Why should vendors take advantage of co-packers in the kratom industry? As it turns out, the benefits are plenty, and most small food and supplement brands utilize co-packing in some shape or form. When you’re not spending hours upon hours doing this yourself, you will have more time for important aspects such as building your business via new marketing and sale’s strategies.
Co-packing isn’t a new concept at all, and you may be surprised that not only has it been around for many, many moons, but it also serves millions of companies around the world.
Let’s look further into each, what they mean, and the core differences.
White Labeling Versus Contract Manufacturing: What’s the Difference?
There are two different forms of co-packing; White Labeling and Contract Manufacturing. While white labeling will use your unique branding, they will actually manufacture the products for your business. In contrast, contract manufacturing will use your company’s materials in order to create specific products for your individual needs. Let’s take a look at an example for each:
The following scenario highlights how white labeling works. You’re shopping at Walmart and are comparing Campbell’s Chicken Noodle Soup to the Equate brand Chicken Noodle Soup, with the latter being significantly less in price. The Equate brand you’re looking at may in fact be manufactured at the same plant, but that factory will use different labeling in order to accommodate each brand. This is just one example out of literally millions of brands that take advantage of white labeling.
When thinking about contract manufacturing, keep the word “outsourcing” in mind, because that’s essentially what it translates to. For this example, we’re going to take a look at Apple. Do you have any clue where your iPhone was made? While many believe they’re all made in China, it’s far more complex than this. Apple uses tech giant Foxconn as one of over 200 suppliers. According to RG Group, “iPhone’s cameras are made in Japan, the radio frequency modules in Taiwan, the screen display in the US, and the gyroscopes in France and Italy.” Think of it as a web, where the companies are outsourcing different businesses in order to attain the best quality and quantity, while also garnering the most competitive prices.
Top Three Reasons Why Your Company Should Consider Purchasing White Label Kratom Products
There are a plethora of reasons as to why millions of businesses choose to partner with white label companies. The reality is, if you want to succeed in the world of kratom suppliers, there is so much more to it than simply “selling.” We’ve narrowed down the top three reasons why it it is not only a wise choice, but also a timesaver, allowing you to set your focuses on other important aspects of the business.
1. Your Company’s Product Portfolio Is EVERYTHING
If you’re managing every aspect of a kratom company solo, it can really bog you down while limiting your capabilities. Think of it this way; white labeling will effectively allow you to also set your concentrations on diversifying your portfolio, i.e. bringing other products into the mix. It will allow you to still have your own kratom branding, but without the hassle of the setup process.
2. Focus on Marketing
It isn’t easy running a kratom business, which you likely already know if you’re reading this. In order to be successful, you will need to be an expert at sourcing, manufacturing, and dealing with all of the extra compliance issues that go hand-in-hand with carrying raw, herbal products.
If you’re one who loves focusing on sales and marketing, white labeling is an absolute no-brainer. It will allow you the time you need in order to devote your energy into what you are not only passionate about, but shine at!
3. The Ability to Test the Market
Launching a new product takes careful, strategic planning, in addition to a well-executed plan. When your company white labels a product, you will be afforded the opportunity of finding out if the new product is right for your brand, but without the need to spend such a large amount of company funds. Don’t feel like your current white label is giving you the best bang for your buck? No problem. Part of the beauty in white labeling is that it will allow you to test the waters of many different products and companies alike.
Top Three Reasons Why You Should Consider Contract Manufacturing Kratom Products
When choosing to hire a contract manufacturer for your own kratom products, there can be a learning curve. This is because the company you choose might have different policies that you will now need to implement and comply with, such as additional paperwork or manufacturing limitations that you’ll need to incorporate into your own business practices. Having this sort of arrangement can be very rewarding, as it can help greatly to ease the burden of a good portion of governmental oversight, particularly when it comes to manufacturing products such as kratom.
1. Control Over the Specifications
One major benefit in particular in utilizing a manufacturing service is that you’ll have control over the specification and branding of your products. While you may still have to conform to the manufacturer’s capabilities, you should have far more options available.
