Both the terms OEM and ODM are quite popular among manufacturing businesses in many fields. So what are their advantages, disadvantages and differences in business development strategy? Let’s find out with THT Vietnam in this article. Learn about OEM and ODM OEM (Original Equipment Manufacturer) or also known as original equipment manufacturer. With this form, […]
Both the terms OEM and ODM are quite popular among manufacturing businesses in many fields. So what are their advantages, disadvantages and differences in business development strategy? Let’s find out with THT Vietnam in this article.
OEM (Original Equipment Manufacturer) or also known as original equipment manufacturer. With this form, the enterprise will carry out production work according to the design, pre-set specifications and sell the product to the market. Simply put, the OEM company will be responsible for manufacturing and distributing the product. At the same time, the product brought to the market will carry the brand name of the party ordering the production.
For example, a detergent manufacturing company orders an OEM factory to produce detergent for its company. The detergent manufacturing company will provide the OEM factory with information about the ingredients, fragrance, color, packaging, etc. of the detergent product. This includes the detergent manufacturing company’s brand name. The OEM factory will produce the detergent according to the detergent manufacturing company’s requirements, including printing the detergent manufacturing company’s brand name on the product.
OEM (Original Equipment Manufacturer)
ODM (Original Design Manufacturer) is also known as original design manufacturer. This term is understood as a business that will undertake the design and construction of products according to requirements. ODM companies will research and develop products, manufacture and package them. Then, other companies can buy ODM products and put them on the market under their own name.
ODM (Original Design Manufacturer)
The basic difference between OEM and ODM is that OEM companies participate in the actual production process, while ODM companies only design and do not directly participate in production. Below are the specific advantages of OEM and ODM
The advantage of the OEM strategy is that it allows partners to receive products without having to build a new factory. This can reduce production costs. With OEM, the issue of choosing a reliable manufacturer is always a top priority.
OEM helps companies not have to build factories, focus on market development, business and marketing activities. Thereby helping businesses increase revenue and profit.
With the OEM model, companies can quickly expand their products and services into new markets without investing much in resources and time.
OEM allows the company to focus on other important aspects such as marketing, sales and customer service.
The benefit of using an OEM is that you can easily manage your supply at scale, especially when you have multiple suppliers at the same time.
OEM helps customer brands add new products or expand product lines without having to invest too much in research and development.
With ODM, you don’t have to worry much about copyright and technology theft. But because the product is made according to the partner’s specifications, it may cause difficulties when you start production.
ODMs usually have lower minimum order quantities, which makes them more attractive to customers. Since ODMs provide all the important functions such as design, manufacturing, and branding for a product, the cost of developing a product is often much lower than the cost of working with an OEM.
With ODM, customers do not need to spend much time and energy on the research and development of new products. This helps businesses save and optimize their resources.
ODMs often incorporate new technology and modern design trends into their products. This helps businesses increase their competitiveness with their competitors in the market.
Customers can own the brand of the product, increase brand value and create differentiation in the market.
ODM is responsible for the design and manufacturing process, reducing risks for customers when implementing new products.
ODM is responsible for both the design and manufacturing process of the product, providing a complete solution for customers. By having the design and manufacturing process in place, ODM helps the product to be launched quickly in the market.
The Difference Between OEM and ODM
The companies that accept processing are usually those with a lot of manufacturing experience and modern facilities. This helps the process of bringing products to market more quickly and effectively.
For businesses that do not have much experience in the industry, ODM and OEM services are the best choice because they avoid risks. Instead of investing in factories, machinery, and workers, companies using OEM and ODM services only spend money on product sales. Therefore, outsourcing is the most useful choice, helping to save investment costs, especially for businesses that are new to the industry.
Both OEM and ODM bring advantages to businesses, but each business will have its own development goals and strategies. So please consider carefully before choosing one of these two forms.
THT Vietnam is one of the leading OEM/ODM enterprises with more than 20 years of experience in the field of manufacturing and trading cosmetic products. The company owns a modern, closed factory that meets ISO: 9001 standards. THT Vietnam’s staff are experienced experts in the field of cosmetic chemicals, capable of meeting all customer needs.
In addition to laundry detergent, THT Vietnam provides processing services for a variety of products including dishwashing liquid, detergents, and other products.
Therefore, THT Vietnam is the top choice for businesses that intend to process cosmetic products with high quality and reasonable prices.
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