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What is an OEM product? Features and Differences with ODM

You often hear the term “OEM” referring to some products, but not everyone knows exactly what it is.

In this article we will explain what “OEM product” means, discuss their specific characteristics, and compare them with an ODM product.

OEM: meaning and description

Let’s start with the meaning of OEM: it is the acronym of Original Equipment Manufacturer, that is, a company that manufactures products, parts, or components used by other companies called “parent company” that affix their logo on them. The “Parent Company” on the other hand, with the use of OEMs, can produce products using all or almost all of the components produced by suppliers (OEMs) and often without having to enter the production processes.

OEM products are, therefore, those products with custom design that are made through the use of standard components, but with the brand of the company that markets them. These products are materially manufactured by OEM producers for the “parent company” that is responsible for packaging and reselling them.

This type of production is used in many cases, some examples can be for example the creation of a camera with standard electronic cameras, but with an original external mold, or the realization by external companies of electronic components for Hardware, or smaller parts of larger products, such as a dashboard for cars.

Many large companies and well-known brands resort to this mechanism by deploying part of the production in China that is now well known for its highly specialized manufacturing sector. The reason for this commercial choice is soon explained: collaborating with factories that make OEM products allows large companies to save time, money and energy and to delegate part of the production process.

What’s the difference between a OEM product and ODM product?

prodotti oem significato

When you want to buy products or components from China you can resort to both buying products from OEM companies, but also to ODM companies and before deciding who to rely on it is good to understand the differences and what the needs of our company really are.

In fact, unless you want to make a new design, often, you don’t want to buy OEM products. For many buyers, especially SMEs and startups, it is often best to buy MDG products.

ODM (original design manufacturer) is a company that designs and manufactures items sold to third-party companies that will market the products under their own brand. As a result, ODM products are factory products with a custom brand, finished products that you can decide to buy without a name, or with your company logo. Being ready products, the only changes that can be made are in the choice of colors or materials, made available by the supplier.

Summing up, we can say:

  1. OEM products are items with a custom design, but made with standard components
  2. ODM products factory products with custom branding

As a result, OEM products are more expensive and need more time to be produced than the ODM, which instead, are made according to models that the supplier already has ready: the materials are therefore standard, but you can still get engraved on your brand and market them with your name to create your own brand.

Chinese suppliers can make ODM products more quickly and resell them at a lower cost than OEMs because they are routine productions. Chinese factories are laboratories: if you want customized products they are able to make them, but you must give them precise specifications that do not leave room for doubt or margin for action otherwise you could find yourself having goods that differ, in a few or many details, from what you ordered.

So if you focus on ODM products, you base your products on a model provided by the manufacturer that allows you to make changes: the production chain already knows what it has to do, the molds have been in use for a long time; another advantage is that you can buy a smaller quantity of products than you would have to order if you asked for OEM products.

Don’t think, however, that the choice of the MDGs translates into products already seen and reviewed around: the number of models that Chinese manufacturers can show you could surprise you and consider that many of these are already in use for companies that distribute large brands.

Do you want to order OEM or ODM products?

prodotti oem dalla cina

 Whichever sector you work in, you can also get quality goods at really advantageous prices if you decide to buy directly from China.

In general, by ordering your goods in China, you can optimize the organization of your company and at the same time register considerable economic savings when compared to buying the same amount of goods from a Western supplier.

The choice between ODM and OEM products depends on what you want to achieve.

In general you have three choices, buy:

  1. customized products, or totally original products in all their parts
  2. OEM products, products with an original design made by assembling standard basic components
  3. ODM products, i.e. objects already made in which you can only change colour and logo.

The latter, in general, turn out to be more convenient because:

  • compared to OEM products, they have lower costs and production times because the production chain is already known and started, the supplier can also use the materials in his possession or that his subcontractors have, he must not wait for you to provide them;
  • the MOQ (minimum order quantity) that the supplier will ask you to comply with is consequently lower than that of the OEM goods for the reason that we explained to you in the previous point;
  • you can choose from a wide variety of models to which you can apply your brand, without having to produce an industrial design to make yourself.

How to buy ODM products from China also in dropshipping

create your brand with private label products

If you’ve read this far, it’s clear that you’re interested in the topic and your entrepreneurial spirit is making you sniff out the bargain. If you are also wondering how to get in touch with a Chinese supplier we have the answer for you in one word: Yakkyofy.

Yakkyofy is an online platform that can help you buy products from China and ship them however you like: dropshipping, wholesale, Amazon FBA.

With Yakkyofy, it takes just a few clicks to request a no-obligation quote. 

All you have to do is:

  • select the product you want to order (you can also send us an Alibaba link);
  • Request a customisation quote for the item; 

In a few days we will send back a quote including all the price of the product, shipping, taxes and duties that you can then decide to pay comfortably online.

From that moment, Yakkyofy will take care of everything, talking to the supplier, as well as shipping the goods to manage the customs processes, until delivery at your home. Creating a brand has never been easier! 

What are you waiting for? 

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