Everything You Need To Know About OEM And ODM Manufacturers
If you are into wholesale or retail business or maybe starting up a wholesale private label clothing line or a wholesale retailer, you must have come across suppliers or directories claiming to offer OEM services or ODM products.
But, what do these terms refer to? What is the difference between OEM and ODM? Are private label manufacturers similar to OEM and ODM suppliers?
If you are stepping into wholesale or retail business, these are crucial factors to understand before you jump into it!
We’ve highlighted pros and cons of both OEM and ODM to help you choose a better-suited supplier or manufacturer for your business.
Moreover, you’d know how product manufacturing and IP protection procedures differ as you choose either OEM or ODM products.
What is Meant by ODM?
ODM is the abbreviation of Original Design Manufacturing. An ODM product is a design or production of the manufacturer. It’s the outcome of the manufacturer’s own Research and Development or sometimes a replica of an existing product.
Here’s an eye-opener for you: ODM are also known as ‘private label products’ that are also branded with the buyer’s company logo.
For example, we at teeshirtmanufacturers also work as ODM sellers offering new start-up private labelling apparel companies to use our designs and get their name on it. Or take the example of millions of gadgets, makeup products, etc. available on Ali Express, Alibaba and other similar sites that are free to be privately labelled for local businesses around the world.
What is Meant by OEM?
The abbreviation OEM refers to Original Equipment Manufacturing. And, an OEM service refers to manufacturing the product according to the buyer’s requirements such as custom-made products.
For example, here at teeshirtmanufacturers, we offer custom designs, material, sizing, printing methods, and color choices. Or you can take the example of Nike, Adidas, Apple, etc. getting custom products made according to their own specifications. The manufacturer need to have the skills and equipment to perform the job.
Another way to define OEM product is getting personalised customization, done to an ODM product originally designed by the manufacturer, as per the specifications provided by the buyer.
Working With an ODM Supplier?
Finding and selecting an ODM manufacturer is a straightforward process: you look for products that have already been manufactured by the manufacturer or supplier to buy and sell.
Mostly, the buyers may request minor changes in the design or choose to add their company logo to it. Therefore, they will have to choose a MOQ (Minimum Order Quantity) based on the cost to process those changes and the MOQ is often negotiated. If you are new to retail business, read more on how to deal with your supplier or manufacturer here.
What are the few changes you can ask for from the supplier or manufacturer?
- Get your logo on the product
- Get a custom color of the product
- Get the material/fabric of the product changed.
What are the changes you cannot ask for?
- Getting custom dimensions if the mold is required for making the product
- Getting additional features into the product such as a high-capacity battery, etc.
Working With an OEM Supplier?
The enormous task is to find a reliable OEM manufacturer who actually makes the goods you wish to sell. Manufacturers, not the supplier, is specialised in making the products because:
- They are experts in designing, assembling, or manufacturing your products.
- They have a proper supply chain (to get the material and parts for making your products.
- They are aware of the major risks involved as well as the quality checks they need to perform.
Mostly, the MOQ is large for these products as the manufacturer has to adjust to the needs of the buyer from beginning to end. And, as the design is from the buyer, there can be a copyright issue in case of showcasing it to others.
Pros & Cons of ODM:
ODM is considered the safest option by small scale businesses or local businesses for a number of reasons:
- Quick to manufacture and less time to market it.
- No additional costs for designing, tooling or manufacturing it.
- The manufacturer is comfortable with the technologies and procedures required for making the product.
- Minor changes can be made to fit to your taste
- Private labelling is enabled to market it from your company’s end for local businesses.
- There’s a MOQ that’s manageable for new wholesalers or retailers. Around 500 to 1000 pieces can be manufactured.
On the flip side, there are several downsides to ODM products:
- The design can either be seller’s own or have been copied from another company.
- When multiple sellers sell a similar product, the market value of the product can fall. Moreover, there’s a greater competition in the market.
- In case the design turns out to be a hit, the manufacturer or supplier might start competing with you.
- When suggesting a few minor changes to the products, there’s a great chance that the sellers steal your ideas to get away with if they appear more promising.
All in all, finding a reliable ODM supplier or private label manufacturer is quite a task, read here to learn about finding one.
Pros & Cons of an OEM Supplier:
- If the manufacturer makes similar products, he is familiar with the tooling and procedures to make desired product so tooling costs are cut.
- You can get a personalized design or product that has no competition in the market.
- You get the opportunity to sell your personal design. This is especially suitable for private label apparel companies that have to work on designing, fabric, etc. to set up their business.
- The MOQ is usually very high in case of OEM orders.
- If the product is high-end, changing the supplier isn’t an easy task, especially when it comes to dealing with all the quality checks to be performed. There are several other risks involved if you change the manufacturer or supplier.
- As a buyer, the actual market rate of components, tooling, machinery, etc. aren’t clear. Therefore, it is difficult to negotiate the rates.
- If your sales go well, the supplier might compete with you or steal your design. For example: manufacturing and selling local copies of original Nike or Adidas sneakers using less costly materials.
Where to Find Reliable ODM and OEM Manufacturers?
In case of finding ODM suppliers, a popular go-to option is popular platforms such as Aliexpress, Alibaba, etc. that offer definitive wholesale rates along with custom logo option.
But, the greatest risk involved is ‘not knowing if you are dealing with the actual manufacturer or just a supplier’. Why it’s important? Because it’s the manufacturer who can control the material, quality checks, etc. for making the product. While a supplier may be less concerned with it.
On such open platforms, you might be shown a product that has never been made by the manufacturer before but will work on it after you place the order. We cannot be sure about the quality control and supply chain for provision of quality material to the manufacturer.
It’s best to look up for manufacturers on Google as more and more Chinese manufacturers are setting up their profiles on social media and opening their sites to outreach people online. The websites are a perfect overview of what the manufacturer or supplier deals with.
Use specific keywords such as ‘T-shirt + manufacturer’, ‘shoe + manufacturer’, etc. to find the manufacturer. If you are a fresh graduate or a wholesaler looking to find apparel manufacturers that offer low MOQ for your start-up, here are a few Chinese manufacturers:
- For T-shirts, tanktops, sweatshirts, bomber jackets, jeans, denim shirts, etc. you can check out our teeshirtmanufacturer website or contact us directly for queries and orders.
- For men’s shoes, we can bet on Chinashoemanufacturers, who offer extremely low MOQ of 20 pairs to help you start your shoe business game. Plus, they are experts in utilizing quality material and designing the products with precisions.
- For women shoes or sandals, there’s no better option than sandalmanufacturers that use PVC, PU, TPR, etc. materials to manufacture the shoes.
The best part is that all of these manufacturers, including us, offer OEM as well as ODM options. Only the manufacturers who are backed by reliable material suppliers and machinery to create their products can offer both the options. Therefore, you can put your faith in any of these China wholesale suppliers to kickstart your business.
What We Have to Offer You?
At teeshirtmanufacturers, we are professional clothing manufacturers in China since 2012. We manufacture all kind of T-shirt, hoodies, sweatshirts, bombers, caps, jackets, denims, and jeans.
Being the top private label T-shirt manufacturer, we offer both OEM and ODM services giving the freedom to the buyer to select the material, color, and design. We employ multiple printing and embroidery techniques to manufacture high-quality shirts and men’s clothing. Our machine-embroidered designs have a flawless finish. As for the printing methods, we specialise in sublimation printing, 3D printing, digital printing, and you just name it.
Our wholesale apparel company in Guangzhou, China supports start-ups to medium scale businesses.