WHY A FRACTIONAL PRODUCT DEVELOPER RECOMMENDS FRACTIONAL CONTRACT MANUFACTURERS
04.30.24 | Tamar Lara Kamen
Why?
Prepare for the worst case scenario.
As a beauty industry product development specialist for over 20 years, I stand by the saying “don’t put your eggs in one basket” when it comes to working with labs and contract manufacturers. Even as a small emerging brand with a few products, I encourage everyone to diversify who they work with. It seems logical to consolidate manufacturing, but I recommend working with several vendors at once.
Why?
Prepare for the worst case scenario.
Natural disasters and epidemics have recently shown us to expect the unexpected. Even if you have a trusted partner, you can’t guarantee that something won’t happen that halts their manufacturing capabilities. If you have multiple strong partnerships, another vendor will be able to take on last minute projects without the long onboarding process.
Not every partner can be the perfect partner every time.
Each contract manufacturer has its unique capabilities and advantages. Many vendors quote product costs depending on their kettle sizes, filling machinery and operations setup. Most vendors don’t want to admit that they can’t do everything well. But they can’t, or at least they can do some things best. Just like a brand should work with fractional expert executives, they should treat their manufacturing “talent” with the same perspective.
Price matters.
Get multiple quotes for every project. Manufacturers all buy ingredients in bulk, allowing for bulk pricing for those multiple customers share. One lab can be formulating several vitamin c products at once, or sunscreens or products with a certain peptide. Purchasing the minimum supply of that material to add to a new product can be cost-prohibitive for some brands whereas buying into a cooperative of sorts can make that same material affordable. Bulk costing can reduce the price of an ingredient by up to 25%/kg.
Shift happens.
Vendors get acquired, merge or change capabilities. That means that what they offer can shift. Minimum order quantities (MOQs) or annual business thresholds can increase, or a conglomerate can decide to narrow their scope to certain categories. Your agility to shift your business elsewhere can save or sink your entire existence.
When you work with a fractional executive as you do with THE BOARD, you are hiring a dream team of expert talent. Consider your manufacturing partners the same way.
#communityovercompetition #futureofwork #productdevelopment #wearetheboard #contractmanufacturing
