Engaging MHS as Your Contract Manufacturer: A Guide for Start-ups

For most start-ups, engaging a contract manufacturer is the practical way to bring a product to market — and with MHS, preparation is key. This guide explains what we need in your brief, how we confirm MOQs and batch sizes, and how those choices affect per-unit cost and margin. You’ll see what we require up front and how to avoid common pitfalls in our process. With these steps, you can launch smoothly while staying compliant with Australian food/supplement regulations. In short: do your homework, start with a manageable batch, and build a working relationship with MHS that fits your stage. Remember: the price per unit at MOQ is definitely not designed to deliver “dream” margins — there’s a big difference between establishing a product and scaling it.

What MHS Needs from You.

Before engaging MHS, assemble a clear product brief. A thorough brief helps us assess feasibility and provide an accurate quote. Include the following:

  • Product concept & formulation: Describe your product and its purpose (e.g. a vegan protein powder, an immunity gummy). List key ingredients or active components if you have them, or at least the functional benefits you’re aiming for. If you need help developing the formula, we can assist.
  • Target market & claims: State the intended use and any claims you wish to make (e.g. “high in vitamin C for immune support”). This helps determine if the product is regulated as a food or therapeutic good. Avoid therapeutic claims (e.g. “cures anxiety”), which would classify the product as a medicine requiring TGA approval. Stick to general health or nutrition claims that meet food standards.
  • Batch size & packaging: Propose an initial order quantity (e.g. 300 units) and your desired packaging format – for example, 60-capsule jars, 500 g pouches, 100 mL dropper bottles, etc. Include any packaging elements you want (bottles, lids, labels, boxes) and whether you prefer us to help source these or supply them yourself. Keep in mind packaging suppliers often have their own MOQs (we address this below).
  • Target costs & pricing: Share any cost goals – e.g. “aiming for <$10 manufacturing cost per unit” or a target wholesale/retail price. This lets us advise if your budget aligns with your formula and packaging choices. We can suggest adjustments to meet a cost target (like simpler packaging or alternate ingredients).
  • Timeline: Indicate when you hope to launch or have products in hand. For instance, if you need stock for a trade show in 6 months, we can advise whether that’s realistic. Remember to factor in time for formulation, testing, production, and shipping. Providing a desired timeframe helps us schedule your project or flag any timing conflicts early.
  • Branding & artwork: Note the status of your branding and label design. If you have logo/label files ready or a designer working on them, mention it. If you’ll need assistance with compliant label layout (e.g. nutrition panels, ingredient listing), we can provide templates or design support. (Tip: You don’t necessarily need final artwork to start production, but you will need it by the time of filling and labeling.)
  • Compliance needs: Let us know of any special regulatory or certification requirements – e.g. “must be certified organic”, “dairy-free facility needed”, or “export to EU planned (so need EU-compliant labels)”. This ensures we confirm we can meet those needs.

Preparing this information not only saves time during initial discussions but also shows that you’re a serious, organized client. MHS uses a Product Brief / New Product Development form covering the above points. Providing clear details up front enables more productive quotes and feedback.

Formulations: Our Policy at MHS

MHS is a contract manufacturer — we do not provide formulation services. We manufacture to your supplied formulation and specifications.

Whether you are using AI for your formulating(The latest generation of AI tools in common use are producing formulations that are basically indistinguishable from consultant formulations) or engaging a specialist food technologist or regulatory consultant, MHS will not offer a compliance review of your formulation. Only a technical review to assess manufacturability.

What we provide

  • High-level guidance on manufacturability (e.g., process fit, flowability, fill format, stability considerations).
  • Generic guidance on likely classification as a food under the Australia New Zealand Food Standards Code (FSANZ) versus a therapeutic good (TGA).
  • Quotations based on your supplied formula, packaging and batch size, and (if requested) sourcing of ingredients/packaging.

What we don’t provide

  • New product formulation, reformulation, or optimisation services.
  • Regulatory approval, legal sign-off, or claim substantiation for ingredients, labels, or marketing.
  • Manufacture of TGA-listed therapeutic goods.

