A contract manufacturer (CM) is a company that is contracted by another company to manufacture components or products, or to eventually provide a service. It is a form of subcontracting. Business model
In the contract manufacturer's business model, the contracting company approaches the CM with a design or formula. The CM analyzes what is part of the process, labor, tools, and material costs. Usually, the contracting company will request quotes from multiple CMs. After the bidding process is complete, the contracting company selects a CM, and then, for the agreed price, the CM functions as a factory or supplier of the contracting company; the production, the sending of units, or the execution of a service, everything is done in the name of the contracting company.
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