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.



Cost-Effective Products

Your business will benefit from the costs as the supplier creates a bulk amount of goods for them to sell. This helps you to lead to a higher profit margin, especially if your private label product will be competing with products that have a strong brand name and image.

This way, your products will be able to sell better than those which cost more.


High-Quality Products

You will often receive high-quality products as the skincare manufacturers will test it according to their strict testing standards.


As most OEM companies have better R&D team with better technologies to creating better skincare products, you will benefit a lot from this, especially if you are just starting up.

With the company's expertise and technology, you can save a lot of time and money from testing, research, and development.


Intellectual Property

When you use an OEM company to produce your skincare products, you keep all the trademarks and intellectual property rights associated with your design and products.

Be sure to register your private label before you start selling.


Professional Service

OEM companies usually provide efficient and professional service, as B2B companies can be harder to please with the products, quality, and service.

To maintain a good relationship between the OEM company and its client, the company must offer good service, high-quality products, and great support from the start to the end.



As a creator, you get to control the prices and the production of the products. Over time, as you get more customers and requests for your products, you can change and modify depending on the needs and requirements of buyers.

Brand Name

Because you are creating a private label product, your chosen brand name can become valuable over time and bring you good profit as you continue your business.


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.


Author admin

More posts by admin

Leave a Reply