Contract Manufacturing For Outsourcing Cosmetics & Beauty Products
What is contract manufacturing?
Contract manufacturing is a form of outsourcing (outside resourcing). As the name of the term “contract manufacturing” implies, a contract manufacturing company creates an agreement (contract) with another business (company A) to complete a planned or existing task. Thus, company A hires the manufacturing company to complete activities that they can’t do in-house or don’t wish to achieve internally. Utilizing the services of a contract manufacturing company can supply a host of benefits, especially to startups or small companies. Nearly all pharmaceuticals have some level of outsourced manufacturing (contract manufacturing) or testing (contract testing) to get a new drug approved by the Food & Drug Administration for patient use. Examples and benefits of contract manufacturing cosmetic products, contract manufacturing beauty products, and contract manufacturing cosmetic wipes are detailed below.
What are examples of well-known brands that outsource their cosmetic and beauty product manufacturing?
- Maybelline
- Johnson & Johnson
- Estée Lauder
- L’Oréal
What are the benefits of contract manufacturing?
There are a few different reasons to use an outside company to support product development and manufacturing:
#1: Cost savings
Companies save money instantly because they do not have to pay startup costs for a facility, equipment, and technicians needed for product production. Additionally, companies save money on employee hiring, wages/benefits, and training. If hiring a contract manufacturer overseas (such as India), additional cost benefits can be found due to the lower labor cost. As contract manufacturers serve multiple customers and buy in bulk, they can often offer reduced raw material costs. While all of these benefits are obvious for startups and small companies with limited startup capital and resources, large corporations benefit from using contract manufacturing for cosmetic wipes through outsourcing the production of products outside of their core competencies.
#2: Advanced technical skills at your fingertips
Businesses can use the contract manufacturer’s engineers, scientists, regulatory experts, and technicians with years of experience to their advantage. These experts’ skills are necessary for cosmetic production and provide efficient formulation creation, prototypes, and product filling methods. Thus, contract manufacturing beauty products and cosmetic products provides skill advantages, especially when creating products (like beauty products) for a new foreign market.
#3: Instant access to GMP quality facilities & processes
Facilities that are certified for Good Manufacturing Practices (GMP) require ongoing environmental monitoring to maintain certain levels of sterility and excellence. Instant access to GMP quality facilities circumvents the headache of startup facility costs and lengthy certification processes.
#4: Allows outsourcing business to focus on branding depth
With outsourcing manufacturing and other business components that aren’t a company’s expertise, businesses can focus on their core competencies and building their corporate brand. Thus, new companies can focus on depth over breadth.
#5: Gives outsourcing business access to niche internal product knowledge
Many cosmetic brands are founded by celebrities and entrepreneurs who do not have chemistry, biology, or manufacturing backgrounds. Celebrities and entrepreneurs have a product vision but don’t have the expertise to successfully create and market the concept alone. Working with a knowledgeable manufacturer fills that gap. Even for large corporations, contract manufacturing can offer benefits if the niche a corporation is looking to fill can be covered cost-effectively.
#6: Time savings
With a outsourcing cosmetic products, businesses do not need to hire staff, train technicians, or acquire resources for manufacturing. Instead, contract manufacturing activities can run in parallel with other areas of your product development, testing, and scale-up. Further, contract manufacturing cosmetic wipes allows time savings with costs associated with new FDA regulations, as contractors keep you abreast of current regulations that impact product already on the market and future products.
What should you do when engaging with a new contract manufacturer for Outsourcing cosmetic Products?
First of all, make sure that you create and sign a legally binding agreement with your contract manufacturer that outlines service expectations, timelines, pricing, and confidentiality. Service contracts for outsourcing cosmetic products are known as master service agreements (MSAs). Items such as which state will perform litigation and payment terms can be overlooked by novice negotiators and cause a significant headache later on. It can be beneficial to seek legal counsel to create a preferred MSA agreement for your corporation before contracting services from a manufacturer. In addition, ensure that your MSA provides protections for your intellectual property and trade secrets. It is not uncommon to sign confidentiality agreements (CDAs) before disclosing information about your product and manufacturing needs. Make sure to file any critical intellectual property before beginning product manufacture. Also of importance is detailing the financial liability for defective products.
If you need both Good Manufacturing Practice (GMP) and non-GMP services, check to ensure that your contract manufacturer has these facilities available during the timeframes you need for your internal deadlines. Products that will require aseptic manufacturing processes need specialized, certified clean room facilities that go beyond mere GMP requirements. Moreover, agree with the manufacturer on where you will be sourcing your ingredients and the quality of sourced ingredients. Raw material sourcing requirements are essential for cosmetic products branded as organic, gluten-free, vegan, etc. Sourcing requirements (including location) for raw materials should be detailed within the MSA and agreed upon before work begins.
For cosmetic products that require formulation development, ensure that your manufacturer knows which ingredients you want them to use and which ingredients to exclude. Ingredients include active ingredients as well as excipients, preservatives, etc. The cosmetic formulation’s texture, color, thickness, and fragrance should also be agreed upon ahead of time, and samples of benchmark formulations stored for later reference. Other items to consider regarding cosmetic formulations include product batch size and batch delivery times. Most cosmetic products require testing, such as cosmetic stability testing, to prove product safety. Ensure that you coordinate timelines with your contract manufacturer or any contract testing companies you use to perform product safety tests. Contract manufacturers that handle cosmetics should be able to support you with determining which safety test you need to overcome regulatory hurdles. You may also need to seek contract manufacturing support from more than one organization to cover your cosmetic formulation and packaging (filling and stability testing) needs.
Summary
Overall, contract manufacturing is a form of outsourcing where a third-party manufacturing company is hired to complete activities that cannot be accomplished internally. Utilizing the services of a contract manufacturing company can supply a host of benefits, especially to startups or small companies. These benefits include cost savings, time savings, access to advanced technical skills outside a company’s expertise, and other benefits like manufacturing GMP quality products. Contract manufacturing cosmetic wipes and cosmetic wipes testing is particularly advantageous for businesses due to changes in FDA regulations that impact these products. When looking to engage with a contract manufacturing organization for cosmetics production, ensure that the signed master services agreement covers all of your intellectual property, quality, timeframe, formulation development, and packaging needs.
MycoScience is a contract manufacturing organization specializing in sterile syringe and vial filling. MycoScience also offers Preservative Efficacy Testing, Sterilization Validations, Bioburden Testing, Cleaning Validations, Microbial Aerosol Challenge Testing, Accelerated Aging, Microbiology Testing, Cytotoxicity Testing, Bacterial Endotoxin Testing, EO Residual Testing, Package Integrity Testing & Environmental Monitoring services medical devices and allied industries. MycoScience is an ISO 13485 certified facility.
References
Alex Blackstone. Manufacturing Cosmetics- Internal or Outsourced. BlackstoneBeauty Blog. 2019.
Contract Manufacturer. Wikipedia. 2021.
Lorraine Dallmeier. 11-Point Checklist To Outsource Skincare Manufacturing. Formula Botanica.
Michael J. Akers. Sterile Drug Products Formulation, Packaging, Manufacture, and Quality. Drugs and the Pharmaceutical Sciences. Informa Healthcare. 2010.
