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What does OEM stand for?

    People often use the term “OEM” to talk about certain products, but not everyone knows what it means.

    In this article, we’ll talk about what an OEM product is, what makes it different from an ODM product, and how they compare to each other.

    OEM: meaning and description

    OEM stands for Original Equipment Manufacturer, which means a company that makes products, parts, or components that are used by another company, called the “parent company,” which puts its logo on them. On the other hand, the “Parent Company” can use OEMs to make products with all or almost all of the parts made by suppliers (OEMs) without having to get involved in the production process.

    OEM products, then, are those with custom designs that are made with standard parts but have the name of the company that sells them on them. Materially, these products are made by OEM manufacturers for the “parent company,” which is in charge of packaging and selling them again.

    This type of production is used in a lot of different ways. For example, standard electronic cameras can be used to make a camera with an original external mold. Electronic components for hardware or smaller parts of bigger products, like a car dashboard, can also be made by companies outside of the company.

    Many big companies and well-known brands use this method by sending some of their production to China, which is now known for its highly specialized manufacturing sector. The reason for this business decision becomes clear quickly: by working with factories that make OEM products, big companies can save time, money, and energy and hand off part of the production process.

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

    When you want to buy products or parts from China, you can buy from OEM companies or ODM companies. Before deciding which one to use, it’s best to know what the differences are and what your business needs are.

    In fact, you usually don’t want to buy OEM products unless you want to make a new design. MDG products are often the best choice for many buyers, especially SMEs and startups.

    ODM stands for “original design manufacturer.” This is a company that makes things and sells them to other companies that will sell them under their own brand. So, ODM products are factory products with a custom brand. These are finished products that you can buy with or without a name. Since the products are already made, the only thing that can be changed is the color or material, which is up to the supplier.

    In short, we can say:

    OEM products are ones that are made to order but use standard parts.
    ODM products are made in factories and have custom branding.
    Because of this, OEM products are more expensive and take longer to make than ODM products, which are made based on models that the supplier already has. This means that the materials are standard, but you can still get your brand engraved on them and sell them with your name to create your own brand.

    Because they make ODM products all the time, Chinese suppliers can make them faster and sell them for less than OEMs. Chinese factories are like labs: if you want custom-made goods, they can make them, but you have to give them exact instructions that leave no room for doubt or room for action. If you don’t, you might get goods that are different in a few or many ways from what you ordered.

    So, if you focus on ODM products, you use a model from the manufacturer that lets you make changes. The production chain already knows what to do, and the molds have been used for a long time. Another benefit is that you can buy fewer products than you would have to if you asked for OEM products.

    Don’t think, though, that the choice of MDGs means you’ll be getting products you’ve already seen and read about. The number of models Chinese manufacturers can show you might surprise you, and many of them are already in use by companies that sell big brands.

    Do you want to order OEM or ODM products?

    No matter what industry you work in, if you buy directly from China you can get good goods at really good prices.

    In general, ordering your goods from China can help your business run more smoothly and save you a lot of money compared to buying the same amount of goods from a supplier in the West.

    Whether you choose ODM or OEM depends on what you want to do.

    Usually, you have three options: buy:

    products that are made to order or that are completely original in every way
    OEM products are those with an original design that are made by putting together standard basic parts. ODM products, on the other hand, are already-made items that can only have their color and logo changed.
    Most of the time, the second choice is better because:

    Compared to OEM products, they are cheaper and take less time to make because the production chain is already set up. The supplier can also use materials he already has or that his subcontractors have, so he doesn’t have to wait for you to give them to him. As a result, the MOQ (minimum order quantity) that the supplier will ask you to meet is lower than that of OEM products, which we explained in the last point. You can also choose from a wider range of products.

    How to buy ODM products from China also in dropshipping

    If you’ve read this far, it’s clear that you’re interested in the subject and that you’re looking for a good deal. If you are also wondering how to get in touch with a Chinese supplier, we have the answer in one word: Dropship-empire.

    Dropship-Empire is an online platform that can help you buy products from China and ship them in any way you want: dropshipping, wholesale, or Amazon FBA.

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