Guide
The contract with a private label manufacturer: six clauses
Updated
Most private label relationships start well and are governed by a purchase order. The clauses that matter are the ones nobody needs until the relationship changes, which it eventually does.
Who owns the formulation
If the manufacturer develops it, the default is not obviously in your favour, and a formulation developed with no written position is the standard reason a brand later finds it cannot move production.
Settle it before development starts. The conversation is straightforward then and adversarial later.
Access to the file
Whoever compiles the compliance documentation, you need access to it and you need to be able to take a copy with you.
Without it, changing manufacturer means repeating the underlying work, which is a lock-in that has nothing to do with the quality of the relationship.
Tooling and artwork
Moulds, plates and dies are paid for by somebody and owned by somebody, and those are not always the same party unless it is written down.
Artwork files are the same question in miniature and are just as annoying to lose.
Notice, and stock on termination
Notice periods both ways, so neither side can leave the other with a listing to fill and no product.
And what happens to your materials, components and finished stock held at their site if either side terminates. This is a real amount of money sitting in somebody else's warehouse.
Recall
The clause nobody negotiates and the one that decides whether a bad batch is expensive or fatal. Who pays for retrieval, disposal, customer refunds and the regulatory process.
Absent a clause, the cost falls where the law puts it, which given that the product carries your name is frequently on the brand. Negotiate it before the first run, when it is theoretical and cheap to discuss.
Start small
Size the first run so that a failure is survivable, because everything that can go wrong in a new manufacturing relationship goes wrong on the first run and that is normal.
Book the second only after the first has arrived on time, in specification, with the documentation you were promised.