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.
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 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 with 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. opens in a new windowIFS 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.
For businesses looking to take the next step, the benefits of opens in a new windowco-packing are huge. Signing on with a co-packer provides a multitude of opportunities across the board. With the help of a co-packer, businesses will be able to prioritize formerly neglected aspects of the company and create a more refined product.
One of the biggest values a co-packer can provide is freeing up a business owner’s time. Without having to worry about budgeting time to create and package products you will be much freer to branch out. While the product is the most important part of your business there are so many more elements to your business. With your product in safe and efficient hands, you will be able to focus on a few more behind the scenes essentials, such as:
- Networking and expanding vendor options
A co-packer will save you personal time and save your production time as well. As the needs of today’s consumers change, so does the demand for the way your goods need to be packaged. Whether your goods need to be bundled in small quantities for eCommerce consumption, or assembled into a pallet display for a club store, a co-packer can help. A co-packer’s main objective is to create and package your product in a manner that meets your end-market demand.
The primary function of a co-packer is to mass-produce your merchandise in the format that meets your end-market demand. Depending on the size of the co-packer you could be signing on for a guaranteed volume. A guaranteed volume is an assured amount of your product created by the co-packer. These quantities can range anywhere from 200 to 1,000+ per run. Signing on for a guaranteed volume could give you the chance to expand further than you thought possible and test your boundaries as a company.
If the demand for your product is high enough for you to be joining up with a co-packer, this is the most straightforward way to ramp up production. Creating 200 units of your product might take you weeks on end, but with a co-packer the process is completely expedited through line set-ups and automation (where applicable). Getting your hands on mass amounts of your product is the way to take your business to the next level and no one can do that better than a co-packer.
Hiring a co-packer, and utilizing their pre-existing space, automation, and leadership team could save you money in the end. A co-packer like opens in a new windowIFS has comprehensive care that will do so much more than packaging your product. IFS has created a model that allows their customers to work with one organization for all services from design through consumer::
- Packaging design (primary pack, secondary pack, unboxing experience)
- Display design (structural and creative)
- Ecommerce and retail distribution
- Club Store programs
- Reverse logistics
- Rework (ticketing, deticketing, repack, testing, etc.)
- Kitting, Bundling, Blister Packs, Gift Sets, Subscription Services
The right co-packer will be able to help you improve your product from formulation to distribution. Finding a one-stop-shop for your product will minimize any other outside contracts. Rather than hiring a designer, a distributor, and extra labor to meet demand—all of which would become cumbersome and costly—find a co-packer with the services you need.
As a thriving business, odds are you have your own production line down pat. However, co-packers specialize in efficiency and will be able to accommodate more production in a fraction of the time. More than that, co-packers like IFS offer services in other aspects outside of production:
- Warehousing and Logistics
- Domestic TL, LTL, Small Parcel Carrier Management
- Transportation & Reverse Logistics
Every step of the production process can be entrusted to and improved by a co-packer. IFS handles both primary and secondary packaging which is essentially everything from creation to getting it to the vendor. Because you’re trusting a professional entity with your product there is a certain quality expectation as well. Mistakes commonly made when you’re on your own won’t be a concern when a co-packer is involved. One of the benefits of co-packing is that it has the potential to round out your entire business.
Outsourcing to a co-packer has a lot of compounding benefits when you get down to it. The production of more merchandise, as well as the freeing up of your time, will open the door for more. If you have more time for marketing and networking you’ll likely end up needing more product, and with the demand booming, you’ll need a faster turnaround. A co-packer will be able to fill orders at a rate and with quality that you wouldn’t be able to handle as a solo operation.
The benefits of fast production are more than just financial. A faster output will usually mean a more efficient one as well which means less troubleshooting and more perfect products hitting the market.
Speed in the co-packing industry is a sign of proficiency and dedication to getting your product right time after time.
Working with a co-packer means that you have access to a much wider skill set and much more experienced hands. As a result, your product will nearly instantly have a difference in product quality. Co-packing facilities and workers often have to earn certain certifications before they’re allowed to open their doors, which makes them all the more dependable. The fact is that co-packers will be able to do things you just aren’t capable of doing yourself.
Taking your business to a co-packer is a surefire way to take your brand up another notch. Having professional take care of packaging will give your product a refined look and feel that will make it seem much more at home among big retailers’ shelves. At opens in a new windowIFS we offer our professional touch from production to placement. We will help you get your product on the shelf in a way that will catch eyes and drive sales.
The Benefits of Co-Packing in Summary
The benefits of co-packing stretch across every aspect of being a business owner. When you have a co-packer, you have more time to explore your company’s future and your product will be more readily available to the market. Your product will be in the hands of professionals who will be able to lend you insight and advice to improve quality and cost-effectiveness. Above all, a co-packer can help you reach new heights with a strong product and a firmer grasp on the marketing and distribution facets of the business world.
Reach out about Co-Packing for your business at our Speak to a Specialist Page.