These services have a direct impact on production costs. By outsourcing this aspect of the production process to a contract assembly service provider, companies can benefit from cost savings in several ways. They eliminate the need for investment in machinery and equipment required for assembly, resulting in a reduction in fixed costs. Additionally, assemblers have specialized expertise and experience, leading to increased efficiency and a reduction in labor costs. Because assembly providers typically operate on a larger scale, they can usually negotiate better prices for raw materials and components, resulting in a lower cost of manufacturing operations.