What is OEM?
OEM is the abbreviation of Original Equipment Manufacture. Its meaning is that the producer does not directly produce the product but uses the “key core technology” mastered by himself to be responsible for the design, development, and control of the sales “channel”; the specific processing task is handed over to others companies to do it. This method is a common phenomenon that has gradually emerged globally after the electronic industry has developed in large quantities. Major international companies such as Microsoft and IBM have adopted this method.
What is ODM?
ODM is the abbreviation of Original Design Manufacturer. ODM means that after a manufacturer designs a product, other companies may select it under certain circumstances, requiring the latter’s brand name for production or a slight modification of the production design. This enables other manufacturers to reduce their own development time. Manufacturers who undertake design and manufacturing business are called ODM manufacturers, and the products they produce are ODM products.
Product solutions designed by ODM manufacturers can be provided to brand owners in the form of buyout or non-buyout:
Buyout method: The brand party buys out the ODM manufacturer’s ready-made design of a certain type of product, or separately asks the ODM manufacturer to design a product scheme for itself.
No buyout method: If the brand owner does not buy out a specific type of product from the ODM manufacturer, the ODM manufacturer can sell the design of the same kind of product to other brands at the same time. When these two or more brands share a plan, the difference between the two brands’ products is mainly the logo.
What OEM can bring you
After your company has mastered the core technology of the product and established a mature marketing network, it can no longer directly invest in production but complete the production task of its products by letting other companies produce on its behalf. In this way, you only need to pay the cost of materials and processing fees without bearing the risks of equipment depreciation, self-built factories, and production management. You can also place orders flexibly according to market changes. This can promote the formation of new operating advantages in the finished product business, cultivate and strengthen the internal expansion force of the enterprise, improve the operating ability and management level, and move towards a higher level of capital operation.
Difference between OEM and ODM
The main difference between OEM and ODM is that the former is the product design plan proposed by the entrusting party – no matter who completes the overall design. And the entrusted party shall not provide the third party with the product with the invention; the latter is completed by the manufacturer itself from design to production and purchased after the product is formed. ODM depends on whether the brand company has bought out the product’s copyright. If not, the manufacturer has the right to organize production by himself, as long as the enterprise company has no design identification. To put it bluntly, the difference between OEM and ODM lies in who owns the product’s intellectual property rights. If the entrusting party owns the intellectual property rights of the product, it is OEM; and if it is the overall design carried out by the manufacturer, it is ODM.
In the industrial society, OEM and ODM can be described as usual. Because of the consideration of manufacturing cost, transportation convenience, and saving development time, well-known brand enterprises are generally willing to find other manufacturers, OEM or ODM. If you want to find another company for OEM or ODM, please note that you also have a lot of responsibilities. After all, the product is crowned with its brand. If the quality of the product is not good, at least some customers will come to complain and, at worst, may have to go to court. Therefore, you should carry out strict quality control during commissioned processing. When some merchants tell you that the manufacturer of a particular product is an OEM or ODM product of a specific brand, never believe that its quality is equivalent to the brand. You can only think that this manufacturer has a particular capacity for production.
Keyanng OEM Service
Keyanng’s on-demand service can manufacture OEM products for you according to your exact requirements. Keyanng always maintains high standards, and the excellent quality also meets the high requirements of specific industries. We machine components for various industries – whether you want something metal or plastic. Submit your project for a free review, and you will receive our quote within 12 hours.
