CONTRACT

MANUFACTURING
What is Contract Manufacturing?
• Contract manufacturing is a type of outsourcing that companies use, which involves hiring a
manufacturer to create products. A contract manufacturer may take part in various stages of
production, including design, manufacturing and shipping, depending on the needs of their client.
• The company that hires the contract manufacturers can provide production details, which include
the total amount of product they need, the production deadline and quality assurance standards
to follow. Contract manufacturers have the International Organization for Standardization (ISO)
certification, which is a certification that qualifies companies to follow standards for product
manufacturing and quality assurance guidelines.
How does Contract Manufacturing Work?
• Typically, a company hires a contract manufacturer and provides their
expectations and guidelines for their products. They may work with
the manufacturer to design a product idea, or they can provide a
prototype, sample or outline for the product. The manufacturer
usually creates a test product to ensure it meets quality standards.
• Once the manufacturer finishes manufacturing the products, they
send the items to the hiring company, so that they can ship them out
to customers. Contract manufacturers sometimes use dropshipping,
which involves sending the product directly to the customer, rather
than sending the product to the company first.