When looking for a co-packer there are a few key things that must be taken into account. Consideration should be given not just to your needs but to the limitations and requirements of your potential new partner and their facility. Some co-packers specialize in food manufacturing, while others specialize in CPG/Medical primary and secondary packaging, like IFS.
There’s a lot that goes into finding the right outsourcing partner, and that’s what co-packing specialists are for. Talking to a co-packing specialist can help simplify the finer points and create a better understanding of the process as a whole.
There are layers to co-packing. Some simply deal in filling orders, while some go into primary and secondary packaging. Primary packaging holds the product and secondary packaging takes care of the packaging that is both eye-catching and functional–like putting a bottle of nail polish or eyeshadow palettes into a branded box. Not every co-packer will do it all.
Selecting a co-packer is no light or easy choice, so here’s what we recommend you should look for when the time comes for your company to expand.
Price
The first, and maybe most obvious, thing to take into consideration is pricing.
Having a co-packer as part of your business model can be a bit of a financial balancing act. Yes, it can save you money in regards to overhead and production volume, but there is always a trade-off. Outsourcing comes with a whole new host of fees that you didn’t have to worry about when starting out. With a co-packer, you will be paying for labor, packaging, storage, etc. which can add up.
Then, there is the old saying that time is money, and finding a co-packer will find you with plenty of time on your hands. Because you will no longer be putting all of your efforts into creating, you can start to focus more on managing. Rather than focusing on production, you’ll be able to think of ways to expand, like…
- Coming up with new product ideas
- Opening up the opportunity to network
- Pursuing new partnerships
- And more…
Having a co-packer that handles primary and secondary packaging can impact pricing but these companies will give you more than a filler will. If you know your company is in need of branding and display help then a company like IFS will have more to offer.
Weigh the costs against the services provided carefully. You want to make sure you’re getting the most bang for your buck without any corners being cut or any part of product integrity is lost. As in all things, beware of pricing that seems too good to be true.
The bottom line is your company should be sure that outsourcing is something that is financially possible before considering a co-packer. Take the time to evaluate your books and the costs and services of a few facilities. Decide which things are essential to you and what can come to compromise. Always be cost comparing. Shop around until you find a co-packer that will meet your needs without breaking your bank.
It is vital to find the middle ground in out-of-pocket costs and incoming revenue to ensure that you stay afloat and sailing smoothly.
Location
While this usually applies to real estate, a factor in finding a co-packer should be location, location, location.
Even though you’re officially outsourcing your product, it’s still your product so checking in on production is important. If quality control or assurance becomes an issue a visit to the facility might be in order. If your chosen facility is across the country, this could quickly become an issue. Having your co-packer nearby will at least give you a modicum of control when it comes to QA/QC.
Proximity can also help when it comes to cutting shipping fees. Rather than paying transcontinental shipping fees, you could be paying a few hours worth of gas. The ability to keep an eye on things without having your hands full will provide peace of mind in production.
For some, there might not be the option of an in-state co-packer. If that is the case then choosing a facility that has a stellar reputation for communication and transparency is non-negotiable.
Whether you’re looking at co-packers nearby or you have the confidence in a facility across the country you should see it for yourself. Having eyes on the actual facility can be enough to sway your choice one way or another. You can’t trust a company with your product if their factory doesn’t meet par. Getting a proper feel could take more than one visit. This is, again, where a local co-packer would be beneficial to the bank account.
Co-Packer Company History
Just like you would with a new employee, you must perform a deep dive on the companies you are considering for partnership.
Treat finding a co-packer like a job interview. Go in with questions regarding your requirements. A few questions to ask when checking in on a company’s history: How long have they been around? What do former or current customers have to say about them? Who is running this business?
Taking a look at a company’s legacy in the industry is important, but perhaps not make or break. A long-standing co-packer will of course have a better understanding of the entire process and will likely have a wider skill set than a newer start-up. This is not to say that newer co-packers can’t be trusted, everyone starts somewhere. When looking at company history what it will come down to is overall credibility. This newer company might be relatively green compared to a time-honored establishment, but they could have raves about their innovation to back them up.
