What’s the Difference between ODM and OEM?

difference between oem and odm

To guarantee that your intellectual property is secure and specifications are followed correctly, you must create an agreement between both parties beforehand. OEM manufacturing, or Original Equipment Manufacturer production, generates goods or components to be sold by a different provider under their name. The original manufacturer produces and sells the item directly to another business that will resell difference between oem and odm it under its label. In other words, you can have confidence in the quality of your purchases without having to manufacture them yourself. You save valuable time with ODM since you can get a final product without engaging yourself in the tiresome project process. In OEM, you have to develop the product yourself, for example, designing and finding a suitable manufacturer to produce your product development.

difference between oem and odm

OEM factories often outsource certain specific processes that their personnel don’t specialize in. In this way the factory performs a higher-level coordinating function for a brand in that several processes are taken care of under the one management regime. The cosmetic materials, ingredients, and packaging designs are confirmed. A factory identifies the most suitable formula for your needs and manufactures a pre-production sample to suit the customers’ needs. The customer receives the model to test and suggest modifications or give the go-ahead for massive production.

Example of an OEM business

In addition to testing the product for specifications, age and usage testing can show failures in the manufacturing process. Whether your needs include design work or manufacturing only, your end product will be stronger as your manufacturing partner has experience in that specific field. They own the product IP and are focused on R&D and market expansion. EMS are the design, manufacturing, supply chain and logistics experts, focused on helping OEMs fast track their design process and scale production to conquer new sectors and markets. It’s worth noting that in the last few years these firms were pivotal in ramping up the speed of development, production and distribution of the vaccines that halted the Covid-19 pandemic.

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There are standard products such as beer bottle sleeves, which already exist in various companies. A company only has to make a few modifications to the existing product. After all these specifications, you will need to hire a designer to create an appealing glass design.

Is OEM Original or Fake?

Because of this, OEM designers have to guard their designs as intellectual property, lest it be copied and sold by another company for a lower price. On the other hand, the ODM model is more suited for businesses with expertise that goes beyond making products, and have big ideas for their own unique ways to capture market attention. This often suits companies that already have great product ideas but don’t necessarily want to invest the marketing budget in building their own brand. They can package up their unique IP and sell it on to consumers via the brands they already know and love. That said, not all ODMs operate exclusively as white label manufacturers. Some offer a custom product service for clients who have great ideas but lack the resources to design them.

Some companies might have the needed machinery to manufacture products in high volume or deliver the products within the set time. Trade shows like Canton Fair and Global Sources are an example of ODM manufacturing. The tradeshows have elaborate booths that factories use to display their designs so that potential buyers can see them and buy them. The buyers may then sell the products with minimal customization or without changing anything. For that reason, manufacturers outside the country are mainly contract manufacturers. As the definitions make apparent, ODM creates and produces at its discretion, whereas OEM is an entrepreneur who carries out another business’s design specifications.

Is Apple OEM or ODM?

ODM stands for Original Design Manufacturer and refers to a business model in which companies design, produce, and manufacture a product that is then sold to another company that markets it as their own. This arrangement may involve products bearing the original manufacturers’ brands or logos, although not always. The OEM, in this case, a company selling laptops under its name but not producing them, transfers the design and manufacturing process to an ODM.

  • As such, buyers don’t have to invest in original chemical formulations.
  • Due to their expertise in several areas of product or manufacturing techniques, OEM suppliers can provide higher-quality products than you can typically produce internally.
  • The manufacturer will also need time to set up the manufacturing and source the molds and tools.
  • The agents have many resources and information on the best supplier or manufacturer to meet a client’s needs.
  • In this sector, Original Equipment Manufacturer (OEM) commonly refers to businesses that manufacture processing equipment or packaging for others’ use within their manufacturing processes.

ESCATEC have a long history of providing design and manufacturing solutions to world-renowned OEMs. We realise their ideas, from concept to delivery to after-sales service, and offer them the specific solutions they need. The computer software industry is also in high demand for OEM services. Many start-ups and entrepreneurs need web developers and programmers to create websites.


Because you get to choose your own products, you can also select and build equipment and processes that best increase the efficiency of producing those products. As you become more experienced and, perhaps, specialised, you will likely be able to continue to improve this efficiency with further upgrades such as automation and specially designed manufacturing software. Depending on the client’s requirements, an OEM may produce a wholly custom new product or a product from the OEM’s range that has been heavily customised. OEMs also sometimes offer guidance on product design to ensure the end result can actually be manufactured.

OEM suppliers manufacture goods according to the design preference and specifications of the customer and therefore it is the responsibility of the buyer to conduct the research and development. DHgate was launched in 2004 and it is among the cheapest wholesale websites for Chinese suppliers. The site serves suppliers in China and buyers from all parts of the world.

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