OEM stands for Original Equipment Manufacturer that describes the relationship between hardware vendors, component makers, and channel partners such as resellers and distributors.
Most startups in Malaysia sees a relationship with an OEM company as a way to grow their business and expand their markets. There are pros and cons of outsourcing to an OEM company, just like in any other business relationships.
Here is our guide on the Pros and Cons of skincare OEM and what you should consider before making a deal.
Pros:
Cons:
Despite having more advantages than disadvantages, you should always weigh out both options to make sure that you have done the most research before you make a deal with an OEM skincare manufacturer.
1. Lower Price
Most, if not many, private labelled products can be sold at a lower price when the company had just started selling their products whether at a shop or online.
This could be a problem in your business’s initial state as you will spend more money on private labelling, which can leave to a lower profit margin.
2. Hard To Find an OEM Skincare Manufacturer
Most OEM skincare manufacturers deal with companies that have a high demand and it can be hard for you to continue your relationship if your company is not selling enough products.
The most important factor to make sure this does not happen to you halfway is to talk to the OEM skincare manufacturers on their flexibility and ability to produce the products.
3. Intellectual Property Rights
As you register all your designs, ingredients, and components to prevent intellectual property theft from competitors, it could take a lot more time to go through this process and you might not know where to start.
Talk to your OEM skincare manufacturer to discuss these issues.
4. Additional Costs
The process of creating a logo and packaging for your private label products can incur some additional costs.
As you begin to establish a business relationship with your OEM skincare manufacturer, both parties need to understand the company and the market that you are targetting for your skincare products.
Create a Partner Requirement document so that you can tell the manufacturer what your company wants, your competitors, ideas, products, and how it is different from those available in the market.
These might seem minor but they are important for your business relationship with your OEM skincare manufacturer. Good two-way communication from the beginning can increase your chances for success.
Final Thoughts
Finding a good OEM skincare manufacturer can be challenging, so is finding another company to help you boost your company’s sale and increase the chance of succeeding.
Once you have found the right OEM skincare manufacturer, the possibilities are endless. Research on the available OEM skincare manufacturers in the country to find the best one that can help you sell and market your products.
With Biocoslab Manufacturing, we are more than happy to assist you in producing your products, designing, and help take the burden off your shoulders for manufacturing needs.
Reach out to us today and our expert customer service personnel will assist you.