ODM OEM

Have you heard the terms ODM and OEM before?

Are you confused and want to know which one suits more for your business?

Original Design Manufacturer (ODM) and Original Equipment Manufacturer (OEM) are two frequently used acronyms related to manufacturing. People often use these terms interchangeably, but they are not the same.

ODM manufacturers design products for themselves while OEM manufacturers design products, especially for the customers.

This means that if you work with ODM factory, you will only need to sell their products. While working with OEM, you should provide your own design of products, and they only help in manufacturing.

For making things easier, in this blog, we will discuss ODM and OEM in detail. It will help you differentiate between ODM and OEM and it can be easier for you to select one of them to cooperate with in the future.

Table of Content

Chapter 1: Understanding the Differences Between ODM and OEM

Chapter 2: Pros and Cons of ODM and OEM Products – Risk Factors Regarding ODM and OEM

Chapter 3: Things you Should Know Before Working with ODM and OEM

Chapter 4: Frequently Asked Questions about ODM and OEM

Chapter 1: Understanding the Differences Between ODM and OEM

ODM and OEM

ODM and OEM are two acronyms that you will see a lot while discussing the most potential business models. People are often confused about their basic use and the meaning of these terms. ODM works differently from OEM.

In this chapter, we are going to discuss detailed information about ODM and OEM to make these terms more familiar to you.

1. What is meant by ODM? How does it work?

ODM is the manufacturer who will finalize all the designing and producing part of a product. The responsibilities of ODM include R&D, white or private label offerings, product manufacturing, and product testing.

Product idea and spotting of a modern showcase opportunity for their brand are the responsibilities of the client.

The ODM products are based on an already existing design that was customized to a few degrees by the manufacturer.

It can also be modified, the most frequent modifications to the products can be the change of product color, coatings, materials used, and plating.

What is meant by ODM

If you buy ODM products, they can be customized and modified with your requested logo. However, not all ODMs work as white label manufacturers. A few ODMs offer product customization options.

The people who have a good idea regarding products but do not want to design them on their own can avail this opportunity.

2. What is meant by OEM? How does it work?

The OEM items are made according to the buyer’s demands. The responsibilities of an OEM client include marketing, product design, product testing, and market research, while OEM only manufactures the product.

What is meant by OEM How does it work

Hence, OEM is the manufacturer who only help in producing items according to a customized plan, color, fabric, and measurements, etc. For the manufacture of OEM products, you will have to provide details like:

  • A colors chart
  • CAD files
  • Size chart
  • Drawings of the proposed design

An OEM supplier produces items according to the exact demands of its customer or at the maximum efficiency humanly possible. An OEM can also provide a buyer with the spare parts or components which he might need for manufacturing goods himself.

3. What kind of product is referred to as an ODM product? How about an OEM product?

The ODM product does not require special moulds. It is made with the help of public moulds. The ODM manufacturers do not provide customization options, and the buyer can only ask for some little changes like the logo to be incorporated in the order.

The buyer is not responsible to pay for the public moulds used in the manufacturing of the ODM goods.

What kind of product is referred to as an ODM product

A product that is manufactured according to the buyers’ specifications is called an OEM product. It is made according to the designs provided by the buyer. The precision of the design buyer is very crucial in the OEM model.

Special moulds are used to create OEM products, and the buyer has to pay for these moulds.

4. How ODM and OEM can help you in saving costs?

ODM and OEM are the two best ways to get goods for your business. Both of them provide you value for the money you invested. ODM and OEM suppliers reduce the time required to manufacture products and save your energy also.

The products are made according to your plans. They can adjust whatever changes you want them to make. If you wish to get a product that is completely customized and made according to the design you provided, then you should choose OEM.

How ODM and OEM can help you in saving costs

ODM suppliers give you products that are not customized and only have a logo of the company.

Choosing ODM and OEM suppliers can help you get hands-on larger volumes of goods within less time and with no extra efforts involved. You do not even need to hire people so, it saves the cost investment also.

5. Comparison between the production of ODM and OEM?

ODM and OEM are two models that can provide you with goods, then you can sell through your company’s platform. Both these models have diverse uses and are significant for the buyers. Following are two crucial points regarding their comparison.

  • Customized mould and public mould

Special products need special moulds. When you want the seller to provide you with goods that are exactly similar to the design you made then, you will opt for the OEM. OEM providers will get customized moulds for you.

In such cases, a buyer mostly has to pay for the special and customized moulds.

The public moulds will be used to create your ordered products if you opt for the ODM model. So, you will not have to pay for them.

Customized moulds create some special and one of their kind products. If a buyer wants to stand out in the market and provide the most unique goods, he should choose the OEM model.

