As the social division of labor becomes more and more detailed, many companies pay more attention to the in-depth discussion of products and outsource some processes with high production costs and complicated processes. Therefore, many large brands of skin care products do not have their own production plants, and they prefer to choose cosmetics OEM processing plants to produce products.
Reduce commodity maturity costs
For cosmetics products entering the recession, reducing production costs is the key to maintain profits. If we can&＃39;t reduce production costs in China, we should look abroad, perhaps make overseas investment, perhaps carry out outsourcing OEM production. Many large cosmetics brands in Europe and the United States use overseas OEM to directly reduce the risk and cost of production in order to obtain higher profits.
Increase commodity diversity
As for single brand companies, because their brands are very well-known and have a certain customer base, OEM processing is also a shortcut to expand the development of more types of products. There is usually a gap between commodity development and market orientation. Brands can use OEM processing methods to produce products with their own commodity formula, quickly fill up the market space and seize the market. For example, a brand manufacturer is good at producing water emulsion and face cream, but lacks in facial mask. At this time, OEM processing method can be used to outside. This not only saves production time, but also reduces production costs, and can also obtain high-quality facial mask.
Show the company&＃39;s own advantages
The competitive advantage of some cosmetics brands lies not in their production, but in their various sales channels and perfect after-sales service. At this time, OEM processing cooperation is almost a win-win approach for both sides. For example, Watsons, relying on its worldwide sales channels and service networks, does not need to produce goods, but can provide a reputation for high-quality goods to win the trust of customers.
Use trial and error opportunities to reduce losses
The market is changing all the time. Some cosmetics brands often enter the market by trial and error. They will choose OEM to test the possibility of entering the market. Brands outsource their products to cosmetics OEM manufacturers for small-scale production, and then push them to the market to observe the reaction of the market. If the reaction is good, the brands can produce a large number of products, so as to launch their own new products and brands; If the response is flat, the brand dealer can also terminate the OEM contract and give up the intention of entering the market of the product, so that it can use trial and error methods to obtain more opportunities and reduce the risks it bears
