Contract manufacturing in Mexico is a business model where a company outsources the production of its goods to a manufacturer in Mexico. The manufacturer, known as the contract manufacturer, is responsible for designing, producing, and delivering the goods to the company.

This business model allows companies to take advantage of the cost savings associated with manufacturing in Mexico, such as lower labor costs and lower production costs. It also allows them to take advantage of the country’s well-developed manufacturing infrastructure, including a large pool of skilled workers and an established supply chain.

In a contract manufacturing agreement, the contract manufacturer is typically responsible for providing the necessary resources, including equipment, materials, and labor, to produce the goods. The company, also known as the “original equipment manufacturer” (OEM), typically provides the specifications and design of the product, and may also provide some of the raw materials or components used in production.

Some contract manufacturers in Mexico also provide additional services such as design, engineering, and quality control to help their clients improve the efficiency and quality of their products. Additionally, Contract manufacturing companies in Mexico are in most cases set up to handle logistics and customs clearance so their client can have a one stop shop for all the requirements for their product to reach its destination.