OEM is a company whose equipment, goods, or products are used in the products of other companies that sell the finished products to users. In the computer industry, OEM can be defined as a company that buys computing products, incorporates them into their products, or rebrands them into a new product for sale.
The Differences Between OEM and ODM
ODM is the acronym for ‘Original Design Manufacturer’. While ODMs do manufacture equipment, they rely on product specifications or designs coming from another company.
An OEM is free to produce equipment based on its own specification and designs, and the manufacturing equipment bears the brand name and logo of the OEM. On the other hand, ODMs must follow the design specified by the company that has outsourced manufacturing to the ODM. The manufactured equipment bears the brand name and logo of the outsourcing company instead of the ODM. The main advantage of ODMs is the low cost of production associated with outsourcing.
Why are OEM Products Less Expensive?
Products from an OEM are normally cheaper thanks to economies of scale. As the company partners with others to manufacture goods in large numbers, both the price and production time are significantly reduced. However, you need to verify what you’re getting when you purchase a product from an OEM. While the products are cheaper and deliver the same features and performance, you may not receive some of the “extras” like tech support, which would normally be handled by another company.
