What is OEM and ODM? Differences, benefits and suggestions
Have you thought about manufacturing your products in China? If you have started your search for Chinese manufacturers to develop your product, you have probably heard the terms OEM and ODM. Here we will tell you what they are, what the differences are and their advantages. We will also leave you some suggestions.
How much do you know about OEM and ODM?
Both are terms that refer to types of manufacturing companies.
OEM, which stands for Original Equipment Manufacturer, is a company that manufactures products designed by a different company.
An OEM is responsible for manufacturing the products designed by the purchasing company.
ODM refers to Original Design Manufacturer. It is the one who has the original design of a product and licenses its manufacture to a third party.
OEM and its characteristics
In this case you will be able to choose your own visions, requirements and detailed specifications of your product and take them to an OEM factory.
The OEM (original equipment manufacturer) will start manufacturing your product from scratch, will be attentive to your needs and will respect your wishes.
This is the type of supplier you should look for if you want to manufacture a unique product for your brand. You can then outsource the distribution of your products to another company.
ODM and its characteristics
An ODM (original design manufacturer) factory will give you product ideas. If you propose some functionalities, performance and ideas expected from the conception, the factory will manage to suggest you a final product. Don’t know how to create a product? An ODM factory could implement all your ideas and wishes.
Benefits
OEM
OEMs allow companies to focus on their own products.
In addition, they are specialized in their products.
Development and production costs are lower for PC manufacturers.
They offer the possibility to experiment with the most innovative technologies.
ODM
The biggest advantage of MDGs is that they save importers from having to invest a lot of money in research and development in order to create a product from scratch.
By eliminating or greatly reducing product development costs, importers can focus more on improving production or marketing strategies.
Suggestions
Whatever your choice, both alternatives have their risks. First, allowing your factory to take some of the design credit for the final products is dangerous because it will feel a sense of ownership and may sell the products to other buyers.
On the other hand, when manufacturing a product that has a special design (not a product that the factory is already making), quality problems are frequent!
Make sure you work with the right supplier by personally visiting the factory before placing your order and during production. You can also send a third party to do the work for you. Mingta Group is a great partner for that!
Our team provides a personalized consulting service to facilitate business relationships with Asian manufacturers and suppliers.