Signs You Need To Change Contract Manufacturing Agreements

Signs You Need To Change Contract Manufacturing Agreements
  • Opening Intro -

    When you need to produce products but don’t have the resources of a full-scale manufacturing facility, contract manufacturing is the perfect option.

    These third-party companies take production into their own hands, allowing you to focus on growing your company.

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However, not all these businesses are the right fit for you. In fact, you may already have some frustrations with your current agreement. These are some signs you need to change contract manufacturing agreements and what you could gain from making the switch.

You Can’t Accommodate the Costs

One of the first things to be on the lookout for is the price tag on your contract manufacturing agreement. Though the cost of your project can vary depending on a series of factors, what’s important is that you can afford it.

Many contract manufacturing companies work hard to deliver the best possible prices for their services. However, as the industry changes, regulations update, and parts become scarce, you may find yourself paying more than intended.

So, if the price ever gets too high for your business, consider making a switch.

You Have the Wrong Contract Type

You may also want to seek out another manufacturing partner if your current one doesn’t offer the right type of contract manufacturing for your needs.

There are three general types of contract manufacturing agreements, and each has its own distinct offerings. Some offer end-to-end solutions that produce the entire product, while others only deal with part of the process.

Should you acquire resources of your own, you may not need end-to-end production anymore. Therefore, you should reevaluate your contract.

You Can’t Control Product Quality

It’s also a problem if you can’t control the quality of the products you’re paying to manufacture. After all, your brand is the one on the packaging, and you should always have a say in how it’s produced and what state it should be in before shipping.

Even end-to-end manufacturing leaves creative licensing and ensures that clients always have final clearance on everything to do with their product. So, if you aren’t getting the quality items you’ve been promised, it’s time to move on to a company that can better provide them.

You Have No Room for Growth

The most important sign you need to change contract manufacturing agreements is restrictions on company growth. As your business grows and demand for your products increase, it’s vital that your contract manufacturer can scale up production to accommodate.

Otherwise, you’re restricted in how you expand your own company. For this reason, if your current partner has order restrictions that don’t meet your growth goals, consider searching for someone else.

Even if your current agreement was great a great fit for your startup, you may find that it’s time for a change. By being able to identify when it’s time to move on, you can best distribute resources and grow your company to suit your vision.

So, watch out for these indicators as well as any others that may occur throughout your current partnership.

 

notes

Image Credit: the interior metal manufacturing the view from the top By Александр Ивасенко FILE #: 322597243

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