Manufacturing
OEM vs ODM vs private label skincare
What OEM, ODM and private label mean in skincare manufacturing, how they differ in formula ownership, customisation, speed and cost, and how to choose a route.
In skincare manufacturing, OEM (original equipment manufacturing) means a manufacturer produces a product to the brand's specification, usually from a formulation developed for that brand. ODM (original design manufacturing) means the manufacturer supplies a product it designed itself for brands to sell. Private label is the retail form of ODM: a ready formulation sold under the brand's name, often with adaptations to fragrance, colour, texture and packaging. OEM gives the most differentiation and takes longer; private label is faster and cheaper to start.
The three models
OEM: original equipment manufacturing. The brand specifies the product; the manufacturer makes it. In skincare, OEM usually means the manufacturer develops a formulation to the brand’s brief (custom formulation), or reproduces a formula the brand supplies, then produces, packs and labels it. The brand’s specification defines the product; the manufacturer’s expertise makes it manufacturable.
ODM: original design manufacturing. The manufacturer designs and develops products on its own account and offers them to brands, which sell them under their names. The manufacturer owns the formulation and may offer it to several brands.
Private label. The retail-facing term for ODM: an existing, tested formulation from the manufacturer’s range, sold under the brand’s name, usually with some adaptation. “White label” is the strict version with no adaptation; in practice most private label products are adapted at least in fragrance, packaging and branding (private label skincare).
Side by side
| Factor | OEM (custom formulation) | ODM / private label (ready formulation) |
|---|---|---|
| Where the formula comes from | Developed for your brand from a brief, or your own formula | The manufacturer’s existing range |
| Formula ownership | Agreed in contract; exclusivity possible | Manufacturer’s; may be used by other brands |
| Customisation | High: actives, base, texture, attributes, claims | Fragrance, colour, texture within limits, packaging, branding |
| Differentiation | High | Through adaptation and brand |
| Development time | Longer: sampling rounds and stability testing | Shorter: formulation exists and has been tested |
| Development cost | Higher | Lower |
| Typical use | Hero products, differentiated brands, clinic protocols | Launch ranges, essentials, market tests, range fillers |
| Regulatory responsibility (Singapore) | The brand notifies the product and holds the product information file; the manufacturer makes it under GMP | Same |
How the models work at Celcode
Celcode offers both routes from one Singapore site, and most projects combine them:
- Custom formulation (OEM). Celcode’s in-house chemists develop the formulation through a five-stage process, sample it with you, test it for stability and check it against regulatory requirements before production.
- Ready formulations (private label). A range of approved formulations developed in Celcode’s laboratory, adapted to your brand and manufactured under your name.
- Manufacturing for both routes runs under the same HSA GMP-certified quality system, with packaging and regulatory documentation in the same project.
The skincare OEM manufacturing page describes the full service.
Choosing a route
Ask four questions:
- How differentiated does this product need to be? A hero product that carries the brand’s story usually justifies custom formulation; a cleanser or body lotion that completes a routine usually does not.
- How fast do you need to launch? A ready formulation with existing packaging is the fastest route; custom development adds months of sampling and testing.
- What is the development budget? Custom formulation carries development and testing costs on top of unit costs.
- Do you need exclusivity? Only a custom formulation can be exclusive. If exclusivity matters, agree ownership before development starts.
A common pattern: launch with private label essentials, learn from customers, then invest in a custom hero product with the same manufacturer so the range stays consistent.
Responsibilities in every model
Whichever route you choose, in Singapore the company that places a cosmetic product on the market notifies it to the Health Sciences Authority, keeps the product information file and is responsible for the product’s claims and safety on the market. The manufacturer is responsible for manufacturing under a controlled quality system, and a GMP-certified manufacturer can provide the documentation that supports notification and export. Treat “the manufacturer handles everything” with caution: a good manufacturer prepares the documentation and checks compliance, but the brand’s responsibilities remain the brand’s.
Next step
If you are weighing the routes for a specific product, describe it in a product brief and choose “Not sure yet” as the development route. Celcode will reply with the options and what each involves for your product.
Frequently asked questions
Is private label skincare legal?
Yes. Private label products are cosmetic products made by one company and sold by another. In Singapore the company that places the product on the market notifies it to the HSA and is responsible for its compliance and claims; the manufacturer is responsible for manufacturing it under a controlled quality system.
Who owns the formula in each model?
In private label and ODM, the manufacturer owns the formulation and may supply it to other brands. In OEM with a custom formulation, ownership and exclusivity are agreed in the contract; raise this before development starts.
Can I move from private label to custom formulation later?
Yes, and many brands do: they launch with ready formulations, learn what their customers want, then develop a custom hero product. Working with one manufacturer for both routes keeps the range consistent.
Which is cheaper?
Private label has lower development cost because the formulation already exists. Unit costs depend on the formulation, packaging and quantity in both models. Custom formulation adds development and testing costs but gives a product no other brand sells.
Sources
- Regulatory overview of cosmetic products, Health Sciences Authority, Singapore
- Written by
- Celcode Dermal Lab
- Reviewed by
- Celcode Dermal Lab
- Published
- Updated
- Last expert review