CONTRACT MANUFACTURING - PRIVATE LABEL
You can’t do it all! Let Kingfisher take the strain of manufacturing for you. We can deal with the suppliers, stock the raw materials and even hold the printed packaging to meet agreed “call off” quantities. In short we offer a “turn key” service which takes care of everything, leaving you free to concentrate on your core strengths.
Toll manufacturing process (What is toll manufacturing?)
Toll manufacturing or “tolling” is outsourcing all the production or part of it to another, usually specialist, company. You provide all the raw materials or semi-finished products on a free-issue contract to the toll manufacturer. The toll manufacturer then processes the products or raw materials to your required specification, usually into your own branded retail containers. It is a great way to get started in manufacturing without incurring the daunting up-front capital costs of premises, specialist machinery and labour.
Contract manufacturing process?
Contract manufacturing occurs where one company places the whole manufacturing and procurement activity with a third party to make its products. This enables companies of all sizes to focus on their core competency which is often marketing, leaving the contract manufacturer to deal with the headaches of production planning, maintenance and logistics.
Difference between toll manufacturing and contract manufacturing?
Toll manufacturing is typically where you supply the raw materials and even the packaging on a free-issue basis to a specialist manufacturer to make a product on your behalf. The principle activity is therefore manufacturing-on-demand, hence, “toll manufacturing”. By contrast contract manufacturing is a more comprehensive activity whereby the manufacturer purchases all the raw materials and packaging for you and might even have developed the product. It is sold under your own brand.
Toll manufacturing pricing?
Toll manufacturing can be simply defined as an arrangement, where Kingfisher Building Products, with it’s specialised equipment processes raw materials or unfinished goods for your business.
Toll manufacturing pricing?
The price of toll manufacturing varies according to a range of input costs including but not limited to:
- Complexity of the formulation
- How much processing time and energy is required to make it
- Time to fill the finished product
- Warehousing costs to hold raw materials etc
- Volume to process
Pricing can range from as little as £0.15 per fill upwards.
Contract manufacturing pricing?
Contract manufacturing pricing in most cases is a more involved calculation, including all the cost elements of the product and its production. e.g. Cost of Liquid + cost of container + Carton + Labelling as the full burden of product development, procurement, and making falls on the shoulders of the contract manufacturer, this can appear more costly than “toll manufacturing” but you have to calculate the management time you would otherwise have spent chasing up inventory etc. and of course the cost of capital to buy the raw materials. Often times “contract manufacturers” will secure better volume discounts than their clients can get, simply because they are processing much higher volumes.
What does Private label mean?
Private labelling is essentially the same as contract manufacturing, or at least it is a sub-set. Your private label provider makes products that are sold exclusively by your business under your “private label” or brand name. Private labelling allows you to outsource the production of your goods and to sell high quality products at scale, even if you don’t have the necessary resources in-house. It also allows you to quickly expand your range with related products as your business grows.
What does drop-shipping mean?
Drop-shipping is an order fulfilment method whereby your business doesn’t keep the products it sells in stock. Instead, you purchase inventory as needed, (on demand) from a third party—usually a wholesaler or manufacturer—to fulfil those orders for you. Your drop-shipper then sends the product to your retail customer as part of the service. If you can find a manufacturer that offers this option, you have removed “the wholesaler” margin from the supply chain and cut your costs significantly. The advantage of drop-shipping is that you don’t have to worry about the cost of buying and holding large amounts of stock that might not sell if your product is unsuccessful. Similarly if the product sells well, your drop-shipper will normally have the capacity to scale up to meet demand without service interruption.