DENVER, CO / ACCESSWIRE / May 9, 2022 / Picking the right CBD manufacturer for a brand - A contract manufacturer can be the saving grace your company needs or (if you pick the wrong manufacturer) can be the bain of your existence. Many companies want to sell CBD products and have their own brand but don't have the ability to make the products themselves. This is why contract manufacturers are indispensable to so many CBD companies right now and why more and more brands are turning to contract manufacturers to supplement their business. Contract manufacturers can oftentimes make your products specifically to your specs and have it delivered directly to your place of business for cheaper, faster, and much more conveniently than if you were to make it yourself PLUS your customers will never even know you didn't make it yourself!
While it is true that some manufacturers will have MOQs (minimum order quantities) and are not well suited to work with small companies or mom and pop startups there are others like a Colorado based company called Discover CBD who work with brands of all sizes to include huge nationally recognized companies to small single person startups and everyone in between. Knowing what to look for in a contract manufacturer is key to a good experience and can mean the difference between unlimited growth or never getting off the ground.
What to look for in a CBD or Supplement Manufacturer
As a business owner when looking for a manufacturer you're going to see a lot of companies vying for your business with fancy ads, and other sales tactics but what you really need to look for is companies that excel in Experience, Capability, Expandability, Certifications, Communication, and Connections. You will really want all 6 of these in any manufacturer you use, without them you are likely to be disappointed in the end result and the experience as a whole.
CBD oil Manufacturing Experience
While it seems like a no-brainer that any manufacturer that you pick will need experience, not all contract manufacturers do have the experience needed to get the job done. After all, you wouldn't want a manufacturer making your product with zero experience, just like you wouldn't want your CPA working on your car. Experience means the manufacturer knows how to formulate, what details need to be on labels, how to make products with the least amount of waste, how long a production run will take, what are the potential pitfalls of a product and so much more, all of which can drastically affect the overall viability of your business, the cost you pay, the quality of your product and how long it takes for you to receive your product. Hiring an inexperienced manufacturer is taking a huge risk with your business and your money and in the end, if the experience is lacking, you're likely to end up disappointed in the finished product (if you even get that far).
CBD oil Manufacturing Capability
This may seem like something that doesn't need to be said but you would be amazed at how many people hire manufacturing companies to make things like gummies when they have never made gummies before. Manufacturing equipment can be very expensive and not all manufacturers have all the machines needed to make every product fast and efficiently. The average manufacturing facility has spent in excess of $1m in equipment and it is this equipment that allows manufacturing companies to do things faster and more consistently than individuals can on their own. Don't partner with a contract manufacturer which has no experience or ability to make what you need to make. While it's not uncommon for manufacturing companies to have partners in the space to handle certain types of products they don't like to make or lack the equipment or space to make, you will want to make sure the manufacturer you choose has the machinery and the ability to make the items you want or at a minimum have the relationship with other companies that have the experience and ability to get the job done. Well equipped manufacturing companies will also have dedicated personnel for quality control, graphic design, customer support, and more, all of which really comes in handy when you are starting off in the early days of your company.
CBD Production Expandability
Expandability is important for any growing business, especially in the rapidly expanding industry of supplements and nutraceuticals. The last thing any business owner wants to experience is massive positive growth only to realize they have no ability to expand the production of their products. Working with a large manufacturer should mean this is never an issue that arises. Working with a small manufacturer may mean you get excellent communication but you have no ability to expand your brand in the future without finding another manufacturer. Good large manufacturing companies will also have great communication and they will be able to steer any communication in the right direction so as not to waste anyone's time as we all know in business, time is money. Don't waste your money on a company that can't expand your production.
CBD Manufacturer Facility Certifications
The certifications of a manufacturer are super important because it lets you know what kind of criteria they meet for consistency, quality, cleanliness, etc, and give CBD brands the ability to say their products are made in a cGMP facility which is critical to getting a company's products on the shelves of major retailers. Right now certifications can really set a company's products apart from the masses, and with so many CBD companies out there, the importance of setting yourself apart can't be overstated.
CBD Manufacturer Communication
While certifications and the ability of any company are important, so is communication. Many CBD manufacturing companies out there leave much to be desired in the area of communication. Communication is key to a good business relationship of any type but when it comes to a company that will be making your products it is even more important. You will need to be in close contact with your manufacturing partner to make sure products are completed on time and to iron out any details such as packaging size, color, shape or label placement, coding needs, and even minor details such as what tamper evident seals to use and size of desiccant packs for instance.
CBD Manufacturer Connections
Lastly, it's very helpful for the manufacturer you partner with to have connections within the industry. The right manufacturer will have partnerships with label manufacturers, packaging partners, and shipping partners as well as other ancillary services to even include marketing and website design or payment processing. Oftentimes manufacturers can get packaging, labeling, and shipping is done for much cheaper than the average company can on their own because they work in large quantities and utilize their leverage of high volume purchases to negotiate significant savings on their and their clients' behalf. Because the relationships between suppliers and manufacturers are often very close, they can also get these products faster than the average business owner or consumer can. All of these connections and discounts can really add up to huge savings in the long run and oftentimes manufacturers can get your products made specifically for you to your specs and have it delivered directly to your place of business for cheaper, faster, and much more conveniently than if you were to make it yourself.
Why is contract manufacturing CBD so popular right now?
