If you are a manufacturer, you may have come across OEM. An original equipment manufacturer or OEM is the company whose goods will be utilized like components within the products of some other company. This is referred to as a value-added reseller or VAR. A VAR will function closely with the OEM. They usually customize designs that are based upon the VAR’S requirements and specifications. You may have even come across ODM and are wondering about OEM vs ODM, ODM stands for Original Design Manufacturer. OEM’s tend to sell highly customized merchandise that is made to suit a customer’s need whilst ODM make their own products then lease these to clients upon a private label or some white label basis. In this way they will not need to build a consumer brand for themselves.
If you are wondering about OEM vs ODM and customization opportunities for product manufacturers, read on to find out more:
Knowing about OEM
OEMs will make parts that they will then sell to VARs. There are however some OEMs that make full items for some VAR to market, they often do not determine the completed product. When looking at an OEM, they may make electronic components for some company such as Samsung and the VAR may make HDTVs.
OEMs mostly concentrate on business-to-business sales. Car parts like exhaust system are made by OEMs. These OEM parts may then be sold to some auto manufacturer who will assemble them into a car. The car will then be marketed to auto dealers so that they can sell them to individual customers.
OEMs may even sell to the general public. It is possible for someone to purchase OEM parts directly from some manufacturer or even a retailer who buys the parts to pursue car repairs.
You can better know about OEM vs ODM if you know about these terms.
OEM vs ODM
When considering OEM vs ODM, an OEM will be different from an ODM as they are a kind of private labeling for some manufactured parts. The ODM will make a product that will be according to the customer’s specifications. A client will be able to label as well as sell the merchandise under a brand name.
When looking at an ODM, they do not have the same level of flexibility like an OEM as the client will customize the design. But, the original design manufacturing possess lower costs for research as well as development. This results in lower prices for the customer. ODM products often carry a lower minimum order quantity, allowing them to be better for smaller clients.
Therefore when looking at OEM vs ODM, we can see that OEM has better branding opportunities and can customize the product much.
Example of OEM
If you want to better know how an original equipment manufacturer works, let us look at an example. There may for instance be a company that makes memory cards. The company will not only make one type of the item but several versions of it. These will then be sold to different computer manufacturers. OEMs therefore have the opportunity to customize the product.
When considering OEM vs ODM, ODMs design the product differently than them.
Characteristics of OEM
OEMs tend to sell product licenses to employ their parts to some value-added resellers that they market to. It is possible to easily buy hardware online. This may be from some retail product manufacturer or even through an OEM. You need to know that OEM hardware will often be shipped incomplete of parts like cables as well as adapters which are needed for the installation as well as operation of the particular hardware.
OEM software and the hardware, often do not come with much stuff. This is except for the basic software as well as its license key.
Why choose OEM products
If you are wondering about OEM vs ODM, it will be helpful to know why to choose OEM products.
These are of a good quality. This is because an OEM product will be the same one that is manufacturer by the original manufacturer. There may be cheaper versions present but the cost of the OEM product will reflect its quality.
OEM products are often durable. They are even of a good quality. OEM parts even claim to have a longer lifespan in comparison to aftermarket parts.
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When considering customization as well as branding opportunities for product manufacturers whilst keeping in mind OEM vs ODM, it can be seen that with OEM it is more possible for a manufacturer to pursue customizations as they will be creating the product in this way. But when looking at ODM, they make their own products then lease these out to clients. Businesses can employ ODMs so as to get some idea to market fast with limited R&D costs.