OEM vs ODM Manufacturing Service: Which Option is better?

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OEM vs ODM

Are you planning on launching a new product? If yes, finding the right manufacturer is crucial. However, while going on this hunt to find a reliable manufacturer, you’ll come across two terms: OEM and ODM manufacturing. If reaching out to a manufacturer, you have to understand the difference between OEM and ODM services. On the other hand, if you are planning on offering manufacturing services to global buyers, you’ll have to be clear whether you will offer OEM service or ODM service. The good news is that once you are done with this article, you’ll be able to understand the OEM vs ODM conflict and know what to look for and which business service to offer.

We will also tell you what OEM means and when you’ll need to connect with a leading OEM manufacturer. Also, the key difference between ODM and OEM. Without further ado, let’s begin!

What is ODM Manufacturing?

The ODM full form is “original design manufacturer,”. An ODM service company is capable to develop, design, manufacture, and sell products on its own. If we compare both ODM and OEM, ODM is considered a product, while OEM is considered a service. Products created by ODM companies are usually rebranded by buyers with their brand label and are sold by them. In ODM, manufacturers independently design and develop products. If you are a manufacturer and this is the best manufacturing service to test your idea and witness the response.

If you have a talented team of employees that are creative and have the potential to come up with innovative products, then ODM should be the better service for your organization to offer.

How Does ODM Manufacturing Work?

A client that works in the shoe industry comes up with a new idea that can reduce foot pain while walking. With this idea, this client will contact an ODM service provider to share the idea. Once the ODM receives this idea, they’ll arrange a meeting with the client to get a clearer picture of the demand for such a product.

The ODM will take all the information and manufacture shoes according to the demand of the client. Once the product is completed, the ODM service provider can sell this product to the client. The client can rebrand or simply sell to the final consumers.

What is OEM Manufacturing?

The OEM full form is “original equipment manufacturer,”. This business service refers to manufacturers who provide the resources to launch a product into the market. Usually, OEM service providers manufacture things that are components of the final product.

If you want to launch a new product, hiring the services of an OEM is essential in the scenario where you don’t have your factory. However, connecting with the right OEM isn’t a cup of tea. You’ll have to refer to a leading Chinese B2B marketplace that has established and reputable OEM service providers listed. To ensure that you are in talks with the best OEM service provider, you should have the following points in mind:

  • Established OEM companies will have a team of qualified professionals
  • A state-of-the-art factory
  • Credible track record
  • Ability to transform an idea into a product

Therefore, if you only require top-notch manufacturing facilities and manpower, then OEM service is what you should go for.

On the other hand, if you are a manufacturer that lacks the capabilities to create, plan, test, design, and brand products, you should start offering OEM manufacturing services to global clients.

How Does OEM Manufacturing Work?

A leading bicycle company has come up with a hi-tech bicycle. They have the design, market research, branding, and testing ready, and they need a bicycle that allows bikers to ride their bikes faster with the support of a solar battery-powered motor.

The bicycle company will find a supplier on ExportHub.com that offers OEM service and connects with them via a suitable communication network.

Once you have chosen the OEM service provider, share the requirements, design, logo, and branding, and package requirements.

OEM vs ODM: The Difference!

ODMs and OEMs offer clients with different services according to their needs. However, both play a vital role in the global economy.

OEM Service:

Pros

  • Sole Authority to sell the product
  • Customization available

Cons

  • The cost of development is high
  • High MOQ required

ODM Service:

Pros

  • Little to no product development cost
  • High MOQ required

Cons

  • Fewer customization opportunities
  • No product exclusivity

OEM vs ODM: The Final Verdict

Now that you are aware of the difference between OEM and ODM, we are sure you’ll have a better picture of which manufacturing service to go for. However, while choosing between OEM and ODM, it really comes down to the resources available. If an organization has the right budget, R&D team, and enough time to market its plan, then OEM service is the best option for you. If you lack these resources, the ODM service is what you should be investing your money into.

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