Nowadays, OEM production accounts for a large proportion in import and export trade, including not only electronic products but also clothing, and socks can also be OEM produced.It is caused by the socialized division of labor in production. In the industrial society, well-known brand enterprises are generally willing to find other enterprises for OEM or ODM because of manufacturing costs, transportation convenience, saving development time and other considerations. However, those manufacturers with low brand awareness, limited sales channels and strong production capacity are more willing to accept orders for commissioned products with less risk.
What is OEM?
OEM means that brand producers do not directly produce products, but use their own “key core technologies” to design and develop new products and control the sales “channels”. However, their production capacity is limited, and even there is no production line or factory. In order to increase output and sales, reduce the risk of entering a new production line, or even win market time.They entrust other manufacturers of similar products to produce through contract ordering.
The ordered products are bought at a low price and directly labeled with their own brand trademarks. This cooperation mode of entrusting others to produce is called OEM. The manufacturers undertaking this processing task are called OEM manufacturers, and their products are OEM products.
Two advantages of OEM
1. Pursue profit maximization strategy
Because it reduces the occupation of production funds of entrusted enterprises and reduces the risk of market expansion. Compared with self shop, merger, joint venture and merger, OEM entrusted processing accounts for the least capital for brand enterprises. Improve the speed of brand enterprises’ new products entering the market. “OEM” is a good choice to quickly occupy the market in the short term. It is a good choice to effectively reduce risks without losing the market. Through OEM, we can not only quickly complete the global coverage of our brand, but also reduce investment costs and investment risks.
2. Accelerate access to the local market
OEM is also an important means for minority brands to develop local markets. With the increasing trend of global economic integration, many brands will also choose to enter the market of other countries. The popularity and recognition of these brands in the local market are not very high, and self built factories face the problems of long cycle and high cost. If you want to develop your brand in China, it is a shortcut to enter the Chinese market by making use of the relatively surplus production capacity of China’s existing production lines to carry out fixed brand production.
Differences between OEM and ODM
OEM products are customized for brand manufacturers. After production, only the brand name can be used, and the manufacturer’s own name cannot be used for production. ODM depends on whether the brand enterprise has bought out the copyright of the product. If not, the manufacturer has the right to organize production by itself, as long as there is no design identification of the enterprise.
In the industrial society, OEM and ODM are commonplace. For the sake of manufacturing cost, transportation convenience, saving development time and other considerations, well-known brand enterprises are generally willing to find other manufacturers OEM or ODM. When looking for other enterprises to carry out OEM or ODM, well-known brand enterprises also have to bear many responsibilities. After all, the product is the best of its own brand. If the product quality is poor, there are few customers who come to complain, and more importantly, they may have to go to court.
Therefore, brand enterprises should strictly control the quality of the factory during the entrusted processing. If you are interested in customizing and importing socks from China, you need to choose a trusted Chinese sock supplier to provide you with services in China.
WIN@TEX is an enterprise integrating product development and production. It has a professional domestic and foreign trade business team. From customer inquiry, sample development, to product production and shipment, the whole process has professional business personnel for docking services. The company has always adhered to the concept that “quality is the key to enterprise survival”, constantly studied and improved product quality, and obtained a series of product certifications such as Sedex, CE, FCC, SGS, and signed long-term cooperation contracts with international brands Adidas, Nike, etc.