What to Look for in a Co-Packer Before You Hire
Originally Posted On: https://fleetchem.com/what-to-look-for-in-a-co-packer-before-you-hire/
When 23 percent of businesses fail because they don’t have the right team it’s so important that you partner with the right co-packer. Form a team that can deliver business success.
Have you decided your business is ready to hire a co-packer? Make sure you take a look at this guide to learn what to look for in a co-packer first.
What is a Co-Packer?
A co-packer is a business that manufactures and packages your product for you. The product remains yours, with your branding. Sometimes called contract packaging the co-packing business enables you to offer products to the market without having an industrial manufacturing or packaging operation.
This approach can equally be taken by a small business or a large one. A small business may wish to scale up. A large business may choose not to own their own manufacturing capability.
Both these businesses can find benefits from partnering with a co-packer.
Why Use a Co-Packer?
If your business is growing it’s not always easy to keep up with demand. Scaling up production involves capital investment in equipment and premises both for manufacture and packaging. A co-packer is one way of gaining scale with no capital outlay.
Achieving scale may be a means of gaining a competitive advantage. With scale, comes economies. Reducing your unit costs even with third-party manufacturing and packaging could be what you need to have a successful product.
If your expertise is in branding or sales you may wish to concentrate on these rather than on manufacture. Finding a partner that can complement your business strengths leaves you free to excel at what you are good at.
Sometimes, your product needs specialized manufacturing or packaging expertise. These technical aspects of manufacturing can sometimes be highly regulated. This leaves you open to reputational risk and potential litigation.
Examples of the industries affected by this are pharmaceuticals, food, and cosmetics. Better to leave the problem of adherence to regulation to the expert co-packer and concentrate on other things.
So, how do you select a co-packer to meet your needs?
Ask other people in your industry and network for referrals. An independent referral is a very powerful indicator that a co-packer is a credible option. Do check that the referral is from a business with comparable needs and expectations.
If you don’t know people who can provide a referral, seek out people who can. Extending your network may be a useful resource in any event. Join trade organizations and attend shows and conferences.
There are sometimes reviews of organizations available online. Check Google business reviews but be careful to ensure that they appear independent. It is possible for unscrupulous businesses to create their own good reviews so try to verify any reviews you want to rely on.
Ask prospective co-packers to provide reviews and then follow them up. Speak to the co-packers existing non-competitive clients can provide insights especially if you offer confidentiality to the client. It may be that they are experiencing problems but would not want to go public with them.
Attitude to Quality
Ask every co-packer you are considering about their quality assurance processes. Your aim here is to establish that they have a mature quality culture not just some quality control checks in place.
Examples of quality checks are easy to demonstrate. A culture of quality assurance means that everybody in the business is concerned with delivering quality. Ask to talk to a range of people including front line staff, administration staff, and others.
The front-line staff will be the people who make sure that your product manufacturing and packaging is right for you and your customers. Don’t accept management assurances. Spend time listening to people and observing how they work.
It’s important that any co-packer you contract with is able to meet your capacity needs. Try to be clear about your needs and check that the co-packer can fulfill them with some tolerance for increases in demand.
Identify forecasts and growth plans for your product. Will the co-packer be able to meet these expectations if you need them to? How much notice will they need to respond to an increase in demand?
A co-packer who can’t meet future demand may be a short terms solution but not right for the future. The cost of researching a new co-packer and switching can offset the potential benefits of growth. Think ahead to be sustainable.
Standards of Communication
A co-packer relationship needs to be a partnership. This is a relationship where both parties benefit from the success of the venture. Effective communication is a key strength you both need to make it work.
As you research a potential co-packer, check their communication effectiveness. How quick are their responses to email? Is their communication full and accurate?
Find opportunities to communicate with the people who will be your regular contacts if you contract with them. The people who are selling you the co-packers service may not be the people you deal with once you are working with the co-packer. Get to know the people who will be partnering with you.
Credibility and Trust
A partnership needs credibility and trust. Do the co-packers demonstrate credibility? Can you trust their promises?
Challenge overblown claims and unrealistic promises. Ask for evidence and examples wherever possible. Check their claims about service levels and quality with their existing clients.
A co-packer is part of the team that is delivering your brand to your customers. It’s important that they share your values as well as have the commercial capability you need. A good cultural fit means they will be able to work with your team and you.
Ask them about how they treat their people. Find out from their clients about how disputes have been resolved and how problems have been overcome. Do the answers fit with your own approach.
Right Business Model
Check the commercial basis for the co-packer’s service. Do the numbers stack up so you can both make the money you need from the business arrangement. Be clear about what the service will cost you and how the costs might change if the volumes increase or decrease.
Do Your Research
Choosing a co-packer is not something to do lightly. Be rigorous in your research. The right co-packing partner can help you achieve your business dreams.
To talk about your co-packaging needs, call us.