Difference Between ODM and OEM

ODM vs OEM

Both the terms ODM and OEM are related to the manufacturing industry. ODM stands for Original Design Manufacturing, and OEM refers to Original Equipment Manufacturing. It is quite confusing to see the difference between the two, as they are very similar.

OEM refers to a company or a firm that is responsible for designing and building a product according to its own specifications, and then selling the product to another company or firm, which is responsible for its distribution. The one company produces products on behalf of another company, after which the purchasing company markets the product under its own brand name.

An ODM company or firm, on the other hand, is responsible for designing and building a product as per another company’s specifications.

So then, OEM companies design products as per their own specifications, whereas ODM companies design products as per other company’s specifications.

An advantage of OEM is that the purchasers can obtain products without setting up a factory. In a sense, OEM helps the purchasing companies to lower their production costs.

Summary:

1. ODM stands for original Design Manufacturing, and OEM refers to Original Equipment Manufacturing.

2. An OEM company is responsible for designing and building a product according to their own specifications, and then selling the product to another company or firm, which is responsible for its distribution. An ODM company or firm is responsible for designing and building a product as per another company’s specifications.