How can businesses cooperate with factories to produce a essence oil at low cost

The low-cost production of essence oil in cooperation with the factory needs to start with resource integration, process optimization and cooperation mode innovation. The following are specific strategies and steps:

1. Accurately select cooperative factories

Positioning as a small and medium-sized flexible factory: Priority should be given to factories with ODM/OEM experience, which have low minimum order quantities (such as 500-1000 bottles), flexible cooperation, and are suitable for start-up brands.

Principle of proximity: Choose factories that are close to the raw material production areas (such as Yunnan rose essential oil production area, Xinjiang lavender base) to reduce raw material transportation costs.

Shared production capacity model: Negotiate with factories on off-season production schedules or share production lines to utilize idle factory capacity to reduce costs.

2. Raw material cost control

Simplified basic formula:

Replace high priced oils such as rosehip oil and seabuckthorn oil with cost-effective base oils such as jojoba oil and sweet almond oil.

Reduce the types of active ingredients (such as retaining only 2-3 core active ingredients) and avoid excessive stacking.

Centralized procurement of raw materials:

Collaborate with other merchants to "purchase bulk raw materials" (such as hyaluronic acid and vitamin E) through joint orders, and strive for wholesale prices.

Choose domestically produced affordable raw materials (such as domestic centella asiatica extract replacing imported raw materials).

3. Minimize production input

Reduce minimum order quantity:

Negotiate with the factory for "phased production": the first order will produce 500 bottles for trial sales, and subsequent orders will be added based on sales volume.

Adopting the "pre-sale+on-demand production" model, production is driven by e-commerce pre-sale data to avoid inventory backlog.

Lightweight packaging:

Use universal glass bottles/dropper bottles (no need for custom molds), and label with simple stickers instead of hot stamping process.

Simplify packaging hierarchy: Cancel the outer box and directly use shrink wrap+express box for shipping (suitable for e-commerce channels).

4. Flexible cooperation mode

ODM mode (OEM):

Directly using mature factory formulas (saving research and development costs), only adjusting fragrance or packaging design.

Case reference: a domestic essence oil brand adopts the existing "squalane+vitamin E" formula of the factory, and the production cost of a single bottle is reduced to less than 8 yuan.

Sharing cooperation:

Agree with the factory on a "low down payment+later sales share" to reduce the initial financial pressure (such as a 30% down payment and the remaining settlement based on sales volume).

Light asset OEM:

Entrust the factory to complete the entire process of filling, testing, and filing, saving the cost of self built production lines and quality inspection teams.

5. Supply chain optimization

Integration of raw materials and production:

Choose factories with their own raw material supply chain (such as Yunnan factory directly supplying rose essential oil) to reduce middlemen's markup.

Logistics cost control:

Require the factory to ship directly to the e-commerce cloud warehouse or to ship on behalf of others to avoid secondary transportation.

Adopting "multi batch small batch" shipping to match the real-time replenishment needs of e-commerce platforms.

6. Quality Control and Compliance

Basic Quality Inspection Agreement:

Clearly require the factory to provide COA (Composition Analysis Report) for raw materials and microbiological testing report for finished products.

The upper limit of defect rate (such as ≤ 0.5%) is set, and the factory shall bear the excess damage.

Low cost filing plan:

Choose 'ordinary cosmetics filing' (non special purpose) to reduce testing project costs.

Sharing existing similar product formulas with the factory saves filing time and costs.

Case reference: low-cost essence oil production plan

Formula: jojoba oil (60%)+vitamin E (5%)+tea tree essential oil (2%)+simple emulsification system.

Packaging: 30ml brown glass bottle with white sticker label (single bottle packaging cost<2 yuan="">

Cost structure: Raw material 4 yuan/bottle+packaging material 2 yuan+processing fee 3 yuan=comprehensive cost 9 yuan/bottle (compared to market price of 50-80 yuan products).

keynote

Risk avoidance: Clearly define intellectual property ownership and quality accountability clauses when signing contracts.

Long term cooperation: In the initial stage, factory response speed and quality stability can be tested through small orders, gradually establishing long-term cooperation trust.

Through the above strategies, the comprehensive cost of essence oil production can be reduced by 30% -50%, while maintaining the basic quality, which is suitable for start-up brands with limited budgets to quickly enter the market.