Contract manufacturing frees up people at the hiring firm to stay focused on their core strengths of marketing and, possibly, sales.
The most important cost-benefit of using contract manufacturing is from not having to build a production facility and staff it with workers and managers. Apart from that apparent benefit, companies save money by hiring a manufacturer based in a low-wage category. The location of the manufacturing plant might also offer savings in energy, overhead, and raw material costs as well as tax savings.