You have seen the word OEM & ODM, but you have no idea what does it mean. Many people are still confuse because they do not know how it works.
While both words are related to the manufacturing industry, they havedifferent meaning between each other. So what are the difference?
Stand as Original Equipment Manufacturing, the company produces products based on the requirements. The design, functions, colors and materials used in the product are customized based on the requirements made.
OEM companies never design any of the products on their own. They are responsible for making and producing the product. Once the final product is out, the buyer can then sell the product with their own private label.
In most cases, there are companies that wants OEM services are mostly private label companies, where they print logos or designs on the product.
It’s common to find companies that does OEM in the industry, such as cosmetics, skincare, electronics, perfume, personal care, stationary and etc. However, it is best to pick the right OEM manufacturer before giving the secrets of your product.
Just make sure they give you the best services and the best product quality for your business confidential.
The word means Original Design Manufacturer. These are companies that design and then produce products for their customers. They will select an existing product design and makes a few changes to the product, making it their own.
The service makes it possible for companies to make their own product without changing anything when they can use the existing design. Therefore, the company have the rights to obtain ownership of the design although the product meet their requirements.
In fact, ODM will only provide low pricing for the products when there is no need to design it.
To understand the differences between the meaning of OEM & ODM, here is an example:
Imagine you are the owner of your brand with an idea of how you want your product to be, but you need somebody to help you develop it. You have all the specification and information needed to create the product you want.
After you pick your right OEM partner, you share your idea with them to build your product. When the final product is out, all you have to do is brand, finding distributors and selling it to the market.
Now, lets just say you have an idea of the product, but you do not have the specifications you want. You will have to pick an ODM manufacturer that helps you to do Research & Development, design, testing and manufacturing the product.
The good thing about ODM is that you can have product developers to help you design your idea, something an OEM doesn’t do.
However, the bad thing about having an ODM manufacturer is that you may not have much authority about the product design and specifications
Besides, you may not maintain the intellectual property of the product, and in most cases, you will have to work out a deal that works for both parties.
Comparing OEM and ODM, ODM manufacturer only produce certain types of products. Thus, it is much recommended to choose an OEM Partner. As of today, most of ODM manufacturer require bulk orders from companies that wants customization on their products.
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