While mom and pop and small brands that make their own products do still exist, many brands are quickly making the shift to have large contract manufacturers make their products. The reasons to use a contract manufacturer are pretty vast and manufacturers have shifted over the years to allow even small brands and startups to work with large producers with low MOQ's and more affordable options. The main reason we see CBD brands turning to manufacturing companies is regulation has made it quite difficult to make items out of your home and sell them out in the open market without breaking compliance rules and regulations regarding public health and safety for ingestible items. While it is possible (at least in the state of Colorado) to get a kitchen at your home certified by the state health department it has to be separate and independent from your residential kitchen and meet all the same requirements you have for a regular commercial kitchen which can be difficult or near impossible for most small businesses. While compliance is a big reason for brands to use contract manufacturers, there are actually many other benefits that come from using a contract manufacturer such as:
- Expertise in formulating
- Built in certificates and badges your products can benefit from using
- Low bar of entry (While this isn't universal with all contract manufacturers, there are some out there specifically willing to work with small or start up brands)
- Starting on day one with a wide product catalog
- Speed of production and ability to scale quickly
- Connections within other sectors and industries often times with discounts on things such as labels and packaging materials unavailable to the general public
The truth is much of the time contract manufacturers can make a brand's products for them cheaper than small, medium or even some large brands can on their own due to the large purchasing power and relationships with suppliers manufacturers have. Some other basic benefits include faster turnaround times, cleaner more consistent products, and maybe even fulfillment and storage or your company's CBD or nutritional products. While it may seem like it wouldn't be worth it to spend money to have a manufacturer store and ship your products, many food items require special storage policies to be followed. While it can be hard to find, some manufacturers, such as Discover CBD in Colorado Springs, offer storage and dropshipping options of 3rd party products meaning you can run an entire national brand with one person remotely with next to no overhead and know all your products are stored and shipped in ways compliant with food and supplement product requirements. So when brands realize they can have their products made for them faster and cheaper than they can make it themselves, it often times becomes a no brainer for CBD oil and supplement companies.
The downsides to contract manufacturing
High MOQ requirements
While there are many upsides to using contract manufacturers there are some potential downsides as well. The largest hurdle most brands have to overcome when using a CBD oil manufacturer is the MOQ (minimum order quantity). It's not unheard of for manufacturers to have MOQ's in the hundreds or even thousands. The reason for MOQs is that it's not cost efficient for a manufacturer to make just a few units of a product. One of the main reasons manufacturers can make so many products for such a great price is because the machines they utilize to quickly and efficiently make hundreds or even thousands of products can make very many items very fast with little input from a human thus cutting down labor costs. An order of minimal size means the manufacturer won't get the efficiencies of scale which can significantly increase the cost of production and therefore many manufacturers are not willing to manufacture small orders. In the instance of small production runs, it will often take more time to set up the machines for the production run than the length of the actual production of the said product itself. There are ways some manufacturers get around the issue of cost increases when not producing at scale. If you know you're going to want small production runs, do your homework and make sure the contract manufacturer you choose has machines capable of small production runs. As stated before not all companies have high MOQs though. Melinda Bloch the COO of Discover CBD says "While it's easier and cheaper to make large groups of products, we pride ourselves on the ability to work with companies of any size to make their products in a high quality, certified setting for cheaper than they can make them without us".
Control over your products
Another potential downside to working with a CBD oil manufacturer is the client may have less control over how their products are made. It's not atypical to have contract manufacturers who want to fit everyone into the same cookie cutter products as that is faster and cheaper for the manufacturer because they are already set up to make those products. Those same companies will oftentimes make custom formulated products but will impose a much higher MOQ. For some companies, this is not something they are willing to turn away. While you may see slightly higher prices for your products, at least they can make it to your exact specifications, keeping you in control of your product lineup from start to finish. The real question many brands need to ask themselves is: How unique of a product do I want to have made and am I willing to pay a premium for the production of said product?
Discover CBD is one of the fastest growing contract CBD manufacturers in the United States
Discover CBD has been in business since 2015 and was one of the original pioneers in the CBD and hemp space. Since 2015, Discover CBD has opened over a dozen Discover CBD stores in Minnesota, New York, Colorado, Texas, and Wisconsin and supplies over 1000 shops with hemp products nationwide. In 2019, Discover CBD built one of the largest ISO-7 and CDPHE certified cleanrooms in the country to manufacture their own product lines as well as other brands via their co-packing, custom formulation, and dropshipping programs. In March of 2022 Discover CBD's facility became cGMP certified and they expect full NSF certification to be completed by the end of summer 2022. Discover CBD has been one of the largest manufacturers to take on new clients from large to small and everywhere in between. They are uniquely suited to handle these projects based on their over 100 years of combined experience in the cannabis space, machinery capability, and connection to important supply lines such as labels, packaging, raw ingredients, and more. Discover CBD does much more than hemp and CBD though, they also package nutraceutical products from every sector including Turmeric, Lion's Mane, Probiotics, Facial Serums, Cholesterol health products, and other cannabinoids such as CBN, CBG, CBC, HHC, THC-V, D8, D10, and THC-O. If you are interested in contacting Discover CBD because you have a need for contract manufacturing for your products you can email them at [email protected], or call them at 1-888-875-HEMP. You can also visit them online at their website DiscoverCBD.com.
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SOURCE: Discover CBD