OEM vs ODM Service: What are the differences between OEM and
Release time：2022.10.13
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OEM vs ODM: What are the differences between OEM and ODM?
OEM and ODM are two important terms widely used in the manufacturing sector. Often you will see people trying to compare these two types like using OEM vs ODM. Both these terms are correlated and it can be confusing at times. Some startup companies seldom have the resources to design and manufacture products. In such a scenario, these companies outsource the production of certain components to contract manufacturers, also known as the OEM and ODM manufacturing firms.
What is OEM?
OEM or the Original Equipment Manufacturer designs a product based on the buyer’s specifications. When a company manufactures an OEM product-the designs, functions, colors and materials can be customized according to the requirements of the buyer. OEM manufacturers seldom design any product on their own. All the products are designed according to the data provided by the buyer. OEM companies are only responsible for manufacturing these products. Buyers can then sell the finished products in their own brand name. The services that the companies provide are also referred to as OEM services. Usually, the companies are private label manufacturers who are able to print logos on the product for you in the product that they manufactured. In the smart home industry, TCO Smart is the OEM manufacturer that provides smart locks and smart IOT accessories manufacturing services to many smart home brands . It is quite pertinent to choose a reliable OEM manufacturer as you are providing confidential product spec and blueprints to another company. if you choose a smart home OEM manufacturer, you can consider TCO Smart because they have many experiences in OEM.
What is ODM?
ODM or the Original Design Manufacturer designs and manufactures products on their own. These companies are in charge of R&D, concepts, and manufacture of the products. Many companies approach an ODM when there is a dearth of resources to build product designs. When you approach an ODM company for services, the product designs and specifications are chosen by the company and there is hardly any specification that can be altered largely. However, some minor changes can be made if it is a bulk order. TCO Smart also has many experiences to cooperate with big customers in many countries.
OEM Vs ODM
OEM companies manufacture products based on the designs provided by another company. The OEM manufacturer only manufactures what the buyer requires. In this manner, both the companies advantage from the strengths of one another. In some cases, companies seldom have the required machinery to manufacture high volumes of products within the stipulated time frame, and outsourcing the production may be cheaper compared to in-house production. So these companies outsource the production to an OEM company.
On the other hand, an ODM company creates the designs and manufactures the products themselves. These products are often known as Blank Products or White Label. It can be rebranded and sold by the buyer company as their own products. so in fact, an ODM company also can be an OEM company, but an OEM company is not sure an ODM company.
DO YOU PREFER TO WORK WITH AN OEM OR AN ODM?
This is particularly important if, as the importer, you want your own style that is different from what is already on the market.
A professional Manufacturer can bring the following advantages:
· We do not focus on production only, not on distribution; there is less risk of having a CM sell to your competitors or to your customers (but that is a real risk with an OEM)
· The relationship is easier to manage since we focus on production
· You might be able to negotiate for transparency of sub-suppliers, which means you can’t be held hostage very easily
Working with an ODM supplier
In most cases, the buyer will request changes. There is often a MOQ (Minimum Order Quantity) constraint based on the cost of processing those changes, and that MOQ can generally be negotiated.
Here are a few examples of changes:
· Place the customer’s logo on the product
· Change a material’s color
· Different dimensions (especially when a mold is involved)
· Different features or performance.
OEM and ODM are two important terms widely used in the manufacturing sector. Often you will see people trying to compare these two types like using OEM vs ODM. Both these terms are correlated and it can be confusing at times. Some startup companies seldom have the resources to design and manufacture products. In such a scenario, these companies outsource the production of certain components to contract manufacturers, also known as the OEM and ODM manufacturing firms.
What is OEM?
OEM or the Original Equipment Manufacturer designs a product based on the buyer’s specifications. When a company manufactures an OEM product-the designs, functions, colors and materials can be customized according to the requirements of the buyer. OEM manufacturers seldom design any product on their own. All the products are designed according to the data provided by the buyer. OEM companies are only responsible for manufacturing these products. Buyers can then sell the finished products in their own brand name. The services that the companies provide are also referred to as OEM services. Usually, the companies are private label manufacturers who are able to print logos on the product for you in the product that they manufactured. In the smart home industry, TCO Smart is the OEM manufacturer that provides smart locks and smart IOT accessories manufacturing services to many smart home brands . It is quite pertinent to choose a reliable OEM manufacturer as you are providing confidential product spec and blueprints to another company. if you choose a smart home OEM manufacturer, you can consider TCO Smart because they have many experiences in OEM.
What is ODM?
ODM or the Original Design Manufacturer designs and manufactures products on their own. These companies are in charge of R&D, concepts, and manufacture of the products. Many companies approach an ODM when there is a dearth of resources to build product designs. When you approach an ODM company for services, the product designs and specifications are chosen by the company and there is hardly any specification that can be altered largely. However, some minor changes can be made if it is a bulk order. TCO Smart also has many experiences to cooperate with big customers in many countries.
OEM Vs ODM
OEM companies manufacture products based on the designs provided by another company. The OEM manufacturer only manufactures what the buyer requires. In this manner, both the companies advantage from the strengths of one another. In some cases, companies seldom have the required machinery to manufacture high volumes of products within the stipulated time frame, and outsourcing the production may be cheaper compared to in-house production. So these companies outsource the production to an OEM company.
On the other hand, an ODM company creates the designs and manufactures the products themselves. These products are often known as Blank Products or White Label. It can be rebranded and sold by the buyer company as their own products. so in fact, an ODM company also can be an OEM company, but an OEM company is not sure an ODM company.
DO YOU PREFER TO WORK WITH AN OEM OR AN ODM?
This is particularly important if, as the importer, you want your own style that is different from what is already on the market.
A professional Manufacturer can bring the following advantages:
· We do not focus on production only, not on distribution; there is less risk of having a CM sell to your competitors or to your customers (but that is a real risk with an OEM)
· The relationship is easier to manage since we focus on production
· You might be able to negotiate for transparency of sub-suppliers, which means you can’t be held hostage very easily
Working with an ODM supplier
Selecting an ODM manufacturer is rather straightforward. You simply need to look for suppliers that have already made products that you can buy and sell on your market.
In most cases, the buyer will request changes. There is often a MOQ (Minimum Order Quantity) constraint based on the cost of processing those changes, and that MOQ can generally be negotiated.Here are a few examples of changes:
· Place the customer’s logo on the product
· Change a material’s color
· Different dimensions (especially when a mold is involved)
· Different features or performance.
