The Definition Of Original Equipment ManufacturEr (OEM)

Content source: How To Prepare For Developing Shoes
OEM (Original Equipment Manufacturer) is often referred to as “contract manufacturing.” OEM is also known as “commissioned production,” “commissioned processing,” “famous brand manufacturing,” “production outsourcing,” etc. This kind of cooperation is called OEM that entrust other manufacturers of similar products to produce through contracting orders. The ordered products are bought out at a low price and directly labeled with their brand trademarks. The manufacturer who undertakes the processing task is called an OEM manufacturer, and the products they produce are OEM products.

OEM refers to a current popular mode of production. A buyer provides equipment and technology. The manufacturer is responsible for production, workforce, and space, and a buyer is responsible for sales. OEM shoe manufacturers usually have a large and cheap labor force and provide the commission services for the manufacture and assembly of products required by the international market.

The OEM transaction can be viewed as a relationship between sales and purchase. From the buyer’s point of view, it is the act of outsourcing production and supplying to the market. From the supplier’s perspective, it is a transaction in which the supplier produces the brand products according to the buyer’s requirements. The buyer’s sales channel and brand and the supplier’s manufacturing constitute the product’s overall competitive advantages, bringing practical benefits to both sides.

The above statement is more professional. Here is an example for you to easier understand what OEM is.

OEM: A design, B production, A brand, A sales == OEM, OEM production, other people’s technology and brand, the factory only produces.

The Definition Of Original Design ManufacturEr (ODM)

ODM (Original Design Manufacturer), also referred to as “private labeling.” It relates to a production method in which a buyer entrusts a manufacturer to handle the whole process from design to production. The final product is labeled with the buyer’s trademark and sold by the buyer. In other words, it means that one company designs and produces a product according to the specifications of another company.

ODM refers to that a manufacturer design a product that other companies may adopt in some cases. Under the circumstances, does it require using the other companies’ brand name for production, or can the product be produced after the design is slightly modified? This allows other manufacturers to reduce their own development time. Manufacturers engaged in the design and manufacturing business are called ODM shoe manufacturers, and the products they produce are ODM products. There may offer manufacturers’ product design to the brand owner in a buyout or non-buyout.

The above statement is more professional. Here is an example to make it easier for you to understand what ODM is.

ODM: B design, B production, A brand, A sales == ODM. It is the factory’s products, other people’s brand.

OEM&ODM

Both OEM and ODM are cooperation models between the brand and the manufacturer in product design and manufacturing. OEM products are created for brand manufacturers. After production, the products can only be labeled with the brand name and can never be produced again with the manufacturer’s name. However, it depends on whether the brand enterprise has bought out the products’ copyright in terms of ODM products. If not, the manufacturer has the right to organize the production itself, as long as there is no design identification from the company.

OEM&ODM are commonplace in industrial society. Because of manufacturing costs, transportation convenience, save development time, or other aspects, well-known brand enterprises are generally willing to find OEM or ODM. When looking for the OEM or ODM, famous brand enterprises also have to bear many responsibilities. After all, the products are labeled with their brand. If the product quality is not good, it will impact the company’s brand. Therefore, the brand enterprises will undoubtedly carry out strict quality control during the commissioned processing. 

Therefore, when you choose a China shoe factory, my advice is to find the shoe factory with full inspection personnel on the assembly line so that each pair of shoes can be inspected. It is better to ask a third-party shoe testing agency to test shoes in the shoe factory. In this way, you can know whether the shoe factory’s shoes are in line with the quality inspection standards. Therefore, we can guarantee the quality of shoes to the maximum.

In summary, the differences between OEM and ODM are shown in the following table, which helps you to select the type of factory you are looking for.

So, I believe you should understand what are OEM&ODM now. If you are interested in custom shoes and private label design shoes, you need to choose the shoe factory that provides OEM&ODM services. And our XIN DE SHENG SHOE FACTORY can provide OEM&ODM services. If you would like to custom shoes or look for private label shoe manufacturers, you can contact us by email: andy.h@topfactoryshoes.com.