Dumb Brands Do This

Ok. I’m back. And will likely lose a lot of brands here, but I’m tired of seeing growing brands being misled by dumb and outdated B2B tactics.

Before that, let me introduce you to a recently added copacker to the Comanufactured directory: 

Now, back to not being dumb. 

If you’re lucky enough to own a CPG brand that is starting to scale, it can be tempting to squeeze every penny out of your copackers pocket. 

I’ve worked in procurement for 14 years. I’ve saved companies over $15M in my time. I could’ve saved way more cash, but I used to be dumb. 

Here’s what I would do. 

The product started taking off. The forecasts were amazing.

I felt like a badass.

I’d share these forecasts with our copacking partners. They’d come back with costs. I’d say something along the lines of, “Given our growth, the costs need to be better, we expected at least…[insert an uneducated cost]” 

Guess what? 

Half of the time they’d come back and match my cost and I’d look like a hero. Half of the time they couldn’t meet that cost. So I would find a copacker that could, and I’d still look like a hero. 

That was until the copacker would come back with a cost increase, and I couldn’t fight it. 

Or the copacker would keep pushing our production back despite giving them incredible volume. 

Or communication would fall through the cracks and I’d have to follow up every day on simple requests.

Then I’d have to find a new copacker. Then, another one. And finally, one more. 

What was happening? 

I was becoming deprioritized because I was a pain in the ass. A Major Payne.

Imagine being the copacker? You have a 1 million unit order every month, and you only make a few pennies in profit on these orders. Your production is tied up and can’t run more profitable, yet smaller brands. 

I was quietly being offboarded as a customer. And rightfully so. 

The copacker would rather have a 50k unit order where they make a few dollars instead of a 1M unit order where they make a few pennies. That’s not just copacker math. That’s smart math.

You’d take the 50k unit order. I’d take the 50k unit order. They’d take the 50k unit order—10 times out of 10. 

Once I realized this, I changed my approach. I did a deeper analysis of what our products should cost. I shared this cost with copackers. I started talking to the copackers about their ideal margins. We would talk about what mattered in business.

Cash Money. 

If I could afford to have our product made at a cost that made sense for the copackers margin, why wouldn’t I do that? 

Magic & miracles happen in business when everyone wins.

Thanks for reading! I’m here for the love and hate.

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