Some co-packers deal specifically in food and filling, with little else thrown in. If you’re looking for a co-packer who will not only get your product together but make it look better than you could and even help when it comes to distribution, you’ll want to make sure they deal in primary and secondary packaging.
Reviews are what company reputations are staked on nowadays, so listen to what people are saying. Talk to a co-packing specialist to see what their facility is about, to make sure your needs match. You need to be certain that this company you are trusting is going to maintain the integrity of your product.
The name of the company isn’t the only thing that should matter, it’s important to look into the faces as well. The men and women who run the line at the co-packing facilities are the ones you need to trust. Do some digging into the requirements for employment at each facility. Are certain training or certifications mandatory?
Is there an average amount of years worked in this industry among the staff? There are a lot of cogs spinning in a co-packing operation. Be certain they all mesh together before signing on.
Word of mouth is invaluable in the business community. Find out from those who have been there and done that which co-packers are worth your time and which should be avoided. Learn which facilities are reliable, who communicates effectively, which locations are actually worth the money.
Company reputation and history are an exceptionally close second to pricing. Consider these things very carefully at each step.
Co-Packer Services
This should be more of a preliminary step when it comes to finding a co-packer. If a co-packer’s services don’t meet your needs then there’s no point in looking into their pricing and location.
As we mentioned before, co-packers aren’t always a one-stop-shop, services and specialties will vary. If you are in the cosmetics or medical field, a place like IFS would be for you—but not if your brand is artisanal hot sauces.
Co-packers supply a multitude of different services. At IFS, we take care of primary and secondary packaging. Rather than simply filling orders, we are dedicated to manufacturing products in such a way that guarantees safety and appeal. We offer services in packaging as well as design and even display.
If your products have specific packaging and shipping needs, that’s a huge box for a company to check off. You know your product better than anyone, which means you know exactly what it will take to get it done and so should your co-packer.
One thing to look out for is guaranteed volumes or minimums that would be far too much for your company to handle. Guaranteed volumes and minimums are a mandated quantity of your product put down by your co-packer. These quantities can vary based on the size of the co-packer you go with if they have them at all. In general, if you go with a larger company they are more likely to have a production minimum and a big one compared to a smaller company.
Guaranteed volumes are something of a blessing and a curse. If your business is in a place where it can accommodate offloading a 1,000 unit shipment then it won’t be a problem—but it’s always an easy way to bite off more than you can chew.
Before you consider what it will cost or where to look for a co-packer, you have to know exactly what it is you’re looking for. Figure out what is a fixed point and what can be negotiated beforehand.
Wrap Up
Now, let’s recap a few of the bigger picture items.
Using a co-packer will take your hands out of the manufacturing and allow you to prioritize other aspects of your company. Maybe manufacturing was the biggest bear of your business. Maybe being stuck in production kept you from developing a different branch of the company. These are all worries of the past with a co-packer. Your new concerns are growing and making sure you stay on track so you can continue to afford your co-packer.
Even if you’re moving production out of your home, it’s ideal to keep things nearby. Finding a co-packer relatively close to you can be the difference between starting over from scratch and making a once-a-month visit to make sure things are to your liking. When options are limited or non-existent in your area, look for a co-packer with an exemplary reputation for efficiency and be prepared to shell out a bit more money.
You want to know the inner workings of your desired co-packer, right down to who is working the line. Learn how capable the staff is, what their business practices are if people who have been where you are right now would recommend their services. Ask all the questions you can think of when talking to a specialist to ensure clarity on any and all of your concerns.
Know what it is you’re looking for before you start doing the leg work. If you know you’ll need more help in design as well as order fulfillment you’ll want to find a co-packer that handles primary and secondary packaging, rather than just filling. Make a list of things you need to stay firm on and what has wiggle room before you get out there to do location scouting and cost comparisons. That way you’ll be able to rule out the right and wrong co-packers without too much extra thought or time.
Finding the right co-packer can be daunting and it will take time and effort to make the proper choice for you and your business. Once you’ve found the right facility the only thing that’s left to do is keep your business growing, something a co-packer can help with leaps and bounds.
Learn more about what is co-packing, and read our blog post on what is co-packing.