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ODM Meaning in China Manufacturing – Pros and Cons

ODM含义在中国与OEM不同。ODM意味着原始设计制造业,供应商在其中实质上进行所有研发并制造产品以用于私人标签

Vaughn Cook RockWell Window Wells
编辑团队
May 24, 2021

ODM is a term that appears commonly when you are searching for import options in China. It is used to refer to the outsourcing of products which you cannot obtain locally. ODM products are usually developed by an external manufacturer because clients do not have the technical know-how or tools required to build these products.

许多人倾向于将ODM含义与OEM混淆,OEM代表原始设备制造,目的和特征与ODM不同。在本文中,我们将解释ODM含义以及如何在行业中使用。我们将探索如何从使用ODM产品中专业地受益。

ODM Meaning

The acronym ODM typically stands forOriginal Design Manufacturing. It is a type of contractual manufacturing system which offers broad services to clients. ODM structures product development opportunities which result on the basis of designs made by a manufacturer. Sometimes an ODM can provide services for the entire lifecycle of a product. These products could be developed by a supplier or it can be the replica, both legal and illegal, of someone else’s brand or product.

How ODM can benefit you

The exact service and scope of an ODM varies on the basis of its capabilities. In plain terms, an ODM can provide a solid outline on how to transform an idea into a tangible good. For instance, you have an idea about a laptop that you want to create. Upon performing research on your local market, you come up with a plan to sell affordable and high-quality laptops to your audience.

为了制作所需的笔记本电脑,您需要在其中包含几个功能和配件。但是,对于创建笔记本电脑所需的技术范围的程度,您的理解可能有限。在这种情况下,您可以访问ODM公司寻求帮助。他们可以根据您可能不知道的技术规格创建新设计。您需要为他们提供您的想法,并且很可能ODM公司具有现有的产品系列,您可以根据自己的需求进行自定义。

ODM产品建造过程平滑overseeing the manufacturing of your product. These products can be branded with your name to make them appear as if you were the manufacturer. This is why ODM products are also known as ‘private label products’。近年来,几家电子商务公司已参与与ODM产品开展业务。

Use of ODM in manufacturing

Despite knowing ODM's meaning and its purpose, customers tend to mistakenly assume that suppliers have constant access toODM products。尽管有机会找到类似类型的产品,但大多数ODM产品都需要提前订购,因为工厂通常没有容易获得的ODM产品。

Also, ODM products are typically of three types:

  • 供应商发明和开发的产品:在某些情况下,供应商可以选择投资于产品的研发。根据案例,供应商可能选择为其公司中所有可用的产品做到这一点。由于拥有知识产权,因此供应商将倾向于保留对产品的更多控制权。
  • 客户开发的产品:这些产品具有客户所有的设计。其中一些可能也有客户拥有的工具。该产品的外观可能与供应商制作的另一种模型相似,但供应商可能没有设计规格。
  • Products used for demonstration purposes: When a supplier showcases images of a product that they may not have manufactured, a customer is required to pay for the tools of the product. In such cases, it is not certain whether the product may be considered as an ODM product. It may be accepted if it is a virtual design developed by a supplier who wants to showcase their abilities.

Pros of ODM products: Conservation of resources

与其他类型的产品相比,ODM产品具有多种优势OEM(Original Equipment Manufacturing) products. The former products help to save resources such as time and money that you would otherwise invest in developing a product. With this advantage, you can invest more effort into your essential operational activities.

供应商的协助

您还将从外部原始设计制造商的专业知识中获利。这可能证明是有帮助的,尤其是如果您对管理业务知识渊博,并且可能不太熟悉技术或制造业方面。当您与ODM制造组织达成协议时,您将获得他们的技能和知识,这也可以使您在未来的产品开发工作中受益。

Lower costs

Typically, the cost to manufacture an ODM product through a supplier can be less expensive than developing it yourself or with assistance from an OEM. Since you do not have to spend resources developing technical designs and making the product, you benefit from reduced costs. You also benefit from economies of scale from the ODM manufacturing organization. If there are special design requirements, the supplier will be paying for them.

