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Moving manufacturers - original products are private label, possible?
Hello everyone! My first draft of this was super long, so I’ll try again and just get to the point
I’m looking at moving from my current manufacturer who I private label from, to another who DOESN’T private label and has volume discounts. For various reasons - cost, and lately communication has been poor from their side, a few mistakes and I’m no longer feeling they have my best interests at heart. They started out great though so it is disappointing.I have 6 products. They are great quality and match my brand, which I’ve worked really hard at building. At least 4 of them are selling well.Questions: Is it possible to send the products to a research chemist to reverse engineer so I can get the formulas, then give this formula to another manufacturer (I will then own it)?Or am I better to let the ‘new’ manufacturer also do this (one I’m looking at has a ‘leasing option’ for the formula, which would really help with cost right now)2 of the products are very simple - salicylic acid, alcohol and water. The other is glycolic acid and water. Does this even need to be reverse engineered as I know the pH and percentage?Oh, and in terms of my current manufacturer, is there any legal thing I should be aware of? In other words, is it actually ok to take the products and move to another manufacturer in the hope getting the same (same enough) products, that they originally made? I never signed a contract with them. Can they get angry, annoyed or sue?Well that still wasn’t too brief, but I hope I made it clear enough. Thank you!! -
7 Replies
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Can’t really talk about the manufacturer, even without a contract - you need a lawyer for that one.
For the two “simple” products - you shouldn’t need to reverse engineer much, if at all, unless they are OTC Drugs. If they are, you are probably stuck at your original supplier.The others can be either duplicated or reverse engineered. With duplication, a chemist is trying for the same performance, look, and feel without having to adhere strictly to the ingredient label. Reverse engineering has to use only the ingredient label ingredients, in as close to the original percentages as can be determined. Avomeen does a decent job of this, by the way.The decision of which route to take usually depends on how much you have to spend and on your need for an exact ingredient label match. Letting your new manufacturer do either one will probably be the most cost-effective option.Switching to another manufacturer will mean that you will have to repeat all of your stability and preservative efficacy testing on the new formulas. -
Agree with Bob, just want to add that it really depends on what products you have - some are quite easy to replicate others not. If you can post the INCI here you may get a more precise response. In general I would say it is never good to be stuck with only one supplier if you have a good selling brand.
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Thank you both for your replies - seriously helpful. Bobzchemist I didn’t realize the difference between reverse engineering and duplicating, that’s something worth thinking about. The ‘simple’ products are my best sellers for now, so I may look in to those 2 first and take it slow - funds are limited *sigh.
David - is INCI the ingredient list? Sorry I’m not familiar with that abbreviation…And thank you for validating the supplier issue - I have been feeling uneasy about the original manufacturer lately and as the brand grows definitely want a better match. -
Kiwi, have you tried talking to your current manufacturer and specifically tell them how you are feeling lately? As a manufacturer I know sometimes a customer will leave for no apparent reason only to come back a few months later because their new manufacturer was worse than they thought they would be. Then when you have that discussion over why did you leave in the first place is the first time we find out how they really felt. This may be able to all be taken care of with a simple and open conversation.
Secondly I know you said you brand is growing but what are your current orders like? Are you ordering 200 or 500 of each peel? If so, you can’t always expect your manufacturer to give the same attention as they do to their bigger customers. There is only so much time in a day. Are you calling them too much? I know we strive to give all customers big and small great service. But when things are crazy busy and you have to get back to a million dollar customer or a $20,000 a year customer the choice is simple. HAve a duscussion with your manufacturer. May save you a lot of headaches.
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DavidW - thank you. Your post was really helpful and to be honest that is what I feared. Moving manufacturer only to regret it!
My orders at not large at all which I’m very aware of - 100 of each per month right now.I’m so aware of this I hardly ever call, and even place my orders through their ‘online portal’. The last call I placed I spoke to them about terms (30net) instead of 100% on shipping since I’ve been ordering from them for nearly a year and never missed a payment. Explained this would allow me to place bigger orders too - and they didn’t even consider it.Then, for some reason they started charging me 50% on order again and 50% on shipping, stating it was a mistake on their end regarding the 100% on shipping for the past few months!Another reason I’m looking at moving is cost, even with larger orders my current manufacturer is much more expensive, still like purchasing wholesale. If I can get the products made at another manufacturer for less, then I can order more and grow faster. For example, one peel costs me $14 per unit.I understand I’m a very small customer for now, but the big ones have to start somewhere right?To be honest I feel like because I am so small, that I am being a big pain even letting them know how I feel - especially now. But you’re right, I am best to be 100% sure I want to leave (or stay)…. suppose it’s like any relationship, you gotta let people know how you feel!Thank you - I sincerely appreciate it. -
I think that every company starting out with a Private Label manufacturing company has to face this problem as their orders start to increase. With Private Label, since you are essentially buying an uncustomized finished product, the manufacturer has taken care of all the details for you. Typically, they even design and have the labels printed on your behalf. That certainly has an upside - you are avoiding all of the headaches of manufacturing - but there’s also a downside, in that you have no control and very little leverage in the manufacturer/customer relationship.
I would suggest that, if you decide that switching is in your future, you do a few things. First, don’t move all of your products at once. Consider starting with the two ‘simple” products to begin with.Determine what’s involved in moving to a Contract Manufacturer. Do you have any responsibility to do any of the needed testing yourself, or will they do it for you? Do you own the formula or do they? Will they source packaging/labeling for you or do you have to do that yourself? And so on…Also consider if you might be better off switching to a different private label manufacturer, rather than jumping into the deep end with contract manufacturing. Maybe there’s another outfit that will work with your finances they way you’d like them to?Lastly, don’t be too concerned about getting exact duplicates of what you’re selling. “New and Improved” has a very powerful allure for many customers… -
Bobzchemist - wow, thank you. I believe you have clarified my next moves so I really can’t thank you enough!
Definitely the best idea to start with the 2 simples - they are selling out the other products about 5 to 1 so it makes total sense! And I was getting a little too serious about exact duplicates, love the ‘new and improved’. I worked in skin care for years (in spas etc) and sometimes forget those things when I get too involved in the business-y side…I’ve started looking at both other private labels and contract, will begin communicating with a few and decide on the best options.Really, I came to this forum for help but am still blown away by it. Thank you again for taking the time to share your experience and support, you are awesome!
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