A contract manufacturer (“CM”) is a manufacturer that contracts with a firm for components or products (in which case it is a turnkey supplier). It is a form of outsourcing. A contract manufacturer performing packaging operations is called a copacker or a contract packager. Brand name companies focus on product innovation, design, and sales, while the manufacturing takes place in independent factories (the turnkey suppliers).

Most turnkey suppliers specialize in simply manufacturing physical products, but some are also able to handle a significant part of the design and customization process if needed. Some turnkey suppliers specialize in one base component (ex. memory chips) or a base process (e.g. packaging or plastic molding)