Comparison between the production of ODM and OEM

In this way, he can also retain the copyrights of that design. The goods that have been made by using public moulds are common in the market. So, they can be differentiated only through the logo and the packaging.

  • Complete products and components

Every buyer does not want to get goods or complete products only. Some of them want to get the spear parts and components. But which model is suitable to buy the components? The answer to this question is OEM.

Original Equipment Manufacturer can also provide components to the buyers. You can order complete goods from both ODM and OEM. However, you can get components only through OEM. 

6. How to choose manufacturers to work with? OEM or ODM?

How to choose manufacturers to work with

To choose the best manufacturer for getting goods, you will have to analyze your requirements first. You will have to see what you can compromise on and what you cannot miss.

Do you want to get unique goods made according to your designs, or do you only need to get goods that have a logo of your company with a little overall modification?

You will also have to analyze your budget and see what suits you the most. Time also is one important factor to determine the supplier.

After a thorough analysis, you will know if you want ODM or OEM products, and you can find the suppliers after that. ODM and OEM suppliers are available all around the world.

It is the 21st century, and most of the work is carried out online so, you can get find suppliers on the internet also. You can conduct virtual and face-to-face meetings. Get samples to test them and then decide the best supplier.

Chapter 2: Pros and Cons of ODM and OEM Products – Risk Factors Regarding ODM and OEM

Pros and Cons of ODM and OEM Products

Everything comes with some benefits and disadvantages. No matter which method of manufacturing someone chooses, one should know completely about it.

Knowing about the risk factors and cons can help you make up for them beforehand, and getting knowledge about benefits will improve your decisions.

In this chapter, we are going to discuss the pro, cons, and risk factors linked with ODM and OEM.

1. Original Design Manufacturer (ODM)

Original Design Manufacturer (ODM) is a very frequently used method to get designed products. It allows you to customize the previously designed and manufactured goods a bit according to the demands of your company.

The main advantages, disadvantages, and risks related to ODM are being discussed below.

-Pros of ODM

The benefits of using ODM for product sourcing are being given below.

  • You won’t be charged for moulds. Your supplier has to pay for special instruments or moulds.
  • Marketing of ODM is usually quicker than OEM.
  • ODM saves your time and money on R&D.
  • The dangers of a duplicate product can be significantly diminished by connecting to a well-reputed ODM supplier.
  • The manufacturer does not need a lot of money and resources to create a product. So, the ODM rates are thus very reasonable.
  • ODM minimizes the need for your efforts, research, money, and resources to create new products.

-Cons of ODM

Cons of ODM

The drawback of ODM include:

  • When you are selling ODM products, it is difficult to win the competition.
  • You cannot customize the products for your brand, because ODM won’t allow you to change a lot of their moulds.
  • You never own the IP of the product, because it belongs to ODM.

-General risk factors involved in ODM

Like OEM, there are dangers and benefits related to undertaking an ODM project. The important risks of ODM you should be aware of include:

  • The provider or the supplying company possesses all of the copyrights and intellectual property of the product. They can sell it to other buyers also so you might see different copies of the same product in the market.
  • Because of copyrights confusion, the other companies might threaten you to cease selling the product.
  • A buyer is responsible for any problem that occurs during sampling and product control.

2. Original Equipment Manufacturer (OEM)

Original Equipment Manufacturer

Original Equipment Manufacturer (OEM) is essentially different from the Original Design Manufacturer (ODM). Therefore, their main advantages, disadvantages, and risk factors are also different.

You should know about them to keep yourself ready to face any such situation and make necessary changes on time.

-Pros of OEM

The pros of the OEM model that may encourage you to give it a try are listed below.

  • A buyer can ask for customization of the product. The buyer holds creative control over the design. It is easier to pitch the client base with a unique way of marketing to stand out.
  • A brand can avoid high pitch competition among the sellers with unique products.
  • Due to the copyrights, it will be difficult for frauds to make duplicates of your product so, there is less chance of fabricating.
  • The product is made according to the client’s demand with as much accuracy as humanly possible.

-Cons of OEM

Cons of OEM

Just like the ODM model, OEM also has some cons. The drawback of OEM include:

  • A considerable amount of money is required to design and manufacture a unique item.
  • The complicated process and lengthy time-frame required to manufacture.

-General risk factors involved in OEM

The two main risk factors or dangers related to the OEM model of manufacturing are given below.

  • You as a buyer might be asked to pay for any extraordinary devices or special moulds if required. It is because the OEM suppliers work according to the buyer’s requirements. So, if a buyer orders a unique product that needs some special sort of mould, then he will have to pay for it.
  • Product manufacturing and customization can significantly increase the required time to market products, thus, it may cause extra delays.

