What Is Contract Manufacturing?
Contract manufacturing refers to a business model where a company manufactures products under the brand or label of another company.
In contract manufacturing, companies with specialized manufacturing capabilities produce items based on the specifications provided by their clients. This includes product designs and sometimes the raw materials required for production. The client company, in turn, leverages the manufacturing company’s facilities and expertise to fulfill its product requirements.
This arrangement is particularly beneficial for companies without their own manufacturing capabilities or those in need of specific production expertise. Contract manufacturers often have specialized knowledge and facilities designed for particular products or processes, enabling efficient production and ensuring the delivery of high-quality goods.