There are a lot of decisions to be made as your business grows and you need some help, a big one being: co-packing vs private label. These two industries do basically the same thing, but there are differences in their functions and benefits.
What is co-packing?
Just as a quick review, let’s go over what co-packing actually is. Co-packing is the outsourcing of your product’s manufacturing and packaging to a third-party specialist. A co-packer takes your creation and fine-tunes the production process to make it available on a grander and speedier scale. Depending on the co-packer, they can also help with networking and design.
What is private labeling?
A private label is also a fulfillment entity. But the big difference here is ownership. While a co-packer distributes your recipe under your name, a private label will distribute their product under your name. A private label is perhaps better suited for a company looking to create something but in need of more help.
As you can see from this overview, there are a few distinct differences. But let’s explore a bit further the differences between the two.
Services
Both a co-packer and a private label will yield a finished product, but there are few more things to consider. A private label will work with your brand to create a formula for your product and then package it for you. They will assist in the development of the product, the branding, and the packaging. However, there is no promise of exclusivity when it comes to private labeling. The private label owns the recipe or formula, which means they can do with it as they please.
A co-packer’s services are more varied, depending on the company. At the heart of it, a co-packer will package and distribute your product. Pretty cut and dry. But there are co-packers, like IFS, who will do more than just bundle up your goods. At IFS we offer our clients a myriad of services including design, fulfillment, distribution, reverse logistics, and much more. Our mission is to provide a single-source provider that can meet the ever-changing end-market demand. Our primary pack and secondary pack designs/solutions can be as simple as a shrink bundle for eCommerce compliance, all the way through developing packaging designs to achieve a high-end unboxing experience. Whatever your needs are, from the individual consumer, through reaching the masses via point of purchase displays and “moment of truth” packaging, IFS can service all your needs.
Even within the confines of private label versus co-packer, there are different levels. If you have a product that needs a little work in branding, primary and secondary packaging is for you. If you just want fulfillment of your product, pursue general co-packing. If you have an idea but no idea or way to start, reach out to a private labeling company.
Pricing
Pricing exists on a sliding scale. All things considered, if we tally up all of the things that both a co-packer and private labeling company do there are slightly different fees due. A private label does everything from start to finish, so their pricing will likely cover more services. With a co-packer, there are more options.
Private labeling will connect you with a team of professionals who will help you formulate, develop, test, design, and ship a polished product. Because their hands are on every aspect of the process, the potential for higher costs is greater. There is also no overhead by completely outsourcing.
When it comes to co-packing pricing, there is some overlap with what you’ll be paying for. You will save on overhead, you’ll be paying for packaging, distribution, and storage. But, unless you opt for a secondary packaging specialist, there will be less to pay for. Co-packers do a lot, but because you’ve already done a good chunk of the work by creating your product costs will likely be less.
These, of course, are broader statements about pricing, and your own research and cost comparisons should be done. Pricing will vary from co-packer to co-packer, as they will from private label to private label.
Summary of Co-Packing vs Private Label
There are many facets that go into the differences between co-packing versus private labeling. Each has its strengths and weaknesses and appeals to different businesses. A private label is essentially a ghostwriter for the mass production of goods. A co-packer is a facility that can elevate your product but focuses on effective mass production. IFS is considered a “Concept through Consumer” co-packer and can work with you from start to finish to develop the optimal solution to increase your brand awareness and sales.
Reach out about Co-Packing for your business at our Speak to a Specialist Page.