What is third Party Manufacturing? How to start Ayurvedic Marketing Company through Third Party/Contract Manufacturing?

Previously we have discussed about starting ayurvedic company. In this article, we are going to discuss one major step of starting ayurvedic marketing company i.e Third party manufacturing/Contract Manufacturing.

After completing all processes and procedure for ayurvedic marketing company, next most important work is to find an Ayurvedic Manufacturer who provides third party and contract manufacturing services.

If you want manufactured by name of your own company without own manufacturing unit then you can go with loan licensing but loan licensing is complicated process so in starting third party manufacturing and contract manufacturing is best suitable option for you...

What is third Party Manufacturing?

A third party manufacturing is a process of manufacturing of Company ‘A’ products from Company ‘B’ manufacturing unit. Where Company A is marketing firm/Company and Company B is manufacturing firm/Company.

Products will show marketed by address of Company A and manufactured by address of Company B.

How to search for third party/contract manufacturer?

You can search for third party manufacturer through search engines like google, yahoo, bing etc or find out through B2B portals. Ayurvedic Third party manufacturing companies also give advertisement in health and medical newspapers, books etc. You can get contact information from there and contact them.

How to Finalize Third Party Manufacturer?

You should at least contact 4-5 ayurvedic manufacturers and send them quotations of products, you want to launch in the market. Receive rates and other term and conditions.

Compare rates of all manufacturers. Rates are not a single thing to consider. Quality plays major role in establishment of any product. So you take care of quality aspect as compare to rate’s aspect. You should also consider certification of company like GMP certified, ISO etc. Do some research about market reputation of manufacturer, you are going to connect.

What is Next Step?

Next step is to make an agreement with third party or contract manufacturer which you have finalized. Discuss all term and conditions, payment terms, delivery terms etc.

What will be Payment Terms and Conditions?

Most of manufacturers take 25-30% as initial investment and remaining payment against Performa invoice after manufacturing of finished goods.

What will be delivery time?

For new product delivery time will be approximately 25-35 days but it also depends at manufacturing company policy. Some companies could provide finished goods at 15-20 days and some could take up to 40 days.

Manufacturing Process:

This process is mainly done by the manufacturing unit. If marketing company wants then designing and packaging material procurement could be done by marketing company also. But if you are new in third party manufacturing and don’t have good links with packaging suppliers then leave this process also to the manufacturers. This process contains basic manufacturing processes like
  • Designing of your brand’s packaging 
  • Products Approval if any 
  • Packaging material procurement
  • Raw material procurement 
  • Miscellaneous works 
  • Finished Goods manufacturing 
  • Material ready to dispatch 
After completion of manufacturing process, Performa Invoice is raised against actual quantity of material is manufactured. Suppose you ordered for 500 Boxes but in actually that could be 490, 495, 505 etc. Certain charges like cylinder charges, packaging material security, and miscellaneous charges will be added in invoice.

Pay balanced payment. Material will be dispatched to marketing company place through discussed way of transportation like transport, logistic, courier or by own self etc.

Here third party manufacturing and contract manufacturing process finished

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