The difference between OEM, ODM, and OBM

In the manufacturing industry, the main difference between the three core cooperation models of OEM, ODM and OBM lies in the different control of the participants over product design, production and manufacturing, brand operation and sales channels. OEM is production according to the requirements of others, ODM is independent design and then branding for others, and OBM is independent control of the entire process.

OEM (original equipment manufacturer)

means that a brand (such as Apple) comes up with product design plans and technical standards and has the manufacturer (like Foxconn) produce products according to these requirements. Finally, the products are sold with the brand's name on them. In this model, the brand is responsible for design, branding and sales, and the manufacturer is only responsible for production. Moreover, the manufacturer has to rely on orders from the brand to make a living and does not have its own brand or sales channels, just like Foxconn manufactures iPhones for Apple.

ODM (Original Design Manufacturer)

It means that the manufacturer (such as Lianyu shares) handles the product design and production by itself. The brand owner buys the product after it is favored and sells it under its own brand. The brand owner may ask for modification of the design or directly use the manufacturer's plan. In this model, the manufacturer holds the leading power of product design, and the brand owner can buy out the design copyright. If not, the manufacturer can also license the same design to multiple brands, but only slightly change the appearance, just like Lianyu shares design and produce customized LED lighting products for international brands.

OBM (Original Brand Manufacturer)

It means that the manufacturer (such as a certain enterprise) independently handles product design and production, operates the brand and is responsible for sales. It has the final say from the inside out. In this model, the manufacturer controls the entire process of brand, design, production and sales, but needs to build sales channels and brand itself. Although it makes more money, the risk is also higher. Moreover, if the foundry wants to transform into OBM, it is easy to have a conflict of interest with the original OEM/ODM customers.

Comparison of OEM, ODM and OBM

Most manufacturing companies will develop along the path of "first becoming a pure OEM, then upgrading to ODM that participates in design after accumulating enough technology, and finally transforming into OBM with their own brands" to earn higher value chain returns, just like Taiwan's early OEM factories first entered the global industrial chain through OEM, and later slowly created OBM brands such as ASUS.

Kaweei is a professional customization factory that can take on OEM and ODM work, as well as small-batch wiring harness customization. It delivers new product samples quickly and can also take small and medium-sized orders. It currently serves industries such as industrial equipment, telecommunications, and medical equipment, and is constantly introducing new products to meet customer needs.