The words OEM, ODM, OBM Very popular, widely used in the import and export industry. So what is OEM, ODM and OBM, which term stands for, what is the difference in import and export goods? How to distinguish?
What is OEM?
OEM is an acronym for Original Equipment Manufacturer aka original equipment manufacturer. OEM is often used to refer to companies, factories that perform the work to manufacture according to the design, preset specifications and sell the product to another company.
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To put it plainly:
Example: Company A designs a productWhere is the best place to learn actual import and export?
Company B is a manufacturing company (also known as OEM).
A will design the product’s design and shape and place an order for company B to produce that product. After the product is introduced to the market, the product is branded and originating from the company. Meanwhile, A will negotiate and pay a fee for processing and manufacturing products for B on the condition that production information is confidential.
What is ODM?
ODM stands for Original Designed Manufacturer aka original product designer. An ODM company is a company or factory that designs and creates products as specified by customers. In this case, companies that have an idea but have difficulty in product design, hire an ODM company to solve this problem. Turning an idea into a real product is the main task of ODM companies.
From the above example we can understand that company A acts as an ODM. In case the customer orders design with A but company A is not able to produce, company A can contact company B or the customer directly contact B.
What is OBM?
In addition to the above two common concepts, there is a concept that is also used with the symbol OBM which stands for Original Brand Manufacturer, also known as the original brand manufacturer.
This type of company is completely different from the above two types. OBM Company does not play a post-production role as a production or design company, the main task of this company is to develop the brand and maintain the brand that brings consumer prestige to customers.
This type of company can be understood as a trader. They do not manufacture their own products, but use other products and companies that name their own brands.
A good example of Khaisilk’s case is an OBM or ODM company. Hoang Hai company can design products, send designs to Chinese enterprises for production or simply import products from China and change designs for their own brands.
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Usually, a company only hires one or two services above and from different companies to limit the risks arising.
Characteristics of types of companies OBM, ODM, OEM
Other companies or customers who contact these types of companies often get the following benefits:
– Helping businesses in the process of creating products become more effective
+ Enterprises do not have much experience:
Production or design: They need the other party to be able to create products for their business to sell goods to the market. In this case, the enterprise does not have conditions such as machinery, equipment or human resources that can produce but wants to trade in this item, then hiring another company helps the company perform its work more efficiently.
Brand promotion: Many businesses want to bring products to consumers but do not have enough conditions to compete in the market, businesses will provide products for other businesses to sell these products and goods.
– Cost savings
Maybe the production or design by yourself will cause businesses to create more costs instead of hiring a service company, the company will choose this form to reduce costs and reduce problems. born.
Besides the advantages, the development of these types of companies now brings a lot of limitations:
– For consumers:
Using a product according to market reputation makes them mistakenly believe that the product carries the right quality according to that prestige level. Consumers feel taken advantage of and cheated because of the product they choose.
This is also the case with Hoang Khai Company when replacing the “Made in Vietnam” label for products of Chinese origin. Customers have long believed that the silk products produced by Khaisilk are produced by the company itself and have a sufficient reputation for quality. They feel cheated by lower quality Chinese products
– For OBM:
Hiring a company to manufacture or design a product will have many risks such as:
+ In case the two parties do not clearly stipulate in the contract, if the lessee turns around, in addition to the business reputation decline, it will create conditions for the lessee to develop on the reputation of the brand.
+ If customers discover this information, the customer’s back will be something that businesses cannot avoid.
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– For ODM/OEM
Any company wants to produce and sell products with its own brand on its own efforts and intelligence. The cooperation with OBM makes the business not get the maximum profit that the business generates.