You may instruct MHS to produce any formulation you choose, subject to materials and process capability. However, if we believe a formulation is not compliant with FSANZ requirements for foods/supplements, we will require a written declaration that the product is for export only. This aligns with our insurance coverage and risk-mitigation obligations.

Bottom line: bring a finalised formulation and brand assets (graphics); we’ll assess manufacturability, confirm MOQs/lead times, and produce to spec.

MOQ vs Profit: Choosing Your First Batch Size

One of the biggest decisions for a start-up is how large the first production run should be. At MHS, MOQs depend on the formula, packaging, and line setup, and we’ll confirm this in your quote. The trade-off is straightforward: smaller batches require less cash upfront and reduce your risk if the product doesn’t sell, but they have a higher cost per unit. Larger batches yield a lower unit cost and better profit margin per unit, but come with higher upfront expenditure and the risk of leftover stock.

At MHS, the purpose of an MOQ order is to test the market and validate your idea. It is not realistic to expect an MOQ order to achieve anything close to the margins of a full production order.

When deciding on your initial order size, consider these factors:

  • Cash flow and budget: How much can you realistically afford to invest in inventory? A low MOQ (say 300 units) might cost, for example, $5,000, whereas 1,000 units might cost $12,000. If a larger run strains your budget to the point that you can’t finance other vital things (marketing, packaging design, etc.), it may be wiser to stick to a smaller batch.
  • Cost per unit vs. price: Calculate your estimated unit cost at the MOQ versus a larger quantity. Will you still have a workable margin at the MOQ unit cost? It’s okay if the margin is slim on the first batch – many new brands accept a lower profit initially – but you should at least cover your production costs and validate that people will pay your target price. We’ll help you understand the trade-offs.
  • Market uncertainty: If you’re unsure how the market will receive your product, err on the side of a smaller batch. It’s better to sell out a small run (and maybe have a short stockout while reordering) than to be stuck with thousands of units that won’t move. Early feedback from a small batch can also inform tweaks to your product or branding in future runs.
  • Shelf life: Check the nature of your product – does it have an expiry or best-before date? Products like protein powders or capsules usually have long shelf lives (18–24+ months), whereas a probiotic drink or natural cosmetic might expire faster. For anything with a shorter shelf life, a massive first order is risky (you don’t want to throw away expired stock). In such cases, lean toward the MOQ or a modest batch until demand is proven.

The key is to find a balance. Your first batch should be large enough that you can hit the market and learn (and hopefully cover fixed costs), but not so large that a misstep becomes a major financial blow. Many of our start-up clients choose an initial order at the MOQ minimum but not far beyond it – you can always scale up on the second order once you see traction.

Worked Example: Unit Economics at Different Batch Sizes

Let’s illustrate how batch size affects unit cost and margin. Say your product’s retail price will be $30. The variable cost (ingredients, packaging, labor per unit) is about $8. There is also a $3,000 fixed setup cost for manufacturing (covering machine setup, paperwork, etc. – often the same whether you order 200 units or 2,000). We can calculate the approximate margin per unit at various production quantities using the formula:

margin per unit = price – (variable cost + setup cost ÷ quantity)

Batch Size (units) Margin per Unit
250 $10
350 $12
500 $16
1,000 $19

In this example, at the low 250-unit run, the $3,000 setup cost adds about $12 per unit, leaving a margin of only $10 if you sell at $30. At 1,000 units, the setup cost per unit is only $3, so the margin rises to $19 per unit. This demonstrates the economy of scale: larger orders spread fixed costs and generally lower the per-unit price.

Key take away - understand the economy of scale, don't expect to retire on the profit of a MOQ order.

Next Steps for Australian Brands

Successfully engaging MHS comes down to careful planning and open collaboration. As a next step, ensure you have your product brief polished and ready to share. Then, reach out to us to discuss your project. If you’re comparing providers, bring your questions — the right partner will help educate you through the process.

At MHS, we’re happy to guide Australian start-ups from concept to finished product. Our typical service flow includes a feasibility review of your brief, a detailed quote with confirmed MOQs and lead times, and a step-by-step production plan. We handle sourcing of ingredients and packaging, manufacturing under an audited quality system, and even offer post-production support like warehousing and fulfillment. You can think of it as an extension of your own team, dedicated to getting your product retail-ready.

