What is the third party manufacturing service?
If you are a company or distributor of a product from another brand, it is possible that at some point you have thought about launching the same product on the market under your own brand. That is what the third-party manufacturing service that some factories provide to increase sales of the products they manufacture is all about.
There are several types of third party manufacturing. Below we will see what types of third party manufacturing services are generally provided by factories. It should be noted that not all manufacturers are willing to provide all these services.
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Many companies that distributed products of other brands have been successful in developing their own brand with a product with the same characteristics.
Some have even expanded their catalog after the success of the initial product. Nowadays having a factory of a product is no longer as profitable as before. Many local companies have been displaced by Chinese industry and its low manufacturing costs.
Gerardo Vila – CEO Hispasiam
Types of third party manufacturing
Perhaps the most important point when choosing a manufacturer that offers the manufacturing service to third parties is confidentiality and the non-competition agreement. Finding a manufacturer that can manufacture the product that we want to market is important, but it is also important that if the product is successful, the manufacturer does not compete with us or reveal data about it.
This can especially be the case in the last of the types of third-party manufacturing that we are going to mention below. It is perhaps the most difficult for manufacturers to accept, but it is also the most commercially risky.
Third party manufacturing with brand stamping
Perhaps this is the most conventional type of service and the easiest for manufacturers to accept. It is about stamping your brand or branding on a product that the manufacturer currently manufactures. No aspect of the product is modified, only the brand is stamped.
Third party manufacturing with modifications
In this case, the manufacturer will be willing to make modifications to a product that it currently manufactures. As an example, we could mention changing the color of glasses, or the lenses or even part of their shape to adapt it to the design that the client wants to manufacture. Modifications are generally minimal.
Third party manufacturing with product development
As we mentioned before, perhaps this is the riskiest type of third-party manufacturing service for both the manufacturer and the customer. Manufacturers generally require a very high order to develop a product from formula to final finish. In addition, if the product is successful, it is commercially risky, since the manufacturer can reveal the manufacturing process or even manufacture it himself under another brand. For the manufacturer it is also risky because it makes its entire factory available to the customer without guarantees that they will buy again. In these cases it is important to sign a commitment contract for both parties.
Third party manufacturing of natural cosmetics
If there is a will, a manufacturer can offer the manufacturing service to third parties for any product, but perhaps one of the most demanded products is the third-party manufacturing of cosmetic laboratories, especially the third-party manufacturing of natural cosmetics.
At Hispasiam, we have contact with several Asian and Spanish cosmetic laboratories that offer the third party manufacturing of natural cosmetics.
Third party manufacturing of de food supplements
Food supplements have become a very popular product over the years. It is a product that has a very high profit margin, since the cost of production is quite low and that of sale to the public quite high depending on which cases.
Food supplements have become very popular, not only in Europe or America but also in Asia.
If you are a distributor of nutritional supplements and want to develop your brand with your own product, contact us and we will study your case. We have several manufacturers that are willing to offer third-party manufacturing service for food supplements both in Asia and in Spain.