What Does OEM Refer to? – A Comprehensive Insight

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So-called OEM, which is the short for “Original Equipment Manufacturer”, you may have a chance to realize the acronym OEM while you are looking for Chinese products for your business.

You have come to the right place! We have the information you need to know what OEM stands for. Get comfortable and get ready. We’ll jump right into it!

What Does OEM Refer to?

An OEM, original equipment manufacturer (OEM) is a buyer who provides the design, sales and marketing for a product and invites another company, in this case a manufacturer, to provide the production location, equipment and skilled labor for the buyer’s product.  These products are marketed under the buyer’s brand name.

OEM companies are within their specific industry cluster.  They have access to all the factors of production, goods, used for production: specialized equipment, skilled workers, cheap raw materials and semi-finished products and other supporting facilities. A factory cannot operate in an isolated location.  It needs to be close to raw materials and a strong labor pool.

That’s why many of China’s OEM manufacturers are located in industrial clusters. Industrial clusters provide everything an OEM manufacturer needs to succeed:

  • Skilled&Well-Trained labor;
  • Raw materials;
  • Semi-finished products;
  • Supporting facilities (warehousing, shipping and the like).

OEM vs. ODM, the Difference? Which is the best one for buyers?

ODM – “Original Design Manufacturer”, Over time, as Chinese OEMs work with customers around the world, their design capabilities have increased. They have a strong ability to be involved in designing the practical products your customers want. The factories offer design services in addition to standard manufacturing for your products.

As OEM services evolve and better manufacturers better match the needs of customers in foreign markets, many OEM manufacturers are moving from general manufacturing to ODM. the reasons for this are as follows:

  •  ODM reduces uncertainty in the final product due to competitive production technology and competitive raw materials;
  • They can focus on strengths almost exclusively while minimizing any elements that are a liability.

OEM or ODM depends on two factors as a buyer. Your design capability and specific product requirements. Capability means that you can design your own product models using design software such as CAD. If you have this capability, an OEM manufacturer is what you need.

If you don’t have a design team, lack time, and can describe your product in words or rudimentary sketches, an ODM manufacturer is what you need.

Also, whatever you need, keep an open mind and communicate clearly with your manufacturer. Ask them to review your design drawings and offer suggestions on how to do it better. Your OEM manufacturing partner can use their wealth of experience and industry knowledge to refine the design drawings from a variety of perspectives.

They may be able to help you identify flaws and even reduce costs!

How to Find a Qualified OEM Supplier?

Domestic and foreign product release conferences from Chinese manufacturers

A typical new product launch will follow the standard algorithm for product launches. The company will make an announcement inviting potential and relevant customers interested in that particular product and officially launch the product at a specific location and time.

This is a very common way for large companies and corporations to launch new products. Apple is one of them. Whenever Apple releases a new product, they hold a big meeting and showcase the new product. 

Some Chinese manufacturers and suppliers will do something similar with their products. For example, when a large Chinese company holds a product launch, Sourcing Nova makes it relatively easy to find its supplier information.

A Variety of Websites to Find Manufacturers

In terms of how to find manufacturers, you are obviously living in the most economical, fastest and most widely used way. Search engines, specialized B2B sites, online trade fairs (the famous Canton Fair went online due to its big popularity) and new media are all effective tools for finding manufacturers of products.

The Internet is also making fundamental changes in the development and cooperation models of traditional manufacturers. However, it is important to proceed with caution when using websites to find manufacturers.

Domestic and Foreign Exhibitions&Canton Fair

Exhibitions continue to be the standard for international business matching manufacturers. It is common for representatives of various manufacturing companies to attend exhibitions during several months of the year.

In China, the Canton Fair is the largest and most comprehensive of these. In fact, many of those who attend the Canton Fair work with a large number of international trade partners in various countries.

There are also more specialized fairs in various cities in China – the Hair Fair for wigs, the China (Yangjiang) International Hardware Knife and Scissors Fair for kitchen knives and scissors, and the Sports Fair for various sporting goods. If you are interested in a specific white label product, chances are we can find a manufacturing fair in one of the Chinese cities.

Specialized Third-party Agent

There are a number of third-party sourcing and information platforms, a professional sourcing team or data and information sharers, with a considerable number of manufacturer resources to choose from. These companies take your specific sourcing needs and make recommendations based on this information.

This is not part of finding the best supplier. We strongly recommend that you hire a China sourcing agent for any product you want to source from China.

Sourcing agents come from trading companies, freight forwarders and IT technology companies. Specific sourcing agents are usually tied to a geographic location and industry cluster. For example.

  • Yiwu sourcing agents prefer quality and inexpensive general merchandise.
  • Purchasing agents in Foshan prefer construction materials.
  • Purchasing agents in Shenzhen prefer high value-added technology products.
  • Purchasing agents in Guangzhou prefer beauty products.
  • Sourcing agents in northern provinces of China tend to focus on heavy industrial products.

This is because Chinese manufacturing industries form different industrial clusters in different geographical regions.

Conclusion

What OEM products would you like to import from China? What is the premium brand in your niche product industry that you would like to see as your own brand?

What if we told you that we would have the same OEM manufacturer as that brand produce your private label product at a very low cost?

We can make that a reality. Please leave a comment below. We want to know what products you are interested in sourcing from top manufacturers.

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