How can health supplement OEM have a price advantage?

The merchant found the source factory and had the qualifications for OEM cooperation. However, after explaining his product and project needs, the quotation given by the OEM factory was unacceptable. If the formula of the products produced by the OEM is not unique and is not as advantageous as the white label products, then later promotion and sales will be difficult. So, how can health supplement OEM processing have a price advantage?

What are the costs of OEM processing of health supplements?

1. Raw materials and packaging materials: procurement costs of raw materials required for health supplement processing, packaging design and processing costs.

2. OEM process: Health supplement OEM manufacturers need to charge certain processing fees to provide processing and production services.

3. Other necessary expenses: logistics and distribution, necessary testing, etc.

If health supplement processing wants to save costs and create product price advantages, the first two aspects must be the focus. And these two aspects will have a common feature, that is, the minimum order quantity limit. There will be a corresponding minimum order quantity for purchasing packaging bottles, customized aluminum foil bags, or processing packaging boxes. If an OEM undertakes the processing task of a certain dosage form, there will also be a minimum order quantity limit for the corresponding dosage form.

What is the minimum order quantity?

The minimum order quantity is the minimum custom quantity required by the OEM for a certain product to be processed by the client. Once the quantity is less than this quantity, the factory cannot accept the order. This is a way to reduce unit product processing costs through economies of scale, and it is also a constraint for factories to ensure that starting new product production does not incur losses.

How to set the minimum order quantity for health supplement OEM?

Minimum order quantity = (GMP workshop clearance fee + necessary factory profit + tax)/unit product processing fee

In the above formula, the GMP workshop cleaning costs refer to the costs incurred by the processing plant for the necessary cleaning, disinfection and maintenance of the workshop, equipment, personnel protective gear, etc. before starting and after the production of a new product. Note that it is the maintenance cost of the workshop when switching from one product to another. The larger the single product and single production quantity, the smaller this cost will be after amortization. This is one of the characteristics of cost generation in production-oriented enterprises. At this point, you should also have a preliminary answer to how OEM health care products can gain price advantages.

How can health supplement OEM have a price advantage?

1. Control the cost of raw materials: purchase and distribute raw materials according to the requirements of health supplement processing manufacturers; reasonably customize according to the number of packaging required for production. Or directly hand over the supply of raw materials to the health supplement OEM manufacturers.

2. Reasonably design OEM orders: fully consider the inventory you can afford, refer to the minimum order quantity given by the OEM, and plan the quantity of customized processing. Especially for the model of bringing your own brand and OEMing the finished product from the factory, the processing factory will give differentiated quotations for customized quantities in different ranges.

OEM projects for medicines and foods with the same origin as traditional Chinese medicine tablets candies, solid beverages, and alternative teas, as well as health care product OEM projects such as functional foods, special diets, and health foods, must be reasonable on the premise of ensuring a reasonable supply of raw materials. Only by designing orders can we ensure product price advantages. Small batch OEM customization may not be suitable!