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Formulation house guidelines?
Hi All!
Custom formulation question - How do formulation houses guarantee a service of unique design? How can I ensure that the work is protected from intentional/unintentional mimics from the same house? I understand this is more a case of needing to partner with credible houses/labs but i’m curious, are industry guidelines available on the subject? E.g., Formulations are required to be __% different from previous designs and must be __% different from future design?
Thanks in advance!
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5 Replies
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You really are missing what sets apart a line. It is much less the Formulation and more importantly the marketing.
I do Custom Formulations and honestly, the need to replicate or repeat Formulas is limited. The first step is the Product Design where the Marketing is reconciled with the raw materials and the Chemistry. As the process continues, you do get a unique product that will generally be unique to your Marketing direction.
Remember, any product can be essentially copied through utilizing the Ingredient declaration (required by law), familiarity with the raw materials and some lab time.
However, pragmatically getting the stable and effective formulation is about 20% of your effort. What will set you apart is your Sales and Marketing. The greatest product with flawed or ineffective marketing will get outperformed by the most pedestrian product with a great Sales/Marketing strategy.
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@Microformulation - Thank you for the response.
I understand reverse engineering is a relatively easy task for those skilled in the art and that marketing is king when it comes to garnering sales and market share. That aside, I’m simply looking to identify ways to safeguard my investment.
This particular house does extensive custom development work and manufactures a house PL-line. Given this, there may be a conflict of interest present and I’m looking for a mutually binding and commonly accepted framework to protect myself. By no means do I want to tie their hands but a competitor’s ability to market a mimic of my formulation would be diminished, if the house was prohibited from reproducing a similar design.
This request may seem to be bordering on paranoia but I’m not familiar with contract normalities for this type of work. I want to ensure that I can intelligently present a framework which suites to protect both parties when I come to the table. Perhaps I need to seek legal council for this?
Thanks again!
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You can sign an NDA and this may give you some peace of mind. Also, use a Manufacturer who you feel you can trust. Other than that, I can’t think of anything elese.
Remember, the vulnerability of your products being knocked-off is not altogether a bad thing. It can be the impetus you need to continue innovating. Your best defense is strong marketing.
It is funny, but one of my first clients I worked with when going into Private Consulting faced the same issue. They made a shampoo/conditioner combination for a very targeted market. After selling the product for several years, they noticed a competetor “pop-up” on the market. When they looked, the product was similar and funny enough was made by their contract manufacturer. This was the motivation to reformulate. As you watch the Cosmetic Materials market, you will see that raw materials with “Cosmetic Claims” are constantly evolving. Their root product was 4-5 years old, they reformulated, launched a “new and improved” product utilizing some newer raw materials, promoted it to their existing fostered clientelle and actually increased sales. They turned it into a positive.
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Also remember, even with a contract/NDA, your only real recourse will be to sue the contract manufacturer - which will totally destroy any relationship, and guarantee you’ll never be allowed to be their customer again.
Your best bet is to protect yourself with unique branding/packaging/trade dress and really good marketing.
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Thanks for everyone’s thoughts and feedback. I appreciate it!
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