Creating your own fragrance line is challenging as there are many areas to consider. Some of the significant aspects one normally considers is the manufacturer’s reputation and innovation capability to more sophisticated aspects such as the different fragrance compositions they offer. For example, if you would like to marry a new, natural, organic or synthetic scent with your brand, the manufacturing company you choose would have to have many decades of fragrance creation experience blending fragrance with products, product lines, fine fragrances and more. Therefore, to make sure that you choose the perfect manufacturer for your fragrance line, there are several things that are important to consider:
- A manufacturer that will produce a product unique to your requirement
- A white-label manufacturer who produces their own products but allows other companies to rebrand and sell them as their own. These in some scenarios may also be suppliers, wholesalers or distributors.
- A manufacturer who is also a drop shipper, ready to fulfil orders from their warehouse so the retailer does not need to hold inventory.
Domestic vs overseas manufacturer
Taking into consideration manufactures that are overseas and domestic is significant in this process as they both have their benefits and limitations.
Advantages of working with a domestic manufacturer
- Typically, easier to communicate, and accessible if face to face meetings or site inspections are required.
- Quicker delivery times.
- Intellectual property rights are protected by international law.
- There is greater security and recourse when it comes to payment.
- Recently, UAE has become more desirable from a consumer’s point of view so purchasing products with UAE manufacturers has increased value.
- UAE has become more heavily regulated in terms of manufacturing perfumes and therefore it is straightforward to identify reputable manufacturers.
Disadvantages of working with a domestic manufacturer
- Manufacturing costs can be high – labor and production costs.
- Restricted product choice. Some products may not be manufactured locally.
- Depending on the country of residence, the quality might not be as expected.
Advantages of working with an overseas manufacturer
- Reduced manufacturing costs. Manufacturing a product overseas is typically less expensive than manufacturing it domestically, however, it mostly depends on the country you reside in.
- Greater variability, with a higher number of manufacturers to pick from.
- Easy to find. International manufacturers can be found with very little effort using well-known platforms such as Alibaba.
- High-volume capability. International manufacturers are often equipped to efficiently produce high volume orders in a single production round.
Disadvantages of working with an overseas manufacturer
- Perceived inferior quality manufacturing by customers.
- Less secure intellectual property rights. Without the stringent protections of U.S. and EU intellectual property laws, it’s more likely (though still uncommon) that your idea could be stolen.
- Difficult and expensive to verify a manufacturer and visit if a meeting is necessary.
- Longer shipping time, and increased shipping costs. When products intended for domestic sale are manufactured overseas, the cost of shipping them back to the original country can often override any savings made from the reduced manufacturing expense.
- Less protection for payments and little recourse.
- Cultural differences. Cultural norms may be difficult to navigate in business practice and language barriers may complicate communication.
- Limited oversight. Without hiring a third party or making a trip to the facilities, there’s no way to keep an eye on how the facilities are run or to witness the production of your product.
- Product importation and customs clearance. However, experienced overseas manufacturers may have the necessary knowledge to help their customer mitigate domestic costs.
- Exposed to currency fluctuations. For instance, if your company is based in a country with a weak currency compared to overseas regions, it would be cheaper to source materials locally.
How to search for a manufacturer:
The hardest part of finding the best fitting manufacturer for your company is obviously actually searching for the manufacturer. However, there are many methods in which you can search, especially online as there are plenty resources available. Some of them are:
- Online directories are one of the best resource as it is easy to use and also free. These online directories list all the manufacturers different companies use around the world. Examples of such directories that source overseas and domestic manufacturers are Alibaba, Sourcify, eWorldTrade and Kompass.
- Online search is another obvious and easy method to find manufacturers as you could search that on Google and get lists straightaway. However, this method would cost you a lot of times despite giving you numerous results, but it could be all worth it if you end up finding a good manufacturer.
- Attending events and exhibitions is a more exciting and interesting way to meet manufacturers. This would give you a more in-depth insight of the products and services the manufacturers offer as there is value in connecting face-to-face with a potential manufacturer. For instance, Beautyworld Middle East is hosts over 1,800 exhibitors and 40,000 visitors from the B2B beauty industry in Dubai over three days. Furthermore, attending exhibitions would allow you to meet new people in the industry and form relationships with professionals that would help in the future.
- Visiting well known perfume shops in your area and scanning for manufacturer details on the product labels.
Requesting a quote
The next step is contacting all the perfume companies you have listed down after the intense research. In order to follow through this process smoothly, gather all questions and objectives that will help you get all the information you need. The key objectives to consider would be the sample pricing, minimum order quantity, production pricing, turnaround time and payment terms.
Evaluate bid submissions
After you have gathered all the essential details and information from you preferred manufacturer, evaluate each one of them to see which one is best for your specific criteria. They would usually provide design samples for evaluation to confirm if the fragrance and design are as per your expectation. The ultimate evaluation is deciding on each criteria’s importance and score all submissions against this for an objective method of evaluation. Furthermore, asking for an agreement or a contract with a potential manufacturer would make the process easier so that it doesn’t harm the business in any way in the future.
Negotiating Minimum Order Quantities
It is likely your preferred manufacturer will ask you to commit to a specific number of units for your first order. As a start-up entrepreneur this can be sometimes difficult as it typically requires a financial commitment at a time when the business has limited funds. However, most reasonable manufacturers are open to negotiation on a minimum order commitment.
Treat this relationship with your new manufacturer as a long-term partnership and understand there is risk on their side also. Before you negotiate, consider why the manufacturer has imposed a minimum order. Is there significant work upfront? Do they have a prior commitment to larger customers? Knowing the reasons behind a minimum order value will put you in a better position to negotiate and propose alternative solutions. Counter offers can range from paying a higher unit cost for a smaller order to suggesting a deposit for a larger order.
As a buyer it is preferable to have the written agreement drawn up from the purchaser side, however many established manufacturers will have their own contract templates prepared. Written agreements document all the specific details, such as what you want, what you’ll get, how much you’ll pay and when it will arrive.
Contract agreements cover such issues as:
- Supply conditions, including volume, price, discounts, ordering periods, take or pay and delivery times.
- Payment terms.
- Specifications of goods or services supplied.
- Warranty periods for defective goods or services.
- Limited liability; to cover situations where there is risk of loss or damage.
- Intellectual property.
- Dispute resolution.
- Termination and exclusion clauses.
- It is advisable that an experienced lawyer reviews any documents or contracts before the final agreement is signed, and operations start.
Sometimes even the most reliable manufacturer can make a mistake. Ensure you are assigned an account manager or have a direct point of contact within the company for any urgent issues. It is advisable to have regular performance reviews as the relationship progresses. This will help both parties share feedback on the progress and ensure both parties are fulfilling their obligations. It will also ensure there are no major surprises when it comes to contract renewal.
Start your Journey here
Samawa is a manufacturer and retailer of perfumery products in Dubai that has a reliable certified manufacturing process that produces high quality fragrances and designs to satisfy your customers. Samawa can also fulfill orders for individuals who don’t have the facility to hold inventory and don’t have a business license themselves. If you wish to manufacture a small quantity to start or test your business idea, you are at the right place. Please enter your contact details here and we will give you a call back.