OEM is an acronym that stands for “Original Equipment Manufacturer”, which is basically a company that produces products for other companies to market.
It is a very common solution chosen by skin care or hair care brands, in fact most of the products we see in the cosmetic industry are produced by OEM/ODM companies upon request. It makes a lot of sense, since not everyone can run a big expensive factory. This way you can have a cost effective investment.
If you wish to enter the cosmetic industry with large production lots, without having to invest millions of dollars and making your own factory, that’s the smartest move you can do!
With OEM you can develop formulas and packaging from scratch.
This kind of solution offers you more flexibility when creating new beauty products. You partner with the cosmetic manufacturer to design your own formulas, shade ranges, and packaging. This means you still have room for more differentiation in the marketplace as you get to develop a wide range of cosmetic products that are entirely unique and communicate the values of your brand.
If you feel confident enough to put your efforts into each step of the production process, that’s the right path for you!
With Private label you can pick some “ready made” products, customize and give them your name.
With Private label you have less room for customization than in OEM or contract manufacturing, but startup costs are much lower, as you do not need to invest in research and development. In fact we, a private label cosmetic company, have already developed and tested all products. With so many formulas in our library, you can pick and choose to curate the perfect collection for your beauty brand.
You can enjoy high profit margins by buying your products at wholesale prices and charging a premium to your customers for the brand you have created. Be aware that choosing this solution doesn’t mean that you’ll get cheap products, not at all! You can have high quality products (or even luxury beauty products) even if you rely on a manufacturing company partner for the creation of your haircare or skincare products.
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