Explain in detail the true meaning of OEM and ODM, and the difference between them
Many suppliers claim to provide "OEM services" and "ODM products". Now we will explain the true meaning of OEM and ODM, and the difference between them.
Continue reading, understanding how product development and intellectual property protection procedures are different, depending on whether you have an OEM or an ODM product.
Original equipment manufacturing (OEM) definition
OEM products are manufactured according to the buyer's product specifications. For example, any product with custom design, material, size, function or color can be classified as OEM.
For some, OEMs mean products based entirely on buyer specifications, while other products classify the most minor modifications to existing ODM product designs as OEMs.
In other words, most people agree that OEM products are primarily defined as the need to produce molds (ie, injection molds) before the start of production.
Original design and manufacturing (ODM) definition
ODM products are based on existing designs developed by the manufacturer. ODM products can be the result of their own research and development of the supplier, it can be another product or brand (legal or illegal) copies.
ODM products are often referred to as "private label products" and can be branded by buyer logo.
Amazon sellers and other e-commerce companies In recent years, this practice is very common.
What does the supplier claim to provide OEM service?
"OEM service" refers only to the ability and willingness of the supplier to design the product according to the buyer.
In other words, basically Alibaba and Globalsources.com all suppliers can manufacture OEM products. In fact, this is what they used to.
So you do not need to go out to search for a vendor that actually claims to provide OEM products because it is taken for granted.
On the other hand, as mentioned in this article, looking for suppliers to provide "real" ODM products may be more challenging.
What does it mean when a supplier claims to provide an ODM product?
It is easy to misunderstand the product list in various vendor catalogs and assume that the supplier actually "owns" all of these products.
First, even if the ODM products are involved, the factory will order it. They do not have inventory waiting for buyers.
Second, the "product list" can fall into the following three categories:
a. Customer Products: These designs (and molds) may be owned by existing customers. The product only shows the past features, but the supplier may not have a fixed specification sheet, and even the product design drawings.
b. Demonstration products / counterfeit products: Some suppliers have never actually created the product picture. Therefore, the buyer must pay the tool, in which case the product can even be classified as an ODM product is problematic.
That is, it is acceptable if the digital design created by the vendor shows what they can do. But if not, it is unacceptable.
c. Vendor-developed products: Some suppliers invest in product development and tools, but this is only a small part of all the listed products in the main supplier catalog. If you have this route, remember that the supplier will have a lot of leverage, and IP is also true.
ODM products in which industries are more common?
ODM products are more common in industries such as electronics, machinery and other hardware development costs.
Therefore, in the kitchen appliances, LED lighting, etc., found that Chinese manufacturers to develop factory products more common.
ODM products are generally less in low-cost industries, and they are designed to be more focused rather than functional. This includes, for example, clothing, jewelry and jewelry.
Where can I find suppliers for ODM products?
There are no strict "ODM Vendors" categories. In all industries, basically all the manufacturers have been from the OEM, according to buyer specifications manufacturing products.
In other words, some suppliers have invested in the development of their own ODM products, while the other is only "for reference" products uploaded to its Alibaba or global source page.
The latter is not a problem, but you have to understand this fact, so as not to cause serious mistakes.
Is ODM the same as a private label?
In theory, yes. ODM and private label behind the concept is that the supplier provides a template product that buyers can use their own logo to brand.
As a result, buyers can save time because they do not need to go through a long product development process, or invest in expensive injection molds and other tools.
How does reverse engineering and ODM specifications?
ODM products are usually customized. In fact, suppliers want their buyers to offer them product specifications - even if they buy products that are called ODM products.
As mentioned above, many products are for reference only, and PDF files and spreadsheets containing original product specifications have passed.
Therefore, as a buyer, you decide:
a. List all relevant product specifications (ie size, button, collar)
b. With the supplier to confirm all available customization options (ie, what kind of fabric and color they can provide)
How do I determine if an ODM product is not another company's IP?
This is the problem of millions of dollars (litigation). We get it once a week.
As described in this guide, many "list products" are not actual ODM products, but rather photos of goods produced by other buyers in the past.
Now if these product designs are the buyer's IP?
First, you should not use the brand name and trademark you do not own, but you may already know.
Second, go to the Amazon website to see if you can find a similar product in the market. Keep in mind that not all products or features are patentable.
In many cases, this is only the name of the intellectual property brand. Yes, even if the product itself is designed by another customer.
For example, you can not patent a t-shirt. But you can patent a new LED bulb.
Thirdly, you can conduct patent searches in more detail, or ask suppliers to show documents that have their own ODM product patents.
Remember that Chinese patents are only valid in China.
Or you just go to OEM. It's not as hard as you might think
ODM and OEM Comparison Table
|Unit price||No difference||No difference|
|Injection molds and tooling||Paid for by the buyer||Paid for by the supplier|
|Product development time||1 to 6 months||1 to 4 weeks|
|Mass production time||No difference||No difference|
|Product spec sheet||Provided by the buyer||‘Reverse engineered’ by the buyer or provided by the supplier|
|Product compliance||No difference||No difference|
|Intellectual Property Ownership||IP owned by the buyer||IP owned by the supplier or another importer|
|Benefits||1. The suppliers are at their core OEMs. Often less hassle to buy OEM products.
2. You can freely customize the product (within what is technically possible to make)
3. You own the IP (as long as you protect it)
|1. Shorter product development cycle
2. Many ODM products can be customized to a certain degree
3. You don’t need to pay for the tooling
|Disadvantages||1. You pay for the tooling
2. It can take months to create new tooling
|1. Limited product selection (you get what the supplier can offer, which may only be a fraction of their list products)
2. It is time consuming and complicated to reverse engineer a specification. It can often take more time than to design an OEM product from scratch
3. Many other companies are already selling the same product, or they will in the near future.
4. You don’t own the IP of the product, and may even end up on the wrong side of an IP dispute.
ODM makes sense. We have sales of ODM products to achieve great success of customers, while others are China's top brands of agents (of course, agents exclusive contract).
Then again, in shortening the delivery time, you can spend more time discovering product specifications, redesigning drawings and searching for existing patents.
Do you want to launch your own private label or custom designed product?
From the design to the finished product may be difficult. To help you manage the whole process - from creating specifications to sampling and quality control - we created an introductory package:
a. Private Label & OEM Product Manufacturer Lists
b. Product Specification Templates
c. Product Label Samples
d. Tutorials, Video Walkthroughs and Task Lists that guide you step-by-step through the entire process