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What's the difference between OEM and ODM? | iamotus

June 17, 2022


OEM and ODM have often been found in the design and production industries, and people stay confused as they are pretty similar regarding the distinctions between the two names. The words ODM, OEM, describe various configurations of fabrication activities. The distinction between these production systems is the extent to which a brand owner undertakes design, engineering, and production activities.

If you have an idea for a new product and are looking for a reliable manufacturer to partner up with and bring your products to market. Before you contact a manufacturer, you’ll need to understand the key differences between these two unique business services, and this article covers everything you need to know.

What is ODM manufacturing?

An ODM, or “original design manufacturer,” is a company that has the capabilities to design, develop, manufacture and sell products themselves.  ODM often designs and develops products independently, or in collaboration with a client. All you need to do is give them the idea of the design you want, and they can also show you their existing product lines, and you can choose from them.

ODM Advantages

1. You don’t need to make large upfront investments for R&D and setting up a custom production line.

2. You can save a lot of capital because you don’t need to control the tooling costs.

3. you can focus more on marketing your products.

4. don’t have to worry about expertise or resources that meet your design specifications.

5. Save money even if you are purchasing low volumes of products. This is because ODMs usually produce significant quantities to sell in smaller lots.

6. Usually faster to market than OEM

ODM Manufacturing Industries

There are many industries that partner with ODM manufacturing firms, ODM products are more common in more R&D and capital intensive industries.

ODM More common industries: Electronics; Machinery; Medical devices; Kitchen utensils

ODM Less common industries: Clothing; Home textiles; Accessories

What is OEM manufacturing?

OEM stands for “original equipment manufacturer,” which refers to a company is in charge of developing, constructing, or selling the product to another company or company which is responsible for the distribution of its product following its standards. For example, the Apple iPhone was created and built by Apple and subsequently licensed to create Foxconn.

If you are a manufacturer and don’t have the capabilities to design, create, test, and brand products, you should offer OEM manufacturing and provide basic manufacturing services to help businesses mass-produce products.

OEM Advantages

1. You will own all intellectual property rights. Your product specifications will also be protected from copyright infringements.

2. You can quickly get quotes from manufacturers because you will have detailed specifications and designs.

3. You have a better bargaining position and can easily switch to other suppliers.

4. It may be more difficult to copy your product

5. Less risk in manufacturing because a working prototype is available

ODM vs OEM Which should I choose?

It depends on your needs. Do you already have a finished product design ready for manufacturing? If so, an OEM is a right partner for you.

If you are considering developing a product or are already in the process, we generally suggest working with an ODM partner. We believe that getting your manufacturing partners involved right at the beginning of the process is a best practice you should follow.

How to Start Your OEM and ODM Service

If you’re thinking of starting an OEM or ODM business, please just contact usfor more details

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