Can you distinguish cosmetic OEM, ODM, and OBM? 5 points you ...

The demand for cosmetics in the global beauty market is increasing year by year, and there are still many new start-up companies that are poised to capture the beauty market. In order to make finished products and sales volume meet expectations, many companies will ask cosmetics OEM manufacturers to design outer packaging and formulas and even entrust them to plan brand and sale channels. Want to know what are the services of cosmetics manufacturers? How does the manufacturing process work? What are the key points to pay attention to? If you want to start a cosmetics brand, don't miss out on this article.
 

What are the cosmetics manufacturers' services?

Cosmetics manufacturers' service items are divided into OEM, ODM, and OBM. The three are also entrusted by customers to manufacture and mass-produce cosmetics products, but the scope of acceptance to produce is slightly different. How each item works is described in detail below, let's see it together.
 

OEM

OEM is short for Original Equipment Manufacturer. Cosmetics OEM manufacturer, which means to make mass production according to the client's cosmetic ingredients, and do not participate in the packaging and formula design. In the OEM service content, the product formulation design, specification size, packaging appearance, etc. are all determined by the clients. When the experiment is completed and mass production is ready, the cosmetics manufacturer will be entrusted to carry out mass production according to the information provided by the customer.Place the customer's trademark and logo on the packaging of the cosmetics.

ODM

ODM is short for Own Designing & Manufacturing. ODM covers packaging design, formula design, and the production of finished products. Experienced cosmetics manufacturer, familiar with the appropriate ingredients of each cosmetic, and able to make differentiated products that meet client's requirements. Cosmetic packaging, bulk, and packaging design are all covered, and the manufacturer provides advice and design assistance, so the cost is higher than OEM.
 

OBM

OBM is short for Original Brand manufacturing. OBM manufacturer assists clients who want to create their own brands to build brands step by step from scratch. In addition to the design and mass production of the above two products, market analysis, brand positioning, and brand planning are all handled by the manufacturer. OBM allows cosmetics manufacturers to become clients' marketing consultants, and also provide advice on pricing strategies and sale channel selection, becoming the best partner for clients to create their own cosmetic brands.
 

OEM/ODM/OBM Comparison Table

OEM ODM OBM Service Content Make mass production according to the client's cosmetic ingredients, and do not participate in the packaging and formula design. Covers the packaging design, formula design, and the production of finished products Market analysis, brand positioning, brand planning, packaging design, formula design, and finished products are all handled by the manufacturer Suitable for Those who own established products, or have the ability to develop and research formulas by themselves. Those who have no idea about the production of cosmetics products and can not develop their own products. If you want to build your brand, you should pay more attention to the experience and market familiarity of cosmetics manufacturers, and leave most of the planning and design matters to the OEMs.

 

How does the OEM manufacturing process work?

 

1.Communicate with clients and understand product information

Communication in the early stage of the cosmetics OEM can be said to be very important. The manufacturer will confirm the needs of customers and provide suitable solutions. At this stage, clients should try their best to inform the manufacturer of their needs, and at the same time, pay attention to whether the specialty of the manufacturer meets their needs.
 

2.Confirm product details, quantity, quotation

In this stage, in addition to confirming details such as product formula and outer packaging with the manufacturer, the minimum quantity of production and quotation should also be confirmed. After confirming that the plan provided by the manufacturer meets the budget, you can ask how many times the same product sample can be adjusted.

3.Making samples and testing

After the sample is produced, if the clients have any doubts about the texture, color, product packaging, etc., they can discuss it at this time, and after the adjustment and repeated tests by the manufacturer, the most ideal product can be made.
 

4.Sample final confirmation

Once the samples have reached the confirmation stage, will enter the formal mass production stage. So make sure to pay attention to all product details at this time, and after confirming that they are correct, ask the manufacturer to proceed to the next stage.
 

5.Enter the mass production stage

The mass production stage is the formal production process of cosmetics manufacturing. You can arrange your follow-up product launch plan in advance by knowing the lead time and transaction terms of the manufacturer. With a huge professional division of labor OEM manufacturer, it can accurately measure the production time and complete client's commissions on time.
 

