What's the Difference between ODM and OEM? - Guided Imports

OEM stands for Original Equipment Manufacturing, and refers to products that are fully designed by one company and then licensed out to a ... ContactUs Login Sourcing QualityControl Shipping Menu Sourcing QualityControl Shipping Search Close ODMvs.OEM:What’stheDifference? SamBoyd August24,2016 You’veprobablyseentheterms“ODM”and“OEM”before.Andchancesare,whereveryou’resittingrightnow,you’rewithinarm’sreachofseveralODMandOEMproducts.UnderstandingthesetermsandthedifferencebetweenthemisanimportantstepinsettingyourselfuptobeaChinasourcingpro.  OriginalDesignManufacturing ODM,ororiginaldesignmanufacturing,isalsoalsoreferredtoas“privatelabeling.”Thisiswhereanimporterselectsanalready-existingproductdesignfromafactorycatalog,makesafewsmallchangesandsellsitundertheirownbrandname.Changescanincludethingslikepackagingorproductbundles,colorsandbranding,andsomelimitedadjustmentstocomponentsorfunctionality TwoODMlaserpointercattoys.Whilebothproductsaremanufacturedaccordingtothesamegeneraldesign,eachiscustombranded,coloredandpackagedaccordingtoeachbuyer’sspecifications. ODMdoesn’tjustrefertoelectronicsthough.EvernoticehowmostAmericanChinesetake-outmenuslookthesame?ThisisanotherexampleofODMmanufacturing.Amanufacturer(inthiscase,aprinter)keepsatemplateonfilethatbuyerscancustomizetofittheirspecificneeds. OriginalDesignManufacturing TheadvantageofODMisthatitsparesimporterstheneedtoinvestmillionsofdollarsintoresearchanddevelopmentinordertocreateanewproductfromscratch.Whyreinventthewheelwhenyoucanjustimproveonethatalreadyexists?Andbyeliminatingorvastlyreducingtheexpenseofproductdevelopment,importerscanfocusmoreonmarketingstrategies. ThedisadvantageofODMisthatitcanbemoredifficulttodifferentiateyourproductfromcompetitors’productsthataremanufacturedaccordingtothesamedesign.AlthoughODMrequireslessstart-upcapital,pricecompetitiontendstobesteeper,resultinginslimmerprofitmargins.Forexample,acustomerlookingtopurchaseanODMlaserpointerismorelikelytochoosebasedonpricethanbasedondifferencesincolororbrand.ToreallydifferentiateyourODMproductfromtheothersonthemarket,whilestillremainingcompetitivepricewise,canrequireasignificantamountofcreativity.  OriginalEquipmentManufacturing OEMstandsforOriginalEquipmentManufacturing,andreferstoproductsthatarefullydesignedbyonecompanyandthenlicensedouttoamanufacturertoproduce.TheAppleiPhone,forexample,wasinventedanddesignedbyApple,andthenlicensedouttoFoxconntoproduce.Asaresult,theiPhoneenjoysahigherlevelofproductdifferentiationbecauseitsdesignisonlyavailabletoAppleandits licensedmanufacturer.ManyotherbrandnameelectronicsandappliancesareOEM.Customdesignedclothing,asopposedtoagenericgarmentwithacustomlogo,isanotherexampleofOEM.ThemainadvantageofOEMisthatthedesignerretainstotalcreativecontroloverthedesign.Whereas ODMproductsarerestricted toapredetermineddesign,OEMproductscanbemadeaccordingtoanyspecifications.Theonlylimitationisthedesigner’simagination(aswellasbudget).ThedisadvantageofOEMmanufacturingisthatitismuchmoreresourceintensive.OEMdesignersofteninvestmillionsofdollarsintoresearchanddevelopmentoverseveralyearsinordertocreateuniqueproducts.Becauseofthis,OEMdesignershavetoguardtheirdesignsasintellectualproperty,lestitbecopiedandsoldbyanothercompanyforalowerprice. SellingonAmazon?YouprobablywantODM ForreaderswhohaveorarelookingtostarttheirownFBA(FulfillmentByAmazon)business,ODMisbyfarthemorecommonpath.Mostofusdon’thaveR&Ddepartmentsworkingaroundtheclockforus.And,ifyoudohaveawinningOEMidea,privatelabelsellingisagreatwaytogeneratethestart-upcapitalandexperienceyou’llneedtogetitofftheground.Ifyou’reinterestedingettingstarted,orinimproving thebusinessyou’realreadydoing, giveGuidedImportsatry.Nobodymakesprivatelabelsourcingandmanufacturingeasier! AdditionalResourcesforAmazonSellers GuidedImportsworkswithhundredsofAmazonSellersperyeartohelpthemsafelysource,manufacture,QCandshiptheirproductstobesafelyacceptedbyAmazonWarehousesthroughouttheworld.Here’safewservicesandresourcesforAmazonsellersthatmaybeofinteresttoyou. DetailedGuide:HowtoShipfromChinatoAmazonFBA QCService:AmazonFBAPre-ShipmentInspection FBAPrepServices:FBAPrepinChina AreYourManufacturinginChina? Wearetheleadingsourcingserviceforhigh-growthcompaniesfromtheU.S,Europe,andbeyond. GetaQuote Company About Blog Resources Services Sourcing QualityControl FreightForwarding MostPopularContent ODMvs.OEM HowtoShiptoAmazonFBAfromChina ShippingfromChinatotheUS BlogCategories Sourcing&Manufacturing QualityInspection&Control ProductCompliance Incoterms AmazonFBA ShippingandFreighting ContactUs Officesin:China,Singapore,&Thailand U.S:+1215207-0109 S.G:+653138-5444 [email protected] Sitemap Copyright©2020GuidedImportsPTELTD.AllRightsReserved Privacy&Legal ContactUs