It is possible the supplier may be generating products in bulk amounts, yet are then sold in smaller quantities. By contracting with your supplier, you can save expenses by purchasing small quantities of products from the bulk production. In some instances, you could be sharing your supplier with another brand of considerable repute that uses the supplier for a certain category of products.

更多的时间来管理你的业务

Another benefit of ODM products is that you can benefit from a faster business setup period. If you are in the position of having no external assistance with product research and design, it can be time-consuming to prepare the design by yourself and arrange a production line. By contracting with someone else, the responsibility of creating the product rests with them. This gives you the time to brand and publicize your product.

Since the ODM manufacturing unit takes care of your technical requirements, you can use your time to move forward with market testing, building the brand, and ensuring a proper launch for your product. This is especially useful if you own a large firm where several departments are involved in the process of product testing.

ODM产品的缺点

In addition to these advantages, ODM products have certain disadvantages as well. The product that you receive will not be unique or differentiated. As mentioned earlier, your supplier may be involved in business with other brands and designing products that might compete with yours in the same market. To avoid this, your product needs something to distinguish it from the rest. You can include a different packaging format or offer additional free items while putting your product on sale.

Also, private labels are selectively beneficial for some types of products. It might not be beneficial for you if you want to sell a unique product having a specific design type. In such cases, you would benefit more from using an OEM product.

ODM Meaning China - Electronics router
Electronics is a popular industry for ODM

Industries where ODM products are more popular

There are several industries that take advantage of ODM products worldwide. These include electronics,computers,机械和食品行业。许多超级市场都有自己的基本商品份额,但是在许多情况下,他们倾向于与一个受欢迎的品牌共享供应商。这些产品以自己的名义更名。

Developed industries which require tools that are more costly to manufacture typically make use of ODM products. Industries that sell kitchen appliances are an example. Medium and large sized firms operating within this industry contract with an ODM manufacturing organization to manufacture a specific appliance. These products are then branded to match the other products belonging to the same company. Such companies do not need to invest in appliance components by themselves as the ODM firm takes care of it on their behalf.

Medicine and fashion industries also rely on ODM products which are first received from a supplier and then marketed as the product of a specific company. ODM products are not as popular in industries that are more focused on design rather than function of a product. Examples include cosmetics and jewelry industries.

ODM meaning in the Chinese manufacturing industry

While searching for ODM meaning, it is likely that you will not discover ODM specific suppliers. In every industry, manufacturers typically begin as OEMs and develop products on the basis of requirements provided by buyers. However, some suppliers have started developing ODM products exclusively and you can find them in China.

The ODM manufacturing industry is growing fast in China. Chinese suppliers have product design skills which they use to provide both white label and private label products to consumers. Research indicates that the ODM sector experienced a 2% growth in volume in 2016.

Over the last ten years, Chinese manufacturers have been making a concerted transition from OEM to ODM. With assistance from automated technology and other operational procedures, the ODM sector is focusing largely on creative designs and brand development. Having expertise puts manufacturers at an advantage when it comes to conceptualizing design and tool requirements for a particular product.

Conclusion

As explained above, ODM meaning and its purpose is different from that of OEM. Companies are able to obtain business products through contractual agreements with ODM manufacturing firms. ODM offers many advantages in comparison to OEM. These include but are not limited to lower price, resource savings, assistance from a third-party supplier, fewer risks, and extra time for building brand identity and marketing efforts. Such advantages put ODM products and the manufacturing sector at a greater advantage for the coming years.

Sourcing Allies is a team of expert China sourcing agents that has helped western customers manufacture and source products from low-cost regions since 2006.

有关更多信息中国sourcingvisit ourwebsiteor write to us atinfo@sourcingallies.com.

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