2. Less Upfront Costs
Manufactures already have the equipment, cleanroom, and staff to cover your needs. The benefit, in turn, is that the cost of doing business is going to be less due to all of the additional materials you will need to get started.
And let’s be honest, who doesn’t love the idea of less upfront costs?
3. Policies are Less of a Burden
When it comes to manufacturing, you can have over 100 Standard Operating Procedures ( aka SOP’s) to follow in the packaging process alone. When you have a co-packing partner, you remove nearly 85% of those processes that help to make operations a breeze. This is perhaps the biggest selling point of having a co-packer.
Many suppliers choose to do it all on their own, and simply want to keep all the processes within their own company. While there is absolutely nothing wrong with this approach, it does come with its own set of challenges and a very large book of FDA regulations.
Speaking of FDA regulations, if you’re in the industry you already know how you must abide very carefully in order to comply with their standards. As an example, according to the FDA’s website, Current Good Manufacturing Practices (CGMP’s) is described as:
Descriptions of the methods, equipment, facilities, and controls for producing processed food and dietary supplements. Following CGMPs ensures the quality of processed foods and dietary supplements. It also ensures that processed food or dietary supplements are packaged and labeled as specified in the master manufacturing record.
This is just one example of many that you’re going to have to follow to a tee in order to be successful.
Top Three Challenges New Kratom Suppliers Face
Surely it’s an exciting journey to become an entrepreneur of your very own kratom business. That said, there are also factors that every vendor should be aware of. The following examples highlight the top challenges that suppliers face, making white labeling or contract manufacturing that much more appealing:
1. International Sourcing Issues
When looking to start a kratom business, many people start out by searching for a direct source. While this may save you money, it leaves you susceptible to such atrocities as being scammed. One of the largest scams starts at the source, when many Kratom con-artists pose as kratom farmers. These scammers are flat-out searching and ready to steal your money. They will typically ask you to pay cash up front and never deliver your product. This type of fraud is very common in the industry. When purchasing domestically from a trusted company, you are far less likely to have to deal with being scammed out of your hard-earned money.
2. Becoming a Manufacturer
The perception many have with kratom is that it’s somewhat of a “wild west” product, i.e. it’s not regulated. This is simply not true; the product is in fact regulated, and suppliers should always take a responsible approach. Kratom is an herbal product that is ingested. In fact, according to the American Kratom Association (AKA), “kratom is properly classified as a food under the provisions of the U.S. Food Drug & Cosmetic Act.”
Once you come to the realization that the product is regulated, it is not only paramount to the industry, but your direct responsibility to distribute or manufacture the product in a responsible manner. Many suppliers fail to realize that when they start breaking up bulk shipments into smaller quantities, they are becoming a manufacture of herbal products. This opens the door to following the FDA’s CGMP requirements. While you still need to follow FDA regulations when purchasing white label or private label from an established, vetted manufacturer, it eliminates a lot of the steps from the manufacturing process.
3. Raising Enough Funding
Starting your own kratom business the correct way as a manufacturer can be extremely expensive. Aside from the initial cost of your product, some of the larger hidden expenses include (but are not limited to) the following; formal CGMP training, on-going lab testing, certified facilities, proper staffing, certified equipment and annual audits. These expenses are in addition to what it takes to market and run your own business effectively.
Top Extracts is proud to offer customers white label and contract manufacturing options with low minimums. All of our partners choose to use our brand not only due to our clean manufacturing processes, but also because of our commitment to selling the highest quality kratom products. To get started with Top Extracts, please fill out our wholesale contact us form. We would be honored to help, and are confident that you’ll be thankful you chose us to assist with your business endeavors.
When it comes to selecting a new partner(s), be sure to choose wisely. Always make sure they’re following proper manufacturing processes, have enough product to support your needs, and can have you up and running quickly. This will lead to a win-win for all who are involved, which will also equate to the most optimal success.