Chapter 3: Things you Should Know Before Working with ODM and OEM

After you get maximum knowledge about these models, you cannot jump to the practical side of working with ODM and OEM. In this chapter, we are going to introduce you some crucial things that you must know before working with ODM and OEM suppliers.

Things you Should Know Before Working with ODM and OEM

1. Why should you work with ODM and OEM?

Working with ODM and OEM products reduces your efforts and time wastage. They are result-oriented and make the process of manufacturing and developing products easy for you.

A wide range of opportunities like slight modifications or complete customization is also available when using ODM and OEM platforms.

By hiring ODM and OEM for products manufacturing, you can get time to focus on the bigger problems. It helps you save time and energy.

Being an expert in their business, ODM and OEM fulfill all your demands and make the products according to your requirements.

2. From where to find the suppliers offering ODM products?

Most of the ODM and OEM suppliers are located in low-cost countries. It is because labor is cheaper in those countries, and you can find several suppliers in the same place.

You can find conventional ODM and OEM suppliers from big cities in China, such as Shenzhen, Shanghai. Southeastern countries of Asia like Vietnam also are good choices for you.

You can virtually find the suppliers offering ODM and OEM products through online platforms.

These platforms like Alibaba can analyze your demands and allow you to find the best-suited supplier from across the world. Most buyers prefer online platforms if they have to buy a small number of products.

3. Dealing with ODM and OEM products

Dealing with the ODM and OEM products suppliers is itself an art. Conveying the details about your demands of products is very important. So, you might need to have conventional and virtual meetings with the suppliers.

Receiving and reviewing product samples can also play a key role in the effective management of the process.

From where to find the suppliers offering ODM products

Regular phone calls (both) audio and video, instant message exchange, conventional meetings and interactions, sample exchanges can help you in efficiently dealing with ODM and OEM suppliers.

4. Major problems you may face while working with ODM and OEM

The main risk and problem regarding working with ODM and OEM suppliers are that it is very difficult to keep track. If not managed properly, you may always wonder a lot of questions.

For example, you may consider which file was the latest and which was edited afterward. Who approved which file and sent it to whom? What was the most recent change or modification, and what is the current production status?

All these questions create a lot of confusion and distress. If not resolved, the problem causes conflicts and makes the situation even worse.

The other risk is security. You must have heard several scam stories, so you should keep yourself secure.

You should always do complete research before starting any such work-related relationship, and you should prefer the reputed ODM and OEM suppliers to stay on the safe end.

Chapter 4: Frequently Asked Questions about ODM and OEM

Frequently Asked Questions OEM ODM

1. Are private labeling and ODM the same?

Private labeling is all about template products. The supplier provides the buyers with template products, so, they can put their own logo on those products.

Buyers do not manufacture the products, and they do not even need to go through the complicated development process.

It saved both time and money for the buyer. Because investing in the expensive tools and molds and knowing their use is time-consuming and very expensive. The main concept of ODM is also the same. So, private labeling and ODM are similar in concept.

2. ODM or OEM – Which one is easy to buy?

OEM is better than ODM. People often think that buying and managing ODM products is easy, but it is not true.

The main reason is that it is very difficult to customize a previously engineered product. The product should be different from other such products present in the market. It often takes more time to customize an old product than to create a new one.

Making OEM products is easier as it provides you full authority to create a unique product within less time. Uniqueness is the key to a successful business.

If your products match ten other products available on the market, then, your competition will be multiplied. On the other hand, creating an OEM product will eliminate that factor by making your products unique and trendy.

3. What is the minimum order quantity and price difference of OEM and ODM?

ODM and OEM have a lot of differences, but the minimum order quantity (MOQ) is not one of them. There is no difference between ODM and OEM regarding minimum order quantity.

The price difference between the ODM and the OEM products is evident. It is because ODM products do not need tooling so, they are cheaper.

On the other hand, OEM products come into existence after a lot of effort and planning along with time and money investment.

4. ODM or OEM – Which is better for my business?

ODM and OEM are two options that you can use to source your goods. Both of them have their own benefits and losses. Without knowing the objectives and needs of your business, it will be really difficult to say which will be best for your business.

ODM model catches the attention of companies that are not interested in the marketing of products. They want to sell their products through well-reputed brands. They only pack the goods with their unique IP address.

OEM model is used for creating high-quality customized products for the major brands. It needs resources like a development budget, thorough research, and a reasonable marketing plan, etc.

So, businesses that can dedicate their time and effort for this can go for OEM products.

Conclusion

Deciding about ODM and OEM depends directly upon the available resources. A company that has enough budget for research and development can opt for OEM. On the other hand, if time and resources are scarce, then ODM is the best fit.

In this blog, we had discussed the key information related to ODM and OEM. If you still have any queries regarding ODM v/s OEM and their differences, then you can drop them at EJET.com. We will be glad to answer you.