ODM vs. OEM: What Are The Differences?
Many people get confused when they hear the terms between ODM and OEM. While both are related to the manufacturing industry. Both sounds the same, but they are different from each other.
ODM stands for Original Design Manufacturing, and OEM Stands for Original Equipment Manufacturing.
What is OEM?
OEM stands for Original Equipment Manufacturer, are companies that manufacture a product based on the product’s owner specifications. All OEM product design, functions, appearance and raw materials are customized according to the brand’s owner requirements.
Benefits of OEM
- Customize the whole product. Including: boxe, bottle, formula, logo and formula
- Mass produce the product on a consistence quality
- Produce the product more inexpensively
- One stop solution of your product
- Good customer service
- Warranty of product
What is ODM?
ODM stand for Original Design Manufacturer companies that design and manufacture products for their customers.
ODM makes it easier way for you to get a product to market, without having any complicated design. In this case, the manufacturer has created the specification of the product.
Benefits of ODM
- With low minimum order quantity
- Faster solution compare to OEM
- With low price for start up
- One stop solution of your product
- Good customer service
- Warranty of product
ODM vs. OEM
To understand the difference between ODM and OEM, let’s use an example.
Let’s say you are want to start a cosmetic business, but you need help to develop for those products. You have all the idea, specifications and the blueprint to create your product. So you bring that idea to an OEM manufacture, they will produce the product according to your idea and make it lawful. So now all you have to do is marketing, branding, distribute and sell the product to the public.
Secondly, if you doesn’t have any idea or specifications of the product that you want, you can choose for the ODM service. The manufacturer will propose their formula and design for you. The advantage for ODM is that, it allows you to get the product faster and easier. Manufacturer have their own product developers, and are also capable of designing your idea, something an OEM doesn’t do. When using an ODM service you may not have much of a say in the product design and specifications.
Besides, you may not maintain the intellectual property of the product, and in most cases, you will have to work out a deal that works for both parties
Summary
OEM stands for Original Equipment Manufacturing while OEM refers to Original Design Manufacturing.
An OEM service is manufacturing a product according to your own specifications, design and blueprint.
With an ODM service is ready formula and design. In some cases they may maintain intellectual property of the product design. You are only responsible for branding and selling the product.
About OEM / ODM manufacturers
OEM manufacturers never design any product on their own, they only will guide product’s owner how to design a product. OEM manufacturers are only responsible for producing the product, once the OEM product is finished, the brand’s owner can sell the product with their own private label.
It’s very common to use OEM manufacturers in industries such as cosmetics, electronics, dietary supplements, automobile industry and many more. Which mean brand’s owner no need to own a factory to produce their product.
However, you need to choose a reliable OEM manufacturer because you need your product to be reliable, consistence quality and effective product
Benefits of OEM / ODM Manufacturers
- They are expertise to build the product
- They can mass produce the product on a regular basis
- They can build the product more inexpensively
- They know most trending products nowadays
- Good customer service
- Warranty of product
- Providing sample before production