6.Delivery

Before delivery, professional manufacturers must carry out strict quality control inspections to control the quality of finished products.
Inspections are conducted according to government regulations and standards to ensure that consumers are safe to use. While the manufacturer is managing the inspection, you can start to prepare for the product launch, log in to the product registration platform of the Taiwan Food and Drug Administration, and create a product information file in hard copy or electronic file following the "Measures for the Management of Cosmetic Product Information Files", so that the product can comply with cosmetics listing regulations.  

4 considerations for entrusting cosmetics OEM

Confirm the MOQ of cosmetics manufacturer

MOQ means minimum order quantity. First of all, you need to know that in order to develop cosmetics, the manufacturer will need to start the production line, and therefore there will be corresponding costs. If the cosmetics you want to develop use better quality ingredients, or the packaging design is more special, it is reasonable that the cost is higher.
The MOQ will also be much higher. Therefore, before entrusting a cosmetics manufacturer, you must know the MOQ of the products in advance, so that you can choose the corresponding style according to your budget and marketing ability.
 

What are the factors that affect the cost?

Many factors affect the production cost of cosmetics, including the selection of raw materials, the selection of product packaging, the complexity of processing, the production volume of products, and the overall quality inspection and design details. It is suggested that at the stage of negotiating with cosmetics manufacturers, you can know more about the cost factors mentioned above.
 

Can the manufacturer maintain quality consistency?

Good cosmetics must consider the consistency of quality. The finished product must undergo a long-term stability test, and countless product tests and trials to ensure product functionality. All BEAUNION products have passed -hour stability tests, and passed high-temperature environments of 45°C and high-low temperature cycle tests from -5°C to 40°C, challenging product quality with the most severe temperature. Even 3 years after shipment, we will continue to observe the product retention situation.

Whether the manufacturer has obtained cosmetics GMP certification

To develop innovative, stable, and safe products, it is recommended to choose a large-scale manufacturer for production. It is very important to obtain the two major indicators of a cosmetics factory, such as passing the cosmetics GMP certification of Taiwan and the ISO international certification, to ensure that the finished product is excellent.

  Third-party inspection
The safety of cosmetics is very important, and it is recommended to send them to a third-party inspection before going on the market to ensure compliance with safety specifications. BEAUNION provides the service of sending products to third-party inspection on behalf of clients and recommends clients choose the most effective inspection plan. SGS and SuperLa are common cosmetic and skin care product inspection agencies. The inspection content includes sunscreen efficacy tests, function evaluation, antibacterial tests, stability tests, safety tests, etc.  

In conclusion

I believe that you already know the cosmetics OEM process and the key points that need to be paid attention to now. The next step is to choose an excellent cosmetics manufacturer to produce high-quality and stable finished products for you.

BEAUNION has rich experience. BEAUNION is cosmetics manufacturer with more than 50 years of experience. We are the supplier of many well-known global brands and provides high-quality products. We have a professional technique, complete equipment, professional research and development, and excellent quality, and the mission you entrust us must be achieved. We are a large-scale cosmetics factory that you can trust.

Are you looking for a cosmetics manufacturer or a makeup manufacturer, please contact us.

Understanding the Basics

Cosmetics manufacturing involves the production of various beauty and personal care products, including skincare items, makeup, haircare products, and fragrances.

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Exploring OEM and ODM in Cosmetics Manufacturing : Difference Between OEM and ODM

OEM: Original Equipment Manufacturer

When it comes to cosmetics manufacturing, understanding the distinction between OEM and ODM is crucial. OEM, or Original Equipment Manufacturer, refers to a company that produces cosmetics based on the specifications provided by another brand or entity. In essence, OEM manufacturers are responsible for the production process, from sourcing raw materials to packaging the final product. However, they do not have ownership over the formulation or branding.

Advantages of OEM Cosmetics Manufacturing:

• Cost Efficiency: By outsourcing production to an OEM manufacturer, brands can avoid significant upfront investments in production facilities and equipment.
• Expertise and Resources: OEM manufacturers often possess specialized knowledge, technology, and resources, ensuring high-quality production.
• Time Savings: With OEM manufacturing, brands can expedite the product development process and bring their offerings to market more swiftly.

