Beginners: Difference Between ODM & OEM

A short video & presentation looking at differences between Original Design Manufacturer (ODM) and Original Equipment Manufacturer (OEM).

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1. Difference Between
ODM & OEM
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2. ODM/OEM and Client company relationship
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Client Product
Company
Market
research to
validate the
project idea?
Is there
budget
available for
R&D?
Idea Validated
Idea Not
Validated
R&D
ODM
Manufacture
Product
R&D
Ship Product
to Client
Client Product
Company
NoYes
OEM
Sells Product
Manufacture
Product
Ship Product
to Client

3. Definitions and examples
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Original Equipment Manufacturer
OEMs are companies which manufacture
products based on the product design and
specifications provided by their client. The
client does all the market research, R&D and
develops its own product. But it does not
have the manufacturing capability to fulfill
the market demand. So it turns to an OEM
to do the manufacturing on its behalf.

4. Definitions and examples
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Original Design Manufacturer which will research and
develop product designs and specifications based on the
product idea brief provided by the client. In most cases,
ODMs also manufacture the product they designand which
will then be branded in the client companies name and sold
on by them in the market.
Client

5. Risks & advantages of Original Equipment Manufacturing (OEM)
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•The company client owns intellectual property of the
product/exclusivity to sell that product.
•You can customize the product
•It may be more difficult to copy your product
•Manufacturer's warranty
•Aproduction partner with years of experience
•Quality control
•Expertise
•Less expense
•Delivery of precision product/component
•Expensive research and development costs
•High minimum order quantity requirements
•Conflicts between OEMs and potential business
partners may arise.

6. Risks & advantages of Original Equipment Manufacturing (ODM)
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•Lower minimum order quantity requirements
•Save time and money on R&D because it has
already been done for you.
•ODM suppliers can design and produce the
needed product in bulk and often at a
discounted bulk price.
•Usually faster to market than OEM
•No product exclusivity
•Fewer opportunities for customization
•The intellectual property of the product is
owned by the supplier or another
company
•Other companies may start selling the
same product as you

7. Thank You
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