As a growing personal care or beauty business makes its choices, one choice becomes increasingly difficult to sidestep: do you construct your own factory, or do you have someone else build it for you?
This isn’t merely a matter of machines and products. It’s a choice that can break or make your entire business model. OEM vs. In-house Manufacturing will impact your cost, your time to market, and your ability to pivot quickly to customer requirements. For most companies, particularly new startups and expanding companies, this will be the difference between success and failure.
Here, we will deconstruct the differences between these two models, discuss what they actually mean to your business, and discuss why using the services of a professional OEM manufacturer like LocRoyal can be the most appropriate option for your expansion.
We shall start by looking at the underlying problem that drives brands to this critical decision.
The Manufacturing Crossroads: Scaling vs. Control
You’ve spent time building your brand, creating products, and gaining loyal customers. Now demand is on the rise. Maybe your current factory building is too small anymore, or maybe you’re finding it difficult to move new products to market quickly enough. Pressure is building.
What does one do?
One is to do it yourself in your own factory. The other is to outsource it to a professional OEM or ODM factory that already has the equipment, staff, and experience to do it for you.
This is where the OEM vs. In-house Manufacturing dilemma becomes a reality. It is not about taste. It is about what your brand needs the most — speed, control, flexibility, or cost-effectiveness.
For us to make the most appropriate decision, let’s compare these two models.
Fundamental Comparison: OEM/ODM and In-house Production
The easiest way to find out what model is best for you is to look at those three most critical areas that concern you the most: cost, time, and flexibility. These are the three areas that have the most direct influence on how fast you can scale and how much you can afford.
Cost: Heavy Investment vs. Pay-as-You-Go
Starting with cost, it’s quite clear that it’s a huge capital expense to do it yourself. You’ll have to buy or lease a building, buy top-of-the-line equipment, hire and train workers, and pay ongoing expenses like maintenance, utilities, and quality control.
This is what they call asset-heavy. It is time and capital-intensive, and it usually carries long-term risk. If your demand for the product evaporates overnight, you are still paying for the factory and all the equipment within.
On the flip side, OEM production is asset-light. In other words, you don’t own the plant or the equipment. You just pay for the products you need when you need them. That gives you a whole lot more control over your cash flow, and you can turn production up or down as the market demands.
This disparity in the cost profile can be a boon for startups and small brands.
Time: Slow Setup vs. Fast Market Entry
The second is time. It is an extremely long period of time to set up in-house manufacturing. From the moment you start planning until the moment that you are operating at full capacity, it could be one to two years. That is to design the plant, get permits, buy equipment, hire employees, and test the works.
While that is happening, OEM manufacturers are already in operation. After you finalize your design and formula, your own production can start within three to six months. That quick turnaround enables your company to react more rapidly to trends, seasonal demand, or competition.
When the beauty world is on the go, time equals money. And this is where OEM vs. In-house Manufacturing reveals one of its most apparent differences.
Flexibility: Fixed Processes vs. Agile Scaling
And now, let’s talk about flexibility.
When you’re your own factory, you call the shots — but you’re committed. You put in equipment for some products, and that tends to be slow and expensive to shift. You may require new equipment, more staff, or even extra space if your demand changes.
In contrast, OEM manufacturers are flexible. They produce for numerous different brands, so they’re always shifting to fit changing formulas, package sizes, and order volumes. They can ramp up your production when orders are good and shut it down when orders are low. That kind of flexibility is hard to do on your own.
Therefore, if your company is still in the process of being developed or is testing products, the flexibility of OEM can provide you with more room to experiment and learn without significant risks.
Since we have discussed cost, time, and flexibility, the question remains: what kind of brand should become in-house, and what kind should use OEM?
Which Way is Best for Your Brand?
Not all brands are equal in purpose or methodology. There are some large corporations, well-established and all about being in total control. There are others that are small, moving fast, and trying to make their mark. Having a little idea of where your brand is can help make the right choice between OEM vs. In-house Manufacturing.
In-House Production: For Large Corporations with Unique Needs
It is not everybody’s affair to own a factory. It is worth it for companies that have:
- Combined financial resources
- A requirement for total production control
- Proprietary or highly sensitive recipes
- A master plan to produce in bulk
These are usually large companies with established supply chains and a pre-existing desire to keep trade secrets.
But even for them, the duties and the expenses are onerous. Maintenance, quality control, labor regulations, and training are some of the ongoing headaches that they have to deal with.
OEM/ODM: For Startups and Brands That Want to Grow
For the majority of startup beauty firms, OEM is the savvy option. Here’s why:
- You don’t have the initial cost of constructing a factory
- You can launch faster and test more products.
- You are dedicated to customer experience, marketing, and branding.
- You can scale up or scale down production without extended lead times.
If your goal is to build a robust, nimble brand that can quickly shift in the marketplace, OEM is almost always the better option.
But not all OEMs are equal when it comes to quality and support. And that brings us to the most important question: whom do you desire to partner with?
Why LocRoyal OEM Is the Smart Option for New Brands
When you go about choosing an OEM partner, you don’t require a factory. You require someone who understands your vision, is passionate about your brand, and is capable of creating something you are proud to provide.
That is why LocRoyal is the ideal option for beauty firms that want to scale.
Established Quality and Speed Infrastructure
LocRoyal already possesses production systems your brand needs. From cutting-edge equipment to experienced technicians, it’s poised to deliver quality, consistency, and velocity.
That is, you have:
- Consistent product quality
- Effective delivery
- Fewer surprises and production delays
You can count on us to provide exactly what you’ve ordered — and have it when you need it.
Complete Service OEM from Concept to Delivery
You will not have to work with several vendors with LocRoyal. We offer a complete OEM solution:
- Product creation
- Packaging design
- Filling and labeling
- Shipping and logistics
This one-stop-shop solution simplifies your process, saves you time, and reduces risk. Rolling out your first product or expanding your line, we make it easier.
Cost Benefits Through Scale and Efficiency
Since we have so many customers, we buy raw materials and packaging in bulk. That allows us to pass the savings on to you. You pay lower prices without sacrificing quality. That is one of the most compelling advantages of having a professional OEM partner.
A Partner Who Believes in Your Success
LocRoyal doesn’t only create your products. We represent your brand.
From assisting you in reacting to trends in the marketplace to providing insight into consumer preferences and packaging, we’re here to assist you in expanding. Our staff becomes an extension of your staff, providing knowledge, communication, and commitment every step of the way.
Conclusion
OEM vs. In-house Manufacturing is a decision based on where you are now — and where you would like to be.
If you’re a large firm with deep pockets and a hunger for absolute control, building your own factory may be the route to take. But for most brands, especially in beauty and personal care, OEM is the faster, more agile, and cheaper route.
OEM enables you to focus on developing your brand while experts manufacture. It lessens your risk, enables you to respond to market fluctuations, and enables you to innovate.
LocRoyal is ready to assist you in making that jump. We provide the expertise, facilities, and collaboration you require to drive your brand forward — faster and smarter.
Ready to Scale with Confidence? Contact us today for a free consultation and learn how LocRoyal’s OEM solutions can help you build your brand. From introducing your first product to expanding your product line, we are here to help you succeed. Visit us at LocRoyalHaircare.com for more or contact us at your convenience.
