Are you thinking about the differences between ODM and OEM in a manufacturing business? If yes, you are at the right place. With many differences in production lines, OEM refers to its own brand name, but the ODM manufacturers make the intrinsic product. A contract manufacturer always looks for the best OEM and ODM products.
That’s why people are looking for a sourcing company that connects them to private labeling services. As a sourcing expert with a decade of procurement knowledge, we can help you through difficult supplier situations. You can get the real difference between ODM and OEM, and find the best manufacturers.
Let’s explore what is to come in the following article!
What is OEM & ODM?
OEM is the original equipment manufacturer. They make sure to manufacture the product according to the customer’s demands. Original equipment manufacturing makes a product that is a component of any device. OEM service is also popular among brands because of the increased flexibility of choice.
But, if you ask about the ODM services, they are the original design manufacturing (ODM). It includes an original design manufacturer. They design the item according to the production company’s product specifications. You can’t change the requirements of the ODM company.
OEM vs ODM: what’s the difference?
Both OEM and ODM services benefit the manufacturing process in their means! But they hold some differences. Let’s explore these critical differences in the below section.
1. Pros and cons of OEMs
The production of components through OEM services costs a lot more than their economic scale. OEM manufacturing in countries like China has provoked large-scale production and streamlined processes. Thus, the increased manufacturing of OEM products enhances the profit margins. This is also helpful for the original equipment manufacturer.
The suppliers who don’t have the technology to manufacture products use OEM manufacturing to use modern technology. In this way, you can manufacture all OEM products with cutting-edge accuracy.
Another fantastic benefit is they give you the intellectual right to OEM manufacturing.
In contrast to these pros, there are some cons as well. One of the commonest disadvantages is you get only a limited selection of products while maintaining your brand name. Besides, the OEM service also holds some risks for intellectual property.
2. Pros and cons of ODMs
The manufacturer doesn’t have to stress product compliance with the supplier’s ability to design the existing product when it comes to the ODM model.
They also don’t have to conduct extensive market research to maintain total creative control for making the final product.
Besides, they carry out the entire process of making the same design for a customer’s product. In this way, it will take less time to produce ODM products. Intellectual property rights are well reserved.
Original design manufacturers also come with some disadvantages. In contrast to private label or custom branded companies, and ODM model produces the same product. Thus, it becomes challenging to increase sales.
3. Main Differences Between ODM and OEM
The main difference between ODM and OEM manufacturing processes is that the ODM business produces the existing product based on the company’s specifications. But, in contrast, OEMs have products according to the customer’s demands. The latter offers a better price competition for the final product. However, choosing between ODM or EOM ultimately depends on your business needs. It’s best to decide on the factor that you thinks benefits you the most. Believe me. It saves you time in the long run.
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Where to find OEM Or ODM suppliers？
Three significant ways can help you build a business relationship with OEM and ODM providers.
1. Search Online
One of the best ways to find the best OEM or ODM suppliers is to search for large suppliers online. Many renowned suppliers such as Alibaba, Made in China, and Global source have online platforms. What I did back then was search in their supplier’s directories. It’s much easier, faster and more convenient.
You can contact them, get a quote, and avail of the contract manufacturing. Almost every original design manufacturing platform is available online.
2. Visit Wholesale Markets
The majority of the customers don’t find it trustworthy to look for suppliers on online platforms. So, visit the nearby suppliers or retailers to get a reliable manufacturer for the OEM model.
But, it is only applicable to large manufacturing companies such as China.
3. Contact Sourcing Agents
Last but not least option is to contact the reliable sourcing agents around you to get the best original design manufacturer. Besides, a sourcing agent can also help you connect with a reputable OEM company.
LeelineSourcing can be the best platform within this section. We have professional agents who never fail to give a reliable ODM model or manufacturer. They also help cope with the high production costs of private label products.
7 Steps to make your OEM & ODM products in China
If you are looking forward to making the best OEM or ODM products in China with low production costs, you should follow the given seven steps:
Step1: Create a Product Prototype
The first step you should follow in being an ODM manufacturer is creating a product structure or prototype. You can do this by matching the formula with your needs. It can help you conduct the OEM or ODM manufacturing best.
Step2: Conduct Inspection
After conducting the product testing, you need to visit the company’s manufacturing centers to check the product design. This ensures that the manufacturer meets all your requirements. You can also make weekly inspections to maintain quality control, just like my team and I did. Many white label companies hold large production centers.
Step3: Sign a Contract with the Factory
After testing or product differentiation, the next step is to sign a contract with the company. The primary reason behind this is to maintain intellectual property ownership during production. Many suppliers offer different duration for the arrangements.
Step4: Product Packaging
Another critical factor in making OEM or ODM products is packing. The contract manufacturer or the factory handles packs of the products. Such companies pack the ODM products based on buyers’ specifications.
Step5: Conduct Testing
After packaging, another step is to conduct the testing to ensure the same design of the item is available in the market. Make sure to hire inspectors to fulfill this step.
Step6: Delivering
This step comes after the processing, packaging, and QC procedures. It involves the customers paying the balance to the reverse engineer. Buyers also let the companies deliver the products.
Step7: Shipping
The last step in the manufacturing of ODM or OEM models is shipping. The customers can suggest shipping methods to the factory for shipping products. It also involves the resources required to ship the products.
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Examples of working with OEM or ODM
If you wonder about the most prominent example of OEM business in China, you should consider Apple and Foxconn. Apple is one of the biggest technology producers, but they lack component production. They can’t produce the accessories compared to their products.
So, to cope with this problem, Apple outsources its products to a Chinese OEM called Foxconn.
Compared to this, if you are thinking of manufacturing footwear but don’t have any idea about it, you will rush to the ODM provider. We have experienced a similar scenario before. And I would say outsourcing to ODM providers is efficient and time-saving. It enables the customers to get the product design like the large private label companies in such cases.
FAQs about OEM vs ODM
Is the Original Equipment Manufacturer Fake?
Many customers consider OEM products fake because of the changed logo. But, in reality, these are the exact copies of the original products.
Are There Any Other Terms than OEM and ODM?
Besides ODM or OEM, JDM services coach the OEM services. Also, there are CEM and OBM services.
Which One is Easy to Buy?
OEM is easy to buy as it offers the flexibility to the customers to manufacture the product. They can also customize the budget plan.
How to Identify the Right ODM & OEM Supplier？
You can identify the right ODM or OEM supplier by checking the services or reviews. You can also check the reputation of the supplier before selecting a supplier.
What’s Next
Regardless of some differences between ODM and OEM services, these services can help you create the best product design while maintaining the market share.
Start the Manufacturing Process Right Now!
If you have options of OEM and ODM for the best manufacturing processes. You can contact us to get the best market share from the manufacturing process.
