Manufacturing in China: Differences between OEM and ODM


Have you ever heard of the OEM and ODM, these two acronyms are words of the moment in the productive industry. While some people incorrectly assume that they can use an OEM (Original Equipment Manufacturer) for their initials in English, it is a bit different from an ODM (Original Design Manufacturer), where, while in the OEM the buyers provide the designs, in the ODM , the manufacturers are in charge of the designs and all of the specifications.

It is simple, right ?, it is, however, to understand these two types of production companies in depth, and not only by its definition, we will help you choose the right producer to meet your needs. You must keep in mind that both involve some caves where, if we look at it, it could present a risk to your business.

What is OEM?

Do you have a single product designed? Have you spent millions of dollars in search and development for that exceptional product? But do you need an involved third party to assemble and make things happen? Then, you must work with OEM companies in the production processes. This means giving them everything you have achieved from the plans and distribution channels of the finished products under your brand name. We do not have to go any further to think of good examples: Apple spends on R & D and innovation with its own product lines and Foxcon manufactures everything from its inception.

What is ODM?

Alternatively, if you want the producer to create all the design and specifications of your product, you should look for ODM companies with your industry.

If you have limitations in resources in construction and design creation, ODM companies can convert your concepts into concrete and tangible items.

Tell them what you need and the expectations of the customers of your customers and distributors. In this approach, ODMs take control of R & D, product concepts, testing and production.

More OEM and ODM badges

OEMs and ODMs are not limited to technology and consumer electronics, they also work in the area of fashion and other industries, depending on the business model and the product designed for the processes of foreign buyers. China is now one of the world’s leading destinations for the search for OEM and ODM manufacturers. With an OEM, you are the provider of the ideas and specifications, while in an ODM the concept is the opposite.

Choosing between the two depends on the type of product you want to sell, the resources you have and how much you intend to invest, and the budget at hand. More and more Chinese companies are trying to shift through the ODM model businesses which will give Chinese businesses high value in their supply chain and increase innovation.

Putting yourself in the hands of companies like MUTUAL, is a guarantee of success.

MUTUAL has been perfecting the contracting process with the factories in China for more than 10 years. We gather experience in every aspect of the industry and have helped hundreds of businesses to obtain benefits from production in China. If you need to solve doubts before starting a purchase process in China, or need any advice to start your activity with the Asian giant, do not hesitate to contact us, our global team will attend you 24 hours a day.