Disadvantages of OEM Cosmetics Manufacturing:

• Lack of Control: Since brands rely on OEM manufacturers for production, they have limited control over the manufacturing process and quality assurance.
• Brand Differentiation Challenges: Utilizing OEM services may result in products that bear similarities to those of other brands, making it challenging to differentiate in the market.
• Dependency on Suppliers: Brands are dependent on OEM manufacturers for timely delivery and adherence to quality standards, which can pose risks if issues arise.

ODM: Original Design Manufacturer

On the other hand, ODM, or Original Design Manufacturer, involves a more comprehensive approach to cosmetics manufacturing. In addition to producing cosmetics, ODM manufacturers also provide design and development services. This means that ODM manufacturers not only manufacture products but also contribute to product conceptualization and formulation.

Advantages of ODM Cosmetics Manufacturing:

• Customization Opportunities: ODM manufacturers offer greater flexibility in product customization, allowing brands to create unique formulations and packaging designs.
• Reduced Time to Market: With ODM services, brands can streamline the product development process, as manufacturers are involved in every stage, from concept to production.
• Comprehensive Support: ODM manufacturers often provide additional support services, such as market research, trend analysis, and regulatory compliance assistance.

Disadvantages of ODM Cosmetics Manufacturing:

• Higher Costs: ODM services typically come at a higher price point compared to OEM manufacturing, as brands pay for design and development expertise.
• Limited Brand Control: While ODM manufacturers offer customization options, brands may still face constraints in fully realizing their vision due to manufacturer preferences or limitations.
• Risk of Intellectual Property Issues: Collaborating closely with ODM manufacturers may raise concerns regarding intellectual property rights, particularly if manufacturers work with multiple brands simultaneously.

Navigating Private Labeling and White Labeling in Cosmetics

Private Labeling: Tailoring Products to Your Brand

Private labeling and white labeling are common strategies for brands looking to enter the cosmetics market without investing in extensive product development or manufacturing capabilities. Private labeling involves partnering with a manufacturer to produce cosmetics under a brand's label and specifications.

Advantages of Private Labeling:

• Brand Ownership: Private labeling allows brands to establish ownership over their product lines, enhancing brand recognition and loyalty.
• Lower Costs: By leveraging existing formulations and production capabilities, brands can minimize upfront investments and operational expenses.
• Quick Market Entry: Private labeling enables brands to swiftly launch new products without the time-consuming process of formulation development and testing.

Disadvantages of Private Labeling:

• Limited Differentiation: Since private label products utilize pre-existing formulations, brands may struggle to differentiate their offerings from competitors in the market.
• Quality Control Challenges: Maintaining consistent quality across private label products can be challenging, especially if brands work with multiple manufacturers or suppliers.
• Brand Perception Risks: If consumers perceive private label products as inferior in quality or lacking in innovation, it may negatively impact brand reputation and market positioning.

White Labeling: Streamlining Product Acquisition

White labeling, similar to private labeling, involves partnering with a manufacturer to produce cosmetics under a brand's label. However, in white labeling, manufacturers typically offer ready-made products that brands can purchase and market as their own without significant customization.

Advantages of White Labeling:

• Convenience: White labeling offers a straightforward solution for brands seeking to expand their product offerings without investing in product development or manufacturing infrastructure.
• Cost Savings: By opting for white label products, brands can avoid the expenses associated with formulation development, production equipment, and staffing.
• Diverse Product Range: White labeling allows brands to access a wide range of cosmetics products, from skincare to color cosmetics, without the need for specialized expertise.

Disadvantages of White Labeling:

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• Lack of Customization: White label products are pre-formulated and packaged, limiting brands' ability to customize formulations or packaging according to their specific preferences.
• Brand Dilution Risks: Since white label products are often available to multiple brands, there is a risk of diluting brand identity and uniqueness in the market.
• Dependence on Suppliers: Brands relying on white label products are vulnerable to supply chain disruptions and quality control issues inherent in outsourcing production.

The Role of Third-Party Cosmetics Manufacturers

Understanding Third-Party Manufacturing

In the realm of cosmetics manufacturing, third-party manufacturers play a pivotal role in producing products on behalf of brands or companies. Unlike OEM or ODM manufacturers, third-party manufacturers do not typically contribute to product development or formulation but focus solely on production.

