Reflections on Business Development for Contract Manufacturing

October 01, 2019 / By Mike Austin

Contract manufacturing is a booming industry. With the rising cost of machinery and equipment, labor, and other operational expenses, more and more manufacturing firms are choosing to outsource their production to third-party companies, also called contract manufacturers. 

There are so many benefits to outsourcing production. It’s much more feasible and less expensive and has a quicker turnaround time – all thanks to an optimized production process.

Each day, contract manufacturers help businesses from around the world bring new products to the market. With such a high level of technical expertise, they can help businesses with major manufacturing aspects like product design and production.

Despite having a viable business model, contract manufacturers still struggle with communicating their selling points to companies (vendors and suppliers) that require their services. Why? And what can contract manufacturers do to promote their services and find as many clients as possible?

Technical expertise should be proven

Contract manufacturers are hired not merely because they have the means (machines and equipment) to produce a certain product. Vendors and suppliers hire them because of their technical expertise. The best contract manufacturers are those that have achieved mastery over their craft, whether it’s creating transistors or manufacturing HVAC equipment. 

Technical skills are not enough, though 

Being a technician doesn’t always go hand in hand with being a business owner or a marketer. Contract manufacturers excel in what they do. They know everything about design, machining, materials, applications, and product development. But most of them lack the skills to sell their services to other businesses. 

This significant challenge often prevents contract manufacturers from growing their business and increasing their revenues. 

Marketing for Contract Manufacturers

With over a thousand contract manufacturers in existence, effective marketing is necessary to differentiate one’s company among the rest. 

Marketing for a CM is no different from marketing any other business. While most of these marketing strategies are common sense, it takes persistent efforts to implement them and obtain great results.

If you’re starting as a contract manufacturer, here are some vital marketing techniques that you should implement:

  • Tell your story. To earn the trust of vendors and suppliers, they need to know your story. How did your company start? What are your mission and vision? What inspired you to pursue this business? 
  • Showcase your skills. Let potential clients know that you have the means and ability to deliver what is expected from you. Contract manufacturers are product innovators. Your background, skills, and knowledge will be your starting point to thrive in this industry.
  • Identify your market. You know your strengths. Now it’s time to determine what markets or customers you want to pursue. You can’t cater to all. Create your ideal customer profile and use it as a basis for finding the right partner companies.
  • Promote your business. Now, this is the tough part. To ensure success, incorporate digital marketing with your overall strategy. Speaking of online marketing, you can combine a variety of approaches - from email to social media marketing and performance marketing. 
  • Streamline your marketing. Just as you want your clients to focus on their business by taking care of their production needs, you also want to be able to focus on what you do best. Marketing can be a time-consuming process. Making use of an all-in-one marketing platform, such as Adrack, you can automate your campaigns and spend less time tracking your marketing progress and analyzing data.

OEMs need partners, not mere suppliers.

Contract manufacturing, at present, plays a crucial role in the success of OEMs. And because of that, the CM-OEM relationship has grown to be more of a business partnership. Contract manufacturers help OEMs with critical aspects like design innovation, cost management, and better supply chain management. As a partner to the OEM, you become an extension of their team. Thus, working together on sharing target costs, receiving budget quotes, and creating logistics can lead to favorable outcomes.

Contract manufacturers also help with many other aspects of product development and manufacturing, including:

  • Component manufacturing
  • Product assembly and testing
  • Volume purchasing
  • Human resource savings

For a successful partnership, it can be helpful to step back and review the scope of the project, taking into account factors like the project/production timeline, expectations, key milestones to achieve within the timeline, and the people responsible for overseeing the project.

OEMs look for contract manufacturers that have the same trust and a passion for the product as they have. Patience, perseverance, and tolerance - these are the major qualities that make good partnerships.

Proximity matters.

More and more businesses prefer contract manufacturers based in the same area or location. Proximity reduces the cost and hassle of traveling and facilitates easy communications (they can easily stop by and have face-to-face meetings). Furthermore, geographic proximity makes manufacturing outcomes and costs more predictable. While the nearest contract manufacturer might not be the cheapest one, the extra charge might be worth it.

Contract manufacturing is a booming industry. Contract manufacturers help many businesses turn their ideas into reality by providing services critical to product development and production.

But as the demand for these companies rises, so does the competition among them. Technical skills are not enough. Marketing is crucial to achieving success. Also, OEMs and contract manufacturers should maintain a solid partnership. Proximity matters too. Working with a supplier that is located in the same area as you are can also help, especially in lowering the cost.

This is a guest post. We welcome guest posts about helping manufacturers increase sales and/or advance their marketing function. Send in your idea and you too could be a guest blogger on MMG.

Guest blogger -
Mike Austin is a marketing and creative content specialist at and working in the Digital Marketing industry since 2009. As a conversion-driven marketer, he is passionate about helping businesses expand their online visibility and reach their goals.

Manufacturing Marketing Group Louisville, CO US 303-953-4361