1. The meaning of OEM ,ODM and OBM

OEM is the abbreviation of Original Equipment Manufacturer in English. It is called OEM. It means that the brand does not directly produce by itself, but uses the key core technology to be responsible for the design and development of new products, controls the sales channels by itself, and entrusts other manufacturers to follow Samples are used for manufacturing, and then the ordered products are bought out at a low price and directly affixed to their own brand trademarks. This kind of cooperation is called OEM for short. Manufacturers who undertake processing tasks are called OEM manufacturers, and the products they produce are called OEM products.

ODM is the abbreviation of Original Design Manufacturer, which means that the purchaser entrusts the manufacturer to provide all services from research and development, design to production, and post-maintenance, while the purchaser is responsible for the production method of sales. The purchaser will authorize its brand and require the purchaser’s brand name to be used for production. Manufacturers that undertake design and manufacturing business are called ODM manufacturers.

OBM is the abbreviation of Original Brand Manufacture, that is, the OEM operates its own brand, which means that the manufacturer creates its own product brand, produces and sells products with its own brand. Some people think that acquiring existing brands and acquiring brands through franchising can also be regarded as OBM.

2. The difference between OEM，ODM and OBM

OEM	ODM	OBM
Complete production as required	Master the core technology	Own own brand
Professional production and processing	Participate in product development	Responsible for product design, engineering,
	Professional production and processing	manufacturing and marketing

OEM only conducts OEM production, and the products are tailor-made for brand manufacturers. After production, only the brand name can be used, and the manufacturer’s own name must not be used for production.

ODM is done by itself from design to production, and the buyer can OEM directly. ODM depends on whether the brand company has bought out the copyright of the product. If not, the manufacturer has the right to organize production on its own.

OBM is that the manufacturer owns the brand and is solely responsible for the design, engineering, manufacturing and marketing of the product.

3. Examples of OEM，ODM and OBM

OEM example: Some cosmetics brands will choose the OEM method to test the possibility of entering the market. Brand owners outsource the products to cosmetic OEM manufacturers for small-scale production, and then push them to the market to observe the market’s response. If the response is good, the brand owners can mass-produce them to launch their own new products and brands.

ODM example: Some Japanese brand notebook computers are actually manufactured by Taiwanese manufacturers. Afterwards,Taiwanese notebook computer manufacturers only need to modify certain design details or accessories to mass-produce under their own brand names.

OBM example: Taiwanese manufacturers such as Lenovo have gradually tried to establish their own brands to directly operate the market with the accumulation of product production experience and investment in new product development activities.

4.Advantages of OEM，ODM and OBM

OEM advantages: increase production and sales, reduce the risk of new production lines, and win market time. It can effectively improve brand efficiency and business scale. The outer packaging can be designed and advertised according to its own requirements, with its own brand, independent pricing, and consolidation of sales channels to ensure maximum profits. It saves a series of production costs and tedious tasks such as plant, equipment, materials, R&D, production, technology, approval and certification, so that your funds and energy can be focused on sales and marketing.

ODM advantages: The biggest advantage of doing this is that the latter reduces its own research and development time. The ODM manufacturer is responsible for the whole process from design to production of the product, which minimizes the cost of customers. Solve the production problems of merchants without huge investment and save costs in all aspects. Make it a reality for customers to create their own brands. At present, the trend of the beauty and makeup industry to develop with merchants’ own brands is emerging all over the country. Merchants can still have their own products through ODM processing methods without the need to build factories. Enable customers to go all out and concentrate on promoting the brand. Most merchants are good at selling, but lack the ability to make good use of their strengths and avoid weaknesses, and focus on promoting the brand to achieve a multiplier effect with half the effort.

OBM advantages ：Establishing its own brand and being solely responsible for the design, engineering, manufacturing and marketing of its own products is conducive to the long-term development of the company.

Summarize

There are different stages of enterprise development. In the beginning, in order to survive, enterprises have to cooperate with large companies to do OEM production, which can obtain excellent training and development opportunities. However, OEM has certain limits. When OEM has a certain scale and strength, the manufacturing level of the enterprise is quite mature, and the technical level has accumulated to a certain extent. At this time, the enterprise must actively implement the strategy of technological innovation and brand success, and upgrade from OEM. To ODM or even OBM, to meet challenges and gain a new life requires more investment and high risks. It has high requirements on the scale, strength and management level of the enterprise. Only by slowly upgrading Chinese manufacturing factories from OEM to ODM, or even OBM, can enterprises have long-term development. For example, Guangdong’s Pearl River Delta region originally had many developed foundry industries, but as the earliest manufacturing base in China, it strengthened manufacturing but weakened innovation. When the advantages of low labor costs are gradually replaced, and international manufacturers gradually shift their production to the mainland, OEMs obviously can no longer see the long-term future. Fortunately, some vendors have started to do ODM and even OBM, focusing on design innovation ability and simultaneous improvement of manufacturing capacity. For example, the Chinese brand Haier has achieved today’s results by embarking on the road of OBM. Only when Chinese brands are famous for their innovation and quality, can companies truly have long-term development opportunities.

Chaozhou Helikun Foodsuffs Co., Ltd. is a comprehensive food enterprise integrating R&D, production and marketing, and has passed the food safety management system and food safety market access certification. We supply all kinds of food, including press candy, lollipop, popping candy, soft candy, chocolate and provide OEM and ODM service.