional advantages to consider when choosing a private label company.

Customer Loyalty

Customer loyalty is essential to establish yourself as a reputable company. Moreover, a loyal customer base will trust your judgment when creating new and exciting products. When you hire a private label company to take care of your product, you can create products your customers can get attached to, subsequently supporting any new products you may develop in the future. If you are looking to establish an outstanding, loyal customer base, going the private label route may be ideal for you.

Exclusivity

Standing out from the crowd is critical, especially if you are looking to break through the already-competitive beauty product arena. As a skincare product company or an established company expanding their product line, it is essential to provide your base customers – and any new-coming customer – with a product that looks and feels different. This is something you can achieve through private label manufacturing. From your product’s formulation to its design, you have the opportunity to stand out from the rest.

Higher Margins

Generally, companies that choose private label manufacturing can have larger profit margins than those that choose contract manufacturing. The reason behind this is that, most of the time, the upfront cost and your initial investment are generally low. Thus, you may have better control of your profit, which can help cover any initial expense, while helping you grow your business.

These are not all of the benefits of choosing a private label manufacturing company to create your skincare line. However, it gives you an idea of the advantages of this approach.

Private Label Manufacturer Creating Skin Care Products in the United States

Anthem United States of Beauty is a B2B company providing private label manufacturing services to U.S. companies. We can provide all of our clients with an extensive catalog of services and products to help them create their desired skincare products. Our turn-key approach allows for a streamlined, effective creation of your product. We can help you with everything you may need to launch your product onto the market, from its formulation to its packaging. To learn more about our services, call the skin care manufacturers at Anthem today at (973) 779-1982.