In this era, the saying that “anyone can have their own brand” is not an exaggeration. It is a statement that is appropriate for the current situation where we see both famous people and newcomers opening their own brands, ranging from skincare brands, cosmetics, clothing, supplements, to large products such as machinery in factories. When starting to think about creating a brand or having their own products, one thing that brand owners look for is a “factory” that is quality, reliable, and meets the needs of the brand owner in producing products. However, nowadays, if we type the word “factory” and press the search button, we will find 2 words attached to it, which are “OEM factory” and “ODM factory”.

But even though many people may have seen these two abbreviations often, especially brand owners or those who dream of owning a business who must have searched for information about factories until their eyes were dizzy, in this article, we will compare the strengths and differences between OEM factories and ODM factories so that you can clearly understand the differences between the two.

1. What are OEM factories and ODM factories?

An OEM factory, or the full name Original Equipment Manufacturer, is a factory that produces and designs products for various brands according to the formula or requirements of the customer. After that, the customer will take the products produced with the OEM factory to sell under their own brand name.

While OEM factories produce products according to customer formulas or requirements, ODM factories, or the full name Original Design Manufacturer, are factories that research, develop, experiment, and test the factory's formula until the product is complete in terms of quality and efficiency, including getting products that have unique features that are different from other products of the same type in the market.

2. Differences between OEM and ODM factories

After we have learned about both OEM and ODM factories, in this topic, we will look at the differences between these two types of factories. How are each factory different? What are its strengths? And if we are brand owners, which type of factory should we choose to best meet our product production needs?
The difference between these two factories is that OEM factories produce products with ready-to-manufacture formulas only, while ODM factories produce products with factory formulas, develop, test, and obtain product formulas that are unique to the brand. They also test until we are confident that we have obtained products with the best quality and efficiency.

That is, if the brand owner has a product formula that has been researched and is confident that it is ready to use, and is only looking for a factory to produce the product, the brand owner can hold the formula and walk into the OEM factory. However, if the brand owner only has an idea but does not have the desired product formula and is looking for a factory that can both think and produce, the brand owner can choose to walk into the ODM factory.

Advantages and Disadvantages of OEM and ODM Factories

When you know the differences between the two factories, another point that brand owners must consider before deciding on the type of factory that is suitable for their products is the advantages and disadvantages of the factory, whether it is an OEM factory or an ODM factory. Because carefully considering both advantages and disadvantages before every decision is an action that brand owners should do. Because they should think carefully about all aspects, including costs and profits after selling the product.

-Advantages and disadvantages of OEM factories

Advantages

• No need to invest in building a factory for the brand
• Get a factory that is skilled in knowledge, techniques and tools to produce the product
• No need to bear the production risk
• The product is unique and different because it is a formula from the brand owner directly

Disadvantages

• Takes more time than an ODM factory because the factory needs time to develop the formula
• If you want a new type of packaging that is not the same as the standard packaging that the factory provides, you will have to increase the cost of additional packaging.

-Advantages and disadvantages of ODM factories

Advantages

• No need to invest in building a factory for the brand
• Can produce products quickly because the factory already has a standard formula
• Use less production costs
• Get a factory that is skilled in both knowledge, techniques and tools to produce products
• No need to bear production risks
• Can move the production base or move the factory during the production process
• Have experts to consult at every step

Disadvantages

• Has higher production costs than OEM factories
• Has additional packaging costs to support newly designed products
• Takes a relatively long time from the beginning to the production of the product

When comparing the strengths and weaknesses of both factories, we will see that both types of factories will have some similarities and differences. But what is more important than choosing a factory that meets our production needs is choosing a factory with standard production standards, experts to provide advice and consultation, a clear production contract, no history of damage, and a reliable supplier, especially when the products to be produced are large products that require high safety and standards, or are to be used in large factories where the safety of co-workers is involved, such as machinery or medical equipment.

When you have considered the requirements and standards required by the factory completely and completely, you can choose the factory you want and prepare to receive the products to be sold on the market.

Good news for future business owners who are looking for an OEM factory. You don’t have to look anywhere else because you can bring your ideas and products to be manufactured at C.C.Autoparts! Or if you still don’t dare to decide, you can stop by and ask for advice from us first because we have experts who are ready to give advice before and throughout the production period. You can be sure that you will get products that meet the specifications, are of better quality than anyone else in the market, and are a great helper in starting a business for everyone for sure!