If you are looking to get your products manufactured in China, OEM and ODM are two terms that you will frequently come across. Those who are already into global sourcing and get their products manufactured by another company, in another country would definitely be aware of these terms. For the beginners, we are here to help. In this post and the one that follows, we will walk you through these two important types of outsourced-manufacturing methods. Let sus have a look at OEM China first.

Original Equipment Manufacturing (OEM) is a type of contract manufacturing or outsourced manufacturing. When a factory is capable of and willing to manufacture products as per the unique design and specification you provide, it known as OEM. When you let an OEM manufacture your products, you typically need to do all the R&D including design and engineering. Normally, OEM manufacturers make parts and subsystems that are used by other companies to make their end product.

For the past 11 years, China has been the world’s largest manufacturer by output. China is a specialist when it comes to OEM products. So, anyone looking to outsource manufacturing new product can trust Chinese OEM manufacturers to get the job done in the best possible way.  However, before you let a Chinese factory manufacture new product for you, you must do your research. The best thing to do is to hire services of a reliable Chinese sourcing agent, who can help you find the right company to manufacture new product for you.

• OEM offers host of advantages to business. Right from cost-effectiveness to production efficiency, there is a lot businesses can gain from OEM. Here are some ways in which OEM can benefit businesses.
• When you choose the OEM route to manufacture new product, you have full control over your intellectual property. All the research and development has been done by you, so you have all the IP rights. However, you must make sure you take all the necessary steps to protect your IP rights. Unfortunately, there are some unreliable elements that can copy your designs and specifications. This is one more reason for you to seek services of a sourcing agent. They will make sure that only a reliable and capable manufacturer is chosen to manufacture new product.
• OEM gives you access to expertise because these manufacturers usually specialize in making specific types of products. They provide the most efficient way and cost-effective way to manufacture new product that requires a specialized approach, methods and equipment.
• It is almost always more economical to have an OEM manufacture a new product than a reseller doing it themselves. Chinese manufacturers can offer low-cost manufacturing like no one else can. They rely on achieving economies of scale through mass production. So, you save on the cost of setting up, running and maintaining your own manufacturing unit.
• The kind of manufacturing speed you can achieve by outsourcing your large-scale production to an OEM is unbeatable. Thanks to their already established manufacturing facilities and expertise in the field, they can manufacture your product much faster. Your product can reach the market in much shorter time.
• Outsourcing the manufacturing of your new product to an OEM saves you a lot of energy and time that you can spend on other critical business functions. You can focus on R&D and marketing your product while manufacturing is being taken care of by your chosen OEM.
• When you get your new product manufactured by a reputed OEM, they will provide a manufacturer’s warranty so you can stay assured of the quality you get.

While the benefits of OEM far outweigh its disadvantages, it is crucial to understand that it might not always be your best choice for your needs. Also, you need to keep a few things in mind throughout the process to make sure you get the best global sourcing experience.

• If you are a small business and you have a great product idea, you may still find it difficult to provide the manufacturer with complete design and specifications. Unless you possess the technical know-how or you have an in-house team that can do this for you, OEM may not be a feasible option for you. In this case, ODM may be a good alternative. We will talk about ODM in the next blog post.
• When you decide to work with a Chinese manufacturer without performing due-diligence, you may put your intellectual property rights at risk. It is not uncommon for conflicts to arise when it comes to design patents or trademarks. So, unless you take all necessary legal steps to register and protect your intellectual property rights, you may end up in some trouble.

A good sourcing agent China can help you identify the best manufacturer for your needs. They will take care of all aspects of sourcing and make sure you get the best deal. They act like your representatives in another country and provide all the support you need.