Things to Consider Before You Sign an OEM Contract for Your Formulation

OEM

It is notable in the business industry that the seller may be different from the original manufacturer. We come across many brands that sell the products on behalf of the owner of the product. This is where the concept of OEM comes from.

WHAT IS OEM CONTRACT?

OEM is the Original Equipment Manufacturer. It is a contract between the original manufacturer and the end seller. The end seller promotes and sells the products with his brand logo, but the design would originally belong to someone else. The seller needs to pay off the required amount to the original manufacturer for using the design. If you have a formula for skin care problems, you can sell your idea to the manufacture by charging some amount in return. The manufacturer will produce the item and sell under his brand name. 

THINGS TO CONSIDER WHILE SIGNING THE CONTRACT

There are many frauds involved in this sector. It is advisable to take precautions of such events to prevent yourself from falling under such scams. Here’s the OEM agreement checklist for you to consider before outsourcing your formula:

  • LEGAL CONTRACTS: It is always better to take your business forward in a lawful way. It is advisable to hire a lawyer and bind the OEM company contract with all the legal formalities to claim responsibility and accountability in case of fraud or scam.

 

  • PUT FORWARD YOUR THOUGHTS: Jot down all the points that you want your manufacturer to know about the product. Be clear on how you want your product to look like, work and serve the purpose. It is advisable to know about how the manufacturer is planning to showcase your product or how you want it to showcase in the market. If two ideas collide, it is better to clarify it in the first go and come up with a solution by legal compliance.

 

  • CREATE A SAMPLE: In case, you are not able to portray your thoughts accurately, you can create a sample of the same and present it to the manufacturer. This will clear things from both the ends. It is advisable to keep one original sample with you.

 

  • CLAIM YOUR INTELLECTUAL PROPERTY RIGHTS: Before signing a legal contract, make sure you clarify your intellectual property rights. You need to ensure that there are no tweaks to your original formula that would hinder your identity; the same product/formulation should go in the market for your users.

 

  • CHECK THE END DELIVERY OF YOUR PRODUCT: You must be aware of where your manufacturer is planning to sell the end product. It should meet ethical as well as quality criteria.

 

  • BE AWARE OF BAD PRODUCTS ON BEHALF OF YOUR NAME: Make sure the product going in the market is safe for usage. In case you sense any alterations in the original formula, it is advisable to claim it before it creates havoc in the market legally.

 

  • CLARIFY THE DELIVERY DETAILS: It is essential to make a written note of how and when the end product will deliver to the manufacturer. It is even advisable to keep a note of the future trades and decide how it will all work in case of bulk manufacturing.

 

  • BE CLEAR WITH YOUR MONEY: You and your manufacturer should have a pre-decided amount for using your original formula or design. Keep it all on papers to legally claim it in case of fraud or delayed payments.

If you are looking to formulate your own range of skincare or personal products, you are at the right place!

Posted in Knowledge Center, Uncategorized on February, 2019