Working with a contract manufacturer can either be a tremendous asset or an absolute nightmare, depending on your choice of partner. The most important step to making the right decision and safeguarding your brand is understanding industry-specific terminologies. In this article, we'll decode some key terms in the hemp industry, including Scope of Work (SOW), Minimum Order Quantity (MOQ), Certificates of Analysis (COA), and product specifications (Specs).
MINIMUM ORDER QUANTITY
MOQ or Minimum Order Quantity is a crucial term in the manufacturing industry, indicating the smallest amount of a product that a manufacturer is willing to produce and sell. Understanding MOQs is essential for businesses, as they dictate the minimum investment needed to initiate production. Especially for startups or small businesses, partnering with a manufacturer offering low MOQs can be advantageous, allowing them to offer diverse SKUs without substantial upfront investment.
CERTIFICATE OF ANALYSIS
Certificates of Analysis (COA) are critical documents provided by third-party laboratories that test products for various parameters. In the hemp industry, a COA may include tests for purity, microbial content, mycotoxin levels, foreign material presence, heavy metal concentrations, and terpene composition. These certificates ensure that the product meets quality and safety standards, giving businesses and consumers confidence in the product's integrity.
SCOPE OF WORK
The Scope of Work (SOW) is a comprehensive document that details the work required by the customer. It outlines the specific tasks, deliverables, and timeline a manufacturer must adhere to for a particular project. A customer's SOW may fall within the manufacturer's capabilities or it may require outsourcing, depending on the complexity of the work. Therefore, understanding the SOW for your project is vital to determine if a potential manufacturer can meet your needs or if they might have to outsource, which may indicate they're not the right fit for your business.
Lastly, 'Spec' or Specification refers to the precise details about a product's active components. For instance, in the hemp industry, a manufacturer might ask for a product's spec, and the response could be something like "25mg Delta 8 gummies, strawberry flavored". This information allows the manufacturer to understand the product's exact requirements and ensures the final product meets the customer's expectations. In conclusion, decoding these industry terms is crucial for any business intending to navigate the hemp industry. Understanding MOQ, COA, SOW, and Specs can profoundly impact your purchasing decisions, help you choose the right manufacturing partner, and ultimately, protect and enhance your brand.