OEM (original equipment manufacturer) refers to companies that make products for others to repackage and sell. Resellers buy OEM products in bulk, minus the costly retail packaging that comes with individually sold units. The product itself is essentially the same as its more expensive, retail-packaged sibling. OEM products are used in many industries, but are perhaps most prevalent in electronics.
Generally, dealers of OEM products add something of value before reselling the merchandise. An OEM vendor that does this is known as a "value added reseller" (VAR). A VAR might build themselvs brand, logo,components, sub-systems, or systems from quality OEM parts. OEM goods allow VARs a wide range of creative marketing choices, which permits smaller dealers to be competitive in the marketplace.
What is the Difference between OEM vs ODM
More often than not, the term ODM and OEM are used quite interchangeably although the latter are more commonly in used.
However, there is a difference between these two terminologies:
- An OEM (Original Equipment Manufacturer) initiates the design of the products through its in-house engineering specification and sells the products to another company for branding, distribution or retailing.
- ODM (Original Design Manufacturer) firms design the schematic of the products based on the client's specification and built these products. To articulate its capabilities, ODM often built prototypes based on market hot trends to demonstrate their mastery in particular technology or form factor areas.