If you’re ready to take the next step, we invite you to contact us for a discussion or quote. Whether you’re launching a niche health supplement or a new skincare line, we can tailor a solution to fit your scale and budget. Feel free to also explore our Contract Manufacturing Services (covering supplements, cosmetics, and more) to learn about our capabilities, or check out our About us page to see our commitment to quality and compliance. We’re a Brisbane-based team that understands Aussie regulatory requirements and consumer expectations.

In summary: engaging MHS as your contract manufacturer is a significant milestone for your business. With the right groundwork, you’ll be on your way to seeing your product on the shelf, proudly marked “Made in Australia”.

Frequently Asked Questions

Not necessarily. You can kick off certain steps (like formulation, ingredient sourcing, even bulk production) while finalizing your label design. However, you will need finished artwork by the time of packaging (filling and labelling). Packaging components (bottles, pouches, labels) often have their own lead times, so any delay in artwork can become a delay in getting product out the door. It’s best to work on design in parallel with production. Coordinate with MHS: we can usually proceed up to the point of needing the labels. If your artwork is running late, one option is to complete production and hold the product in bulk at MHS, then package as soon as labels arrive.

At MHS, the primary trade-off with a low MOQ is a higher cost per unit, which can squeeze your profit margins. Small runs still incur fixed setup costs, so each unit “carries” more of those costs. This means you might have to price the product higher or accept lower profit on each sale. Another risk is selling out quickly – a tiny batch can leave you out-of-stock if your product proves popular, and you’ll need to reorder (with another setup cost) sooner than if you had more inventory. There’s also less economy of scale for packaging and shipping. The benefit is limiting upfront investment and inventory risk. Many start-ups choose the minimum viable batch to test the market. Just be aware that unit economics improve with scale, and plan your pricing and cash flow accordingly. We’ll help you plan reorders if your low MOQ batch is a hit.

This is a common scenario. Packaging and label suppliers often require a larger minimum order than your first production batch. For instance, you might produce 300 units, but the bottle manufacturer’s MOQ is 1,000 pieces (so you’d have 700 extra bottles). In such cases, you can purchase the excess and store the leftover packaging for your next run — we can discuss storage options. Another approach is to ask MHS if we have flexibility or stock packaging options. Sometimes we can supply packaging in smaller lots or have generic options on hand. For labels, digital print runs can allow lower quantities (at a higher unit price). Factor packaging overruns into your budget and storage plan.

At MHS, reordering is typically smoother than the first production run. Much of the groundwork (formulation, testing, initial label proofing) is done, so we’re essentially repeating the manufacturing process. Often, you won’t have to pay certain one-time costs again — if you paid an initial setup or R&D fee, we generally won’t charge that for identical repeat orders. This can reduce unit cost. Timelines may also shorten, but you’ll still need to account for ingredient lead times and our production schedule. Keep us informed on sales so we can allocate production slots and materials. Many brands place their second order before the first run completely sells out to avoid gaps in stock.

You need to comply with the Australia New Zealand Food Standards Code for any product sold as a food or dietary supplement. This includes correct labelling (ingredient list, nutritional information panel, allergen declarations, etc.) and only permitted health or nutrition claims. Standard 1.2.7 of the Code governs health claims – for example, you can’t claim that a food prevents or cures a disease (that would be a prohibited therapeutic claim). Any general health claims you do make must be supported by scientific evidence and meet the nutrient profiling scoring criteria. If your product is positioned as a complementary medicine (vitamins, herbal capsules with therapeutic claims), then it would fall under the Therapeutic Goods Administration (TGA) and require listing on the ARTG (which is a more complex process). For most start-up food and wellness brands, it’s preferable to stay on the food side of regulations to avoid that hurdle. In practice, this means wording your marketing and labels carefully. Example: you can say “supports healthy digestion” (general health claim, with appropriate context) but not “treats IBS symptoms” (therapeutic claim). At MHS, we review client labels for red flags and provide guidance so that you meet Aussie requirements. Ensure batch codes and expiry dates are on products, and keep records of ingredients and batches.