Private label vs contract manufacturing for cosmetics

Three terms that get mixed up

In the cosmetics industry, “private label”, “contract manufacturing” and “white label” are often used as if they meant the same thing. They don’t quite, and understanding the difference helps you read quotes and contracts.

Who owns the formula

This is the most important question, because it decides what happens if you ever change supplier.

• Private label: the formula stays with the manufacturer. You own the brand, the artwork and the relationship with your customers. If you change manufacturer, you take your brand with you but not the formula.
• Contract manufacturing with your own formula: if you bring a formula you own, it stays yours. The manufacturer produces it for you and keeps it confidential.
• Contract manufacturing with a custom formula: ownership depends on the contract. It may stay with the lab that developed it, with exclusive use for you, or be transferred to you. Get it in writing before you start.

With us, confidentiality starts before the project does: we sign a non-disclosure agreement (NDA) before receiving your information. Custom formulas can be exclusive to a single client, and exclusivity on a formula is available on request. For wholesalers and distributors, exclusivity by territory or channel can also be agreed, with conditions set case by case.

Exclusivity: when it really matters

With a catalogue formula, another brand may sell the same product under a different name. For many projects that isn’t a problem: buyers choose your brand, your packaging, your channel. It becomes a problem when:

• you sell online, where customers compare ingredients and INCI lists (the standard ingredient list printed on the label);
• you want to present a “unique” product or a specific claim, meaning a statement about what the product does;
• you sell through a channel, such as pharmacies, where the value lies in being different from what is already on the shelf.

In these cases a custom formula, or exclusivity on an existing formula, is the better choice.

Costs and timings compared

There is no single price: it depends on the product, packaging, design and quantity. But the cost items change in predictable ways between the two models.

A table to help you decide

Many brands combine the two: they launch with some ready formulas and add a custom formula once the line is selling. It is a path we see often in the projects we follow.

What stays the same in both models

The model you choose doesn’t change your legal obligations or the quality of production.

• Documents: every cosmetic sold in the European Union needs a Responsible Person, a Product Information File (PIF) and a CPNP notification. We prepare the documentation with in-house expertise and external regulatory experts, and submit the CPNP notification ourselves. For Great Britain, the UK Responsible Person and SCPN notification are arranged through our partners.
• Testing: every batch is tested by our lab and by external accredited labs, including for heavy metals, and is traceable by a code.
• Production: we work according to GMP (ISO 22716) in an ISO 9001:2015 certified plant.
• Contact: a dedicated project manager follows you through all six phases, from assessment to delivery.

Questions to ask a manufacturer

Whichever model you choose, before you sign ask the manufacturer:

• Minimum order quantity: does it apply per product, per size or per fragrance?
• Formula ownership: who owns it, and what happens if you change supplier?
• Exclusivity: is it included, for how long and in which channels or territories?
• Samples: when do they arrive and how many changes are included?
• Documents: who prepares the PIF and the label, and who submits the CPNP notification?
• Responsible Person: who acts as EU Responsible Person, and as UK Responsible Person if you sell in Great Britain?
• Reorders: with what timings and what minimums?

Clear answers are the first sign of a reliable partner.

Frequently asked questions