Episode 010 tackles a key question for entrepreneurs and manufacturers alike: Is it time to use contract packagers or co-packers? Stephen Peterson breaks down the decision-making process, helping listeners understand when outsourcing makes sense and how to structure agreements for long-term success.

Key Insights:

• When to use them: Ideal for startups or new product launches where demand is uncertain and you don’t want to tie up cash in equipment or facilities. Co-packers can handle everything from specialized packaging to fulfillment, letting you focus on marketing and sales.

• Why to use them: They bring expertise, compliance (FDA, EPA, food safety, etc.), and efficiency. Their buying power and experience in packaging design often lower overall costs while ensuring quality.

• Cost models: Decide whether to use a cost-plus model (detailed bill of materials plus agreed margin) or a flat fee per unit/day. Cost-plus offers more transparency and opportunities to share in savings as volume grows.

• Bill of Materials (BOM): Always request a detailed BOM. This clarity helps you understand where costs are coming from and how you can strategically reduce them—whether through packaging choices, volume discounts, or labor efficiencies.

• Storage as a tool: Don’t overlook warehousing as a negotiation point. Free or extended storage terms can create meaningful savings without asking the co-packer to cut into their margins.

Stephen’s bottom line: Using co-packers strategically can accelerate growth, protect your cash, and give you flexibility—provided you go in with clear expectations, written agreements, and a focus on win-win outcomes.

📬 Questions or ready to take your next step? Visit the “Work With Me” tab at findyoursource.pro to connect with Stephen directly.