The difference between Private Label and Contract Manufacturing (OEM)

You want to create a skincare brand but you are not sure what manufacturing service is right for you: private label or contract manufacturing. While the result of both processes is the same, to produce quality skincare products that your customers will love and purchase, there are key differences between private label manufacturing and contract manufacturing. 

We will highlight the differences between the two processes in this article, so you can determine what type of third-party skincare manufacturing is right for you.


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What is the Difference between Skincare Private Label and Contract Manufacturing?

Private Label Skincare – Choose from existing formulas & put your label on it.
Suitable for: start-up brands, spa & salon owners

Private Label manufacturing means you pick an existing formula and stock container and you put your brand logo on the label. You don’t own the formula but you have the right to sell it. 

The benefit of private label on the other hand, is low minimum order quantities and fast turn-around times, sometimes allowing for lower start-up costs. Private label skincare manufacturer is especially suitable for start-up brands, spa & salon owners as well as companies that want to expand their product offering with a skincare line. 

The downside to this process is that you are dependent on the manufacturer’s “product library” and cannot make alterations to the formulation (like fragrance or color). It is also possible that there may be similar products on the market, albeit branded under a different name. Do your research ahead of time to make sure you can differentiate yourself from your competitors. 

Key Points:
+ Shorter turn-around times
+ Smaller lot sizes (MOQs)
+ Lower start-up costs
- Risk of similar products on market
- Dependent on manufacturers’ product selection / no customization possible
- Formulas not based on current market trends

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Skincare Contract Manufacturing (OEM) – develop custom formulas and packaging.
Suitable for:
brands and companies with established distribution channels

OEM, or contract or co-manufacturing, stands for original equipment manufacturer, which is a company that produces parts, equipment or products that may be marketed by another company.

The advantage of using a contract skincare manufacturer is uniqueness. You can co-develop the formula and source the ideal packaging for your skincare product. This means that you can create a product that is entirely unique to your brand and you have more possibilities to set yourself apart from what’s already on the market. 

On the other hand, OEM manufacturing means higher order quantities (usually starting around 5,000-10,000 units) and longer lead times due to product development, which starts with formulation and stability testing and ends with packaging selection, art design, and filling.

Contact manufacturing is more suitable for brands and big companies with established distribution and sales channels, that want to launch a new, unique product to the market.

Key Points: 

+ Tailored / unique products and packaging
+ Ownership over formula
+ Better scalability
- Higher lot sizes
- Longer lead times
- Not suitable for start-up brands

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Ironwood Contract (OEM) Manufacturing – How It Works

At Ironwood, we specialize in turnkey personal care contract manufacturing (OEM). 

We offer full-service product development, packaging sourcing, ordering raw materials and production, so you can concentrate on what you do best – growing your business! Our dedicated team of professionals manages every aspect of your product’s development and manufacturing process. 

We emphasize in product quality, sustainability and efficiency, while keeping up to date with the latest market trends, regulations and advancements in product development.   

With 30 years of experience serving top skincare brands across the world, our company has successfully developed and manufactured hundreds of skincare products sold in more than 50  countries. 

Do you have a concept or need advice on how to launch a skincare line? 

Contact us today for more information about our process and services!


450 - 3771 Jacombs Road, Richmond, BC

V6V 2L9, Canada



30+ years of quality sourcing & personal care manufacturing

Since 1989, Ironwood is the world’s leading supplier of Glacial Oceanic Clay and OEM manufacturer of clay-based products, based in Vancouver Canada.

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