Why Are They Called Third-Party? The term "third-party" denotes the external nature of these manufacturers in relation to the brand and the original product concept. Brands essentially outsource the entire production process to these external entities, hence the classification as third-party manufacturers.

Advantages of Third-Party Cosmetics Manufacturing:

• Scalability: Third-party manufacturers offer scalability, allowing brands to adjust production volumes based on market demand without investing in additional infrastructure or resources.
• Focus on Core Competencies: By outsourcing production to third-party manufacturers, brands can allocate more resources and attention to core business activities such as marketing, branding, and distribution.
• Cost Efficiency: Third-party manufacturing often proves cost-effective, as brands can leverage manufacturers' expertise, economies of scale, and production efficiencies.

Disadvantages of Third-Party Cosmetics Manufacturing:

• Quality Control Challenges: Maintaining consistent quality standards across production batches can be challenging when relying on third-party manufacturers, especially if communication and oversight are lacking.
• Intellectual Property Risks: Collaborating with third-party manufacturers may expose brands to risks related to intellectual property infringement or unauthorized replication of formulations.
• Dependency on Suppliers: Brands relying on third-party manufacturers are inherently dependent on external suppliers for timely delivery, quality assurance, and adherence to production schedules.

Diving Deeper into Custom Formulation and Contract Cosmetics Manufacturing

Custom Formulation: Tailoring Products to Unique Requirements

Custom formulation in cosmetics manufacturing involves creating unique product formulations tailored to a brand's specific requirements, preferences, and target market. Brands collaborate closely with formulation experts or laboratories to develop formulations that align with their brand identity, performance standards, and market positioning.

Advantages of Custom Formulation:

• Brand Differentiation: Custom formulation allows brands to differentiate their products in the market by offering unique formulations that cater to specific consumer needs or preferences.
• Innovation Opportunities: Custom formulation encourages innovation and creativity, enabling brands to introduce novel ingredients, formulations, and product concepts to the market.
• Enhanced Brand Value: By offering custom-formulated products, brands can enhance their perceived value, credibility, and reputation among consumers and industry stakeholders.

Disadvantages of Custom Formulation:

• Higher Costs: Custom formulation entails higher upfront costs associated with research, development, testing, and regulatory compliance, making it a more significant investment compared to utilizing pre-existing formulations.
• Time-Intensive Process: Developing custom formulations requires time and patience, as brands navigate the complexities of formulation development, stability testing, and regulatory approval processes.
• Technical Expertise Required: Brands may need to collaborate with formulation experts or laboratories possessing specialized knowledge and capabilities to execute custom formulation projects successfully.

Contract Manufacturing: Outsourcing Production with Flexibility

Contract manufacturing in cosmetics involves partnering with external manufacturers or production facilities to produce cosmetics products based on agreed-upon terms and specifications. Contract manufacturers offer production capabilities, facilities, and expertise to brands seeking to outsource all or part of their manufacturing operations.

Advantages of Contract Manufacturing:

• Flexibility and Scalability: Contract manufacturing offers brands flexibility in scaling production volumes based on demand fluctuations, seasonal trends, and market expansion opportunities.
• Cost Efficiency: By outsourcing production to contract manufacturers, brands can benefit from economies of scale, production efficiencies, and cost-saving opportunities compared to in-house manufacturing.
• Focus on Core Competencies: Contract manufacturing allows brands to focus on core business activities such as branding, marketing, and distribution, while leaving production and logistics to specialized partners.

Disadvantages of Contract Manufacturing:

• Quality Control Risks: Ensuring consistent quality across production batches can be challenging when working with contract manufacturers, particularly if there are communication gaps or oversight issues.
• Intellectual Property Concerns: Collaborating with contract manufacturers may raise concerns regarding the protection of proprietary formulations, trade secrets, and intellectual property rights.
• Dependency on Suppliers: Brands relying on contract manufacturers are reliant on external suppliers for timely delivery, quality assurance, and adherence to production schedules, which can pose risks if issues arise.

By understanding the nuances of cosmetics manufacturing, brands can make informed decisions when selecting manufacturing partners and strategies, ultimately driving business growth and success in the dynamic cosmetics industry.

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