ODM/OEM - inbiketech

banner

ODM/OEM

We have R&D teams to
offer you with product development and OEM.

ORIGNAL DESIGN MAN

ODM (Original Design Manufacturer) is also referred to as private labeling or white label products. In this case, the manufacturer has an existing product design and the customer may make slight changes to sell it under their own brand name. Some examples of changes include branding, colors, or packaging.

An example of an ODM product is car chargers. If you browse for car chargers on Amazon you will see multiple companies with essentially the same design. While the products are manufactured according to the same general design, each is custom branded, colored and packaged according to each buyer’s specifications.

ODM doesn’t refer to just electronics either. Have you ever noticed how furniture, clothing, or sports equipment often carry similar looking products? This is another example of ODM manufacturing.

The advantage of ODM manufacturing is the low amount of resources that the customer needs to create a product. With ODM, the customer does not need to invest millions of dollars, or time, into research and development in order to develop a new product. By reducing the expense of product development, the customer can focus more time and money on marketing strategies.

Another benefit to using an ODM manufacturer is the availability of the economies of scale. This means that the product’s unit cost is lower since the manufacturer is building the same design at large volumes.

The disadvantage of ODM is it can be difficult to stand out from competitors that are essentially offering the same design at a similar price point. This amount of price competition often means lower profit margins.

For example, an end user looking to purchase an ODM car charger is more likely to choose the lowest price instead of caring about the color or brand. It requires a great amount of creativity from the customer to really differentiate their ODM product from competitors in the market.

When deciding to use an OEM vs an ODM, it really comes down to available resources. If a company has a research and development budget, along with a reasonable time-to-market plan, then using an OEM is a good fit. If time and resources are scarce, then ODM is the route to go to launch a product.