Costs & Benefits: Contract Manufacturing Dietary Supplements

HomeCosts & Benefits: Contract Manufacturing Dietary Supplements

Costs & Benefits: Contract Manufacturing Dietary Supplements

By Will Cartwright | Supplement Entrepreneurship | 0 Comments | 29 May, 2017

In the past, for just about any kind of company to exist required a massive support network behind it.

Take a small Mom & Pop grocery store running in the early 1900’s for example.

For such a business to operate successfully, they would probably need a vast network of suppliers who the owners knew personally.

They would also probably have to own or have direct access to a family farm where much of their products would be produced.

Unless there was an entire family of business also functioning to support this infrastructure, the whole thing would be likely to fail since a single small town grocery store would be unlikely to do more than pay the bills for a small nuclear family.

However in the case of contract manufacturing dietary supplements, many factors like having a network of support make it easy to succeed. 

Captain of Industry

This term indicates a single person commanding vast networks of resources to

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support one massive enterprise that’s so financially muscular that a small business would hardly be in the same category.

These two divergent examples of a traditional business model developed at a time before outsourcing became a meaningful possibility.

Today, due to information technology, advanced machining techniques and materials; companies can be smaller, have less overhead, and produce better profit margins.

Outsourcing means you do not have to be a master of every aspect of your supplement business or support an in-house department to handle it- you don’t even need the real estate required to accommodate the function you’re outsourcing.

All of this may not be news to you, but it bears saying because many small sports nutrition and vitamin retailers are manufacturing their own brand products when they could be outsourcing this function.

Sure, you may be able to mix, assemble, and package everything in your special boutique supplement line in your garden shed. You may even enjoy it, and that’s great.

But a contract manufacturer could be doing it for you at a rate that will far outweigh the expense.

Outsourcing your vitamin production or supplement production will leave you with more room in your home or office, create less mess, enable you to produce far more than you could alone- and make it possible to spend more of your time on the aspects of your business that you enjoy most.

The Breakdown

There are plenty of positives and negatives to contract manufacturing (dietary supplement manufacturer).

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In most cases, the benefits surpass the drawbacks, so that any supplement business that hopes to grow, and not just serve as a side job is likely to profit from engaging with a contract manufacturer.

That said, many small supplement retailers and producers only want to run small operations, to supplement another income, to be part of a larger whole foods or health community, or for some other reason.

If you fall into this category, contract manufacturing dietary supplements is probably not for you.

The growth that will likely result, and need to be supported and developed actively will transform your small boutique enterprise into something altogether different.

If you’re ambitious, however, and ready to handle much more responsibility running a contract manufacturing organization is for you.

Benefits of Contract Manufacturing Services

  • Cost Savings: dietary supplement manufacturer lets you save on the cost of real estate and equipment that you would need to run your own assembly line. You can forgo the cost to staff, run, clean, and maintain any such apparatus- and simply pay you dietary supplement manufacturer contracting bills to enjoy the benefits.
  • Process Sophistication: When you engage with a qualified dietary supplement manufacturer, you will immediately benefit from the capabilities of a fully professional automated production line. You will skip buying, installing, learning, and mastering all of this sophisticated equipment yourself when you outsource to a professional level dietary supplement manufacturer. And you thought instant gratification was a bad thing. 
  • Quality Guarantee: When you produce for yourself, the only thing stopping you from fudging on quality is your own conscientiousness. If you have a bad day, get tired, lose part of your production line- turning out an inferior batch can be a temptation. A professional dietary supplement manufacturer, however, has a contractual obligation to produce your product at an agreed upon level of quality.
  • Scalability: A dietary supplement manufacturer will have numerous customers for whom they perform manufacturing services. The scalability that your dietary supplement manufacturer enjoys saves you money. That means your business can grow more than it would be able to without your dietary supplement manufacturer. Even better, it means you can grow your business even more once your dietary supplement manufacturer produced product lines begin to render sufficient profits.
  • Focus: By taking the repetitive, expensive, and messy aspects of your business off your hands; contract manufacturers give you time to focus more on marketing, and other more humanistic functions of your business. You will have more time, energy, and money to develop your advertising campaign and to communicate with your customers. This is your opportunity to put a human face on your brand by standing behind it personally- and in the nutritional supplement business, the personality behind your brand is everything!

Risks of Contract Manufacturing Services 

(and remedies) 

  • Control Loss: Not being present during the manufacturing process means if anything goes wrong, you may not know about it for some time 
Remedy: Make relationship maintenance top priority.
  • Relationship Maintenance: You will need to keep in regular contact with your dietary supplement manufacturer, and have a close relationship with them. This can drain your time and energy, but you do not want to be an anonymous client with someone who has so much control over the quality of your products.
Remedy: Consider hiring a dietary supplement manufacturer Relations Representative (dietary supplement manufacturerRR).
  • Quality Management: Using a dietary supplement manufacturer means you will lose some ability to manage the quality of your products. This is what relationship maintenance is for. 
Remedy: Make sure your dietary supplement manufacturerRR is knowledgeable about the production process and will be able to notice discrepancies
  • Outsourcing Risks: The risks of outsourcing, especially to foreign countries are growing. With new tariffs for imports and exports on the horizon, using an overseas dietary supplement manufacturer may be a bad move.
Remedy: Avoid outsourcing overseas in the near future.
  • Responsiveness Drain: If your dietary supplement manufacturer does not look on you as a valued customer, you will see responsiveness drop off.

Remedy: Choose a dietary supplement manufacturer whose scale meets your production needs, and maintain a good relationship with them. 

Bottom Line

Keep in mind that the risks and benefits of contract manufacturing dietary supplement capsules will change as regulations change, as economies shift, and as technology advances.

You will need to keep abreast of these issues. With all this in mind, you have a very good chance of enjoying great success through contract manufacturing your sports or dietary supplement!

Supplement Entrepreneurship

Will Cartwright

Written by Will Cartwright

Will specializes in internet marketing for the nutraceutical industry. Will has years of experience working with both Supplement Brands & Manufacturers, giving him great insider knowledge of operations & marketing methodology that works within this industry. Will is constantly reviewing new product trends and listening to feedback from industry leaders. To get in contact with Will for nutraceutical digital marketing, visit GetKnownPros.com

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