ODM stands for “Original Design Manufacturer”. This refers to a situation in which a manufacturer is asked to create a product according to the designs made by the client, with the intend of re-branded sale.
Difference between OEM and ODM
OEM refers to the pcompany that supplied parts during fabrication of an end-product. An example of this would be a manufacturer of seats. Ford could decide to use those seats in their cars. That company is the OEM supplier for Ford regarding these seats.
ODM refers to the company who makes the product according to the designs and requirements of the client. An example if this would be if Ford asked the manufacturer of the seats to create custom seats for them. That company would become the ODM supplier for Ford regarding these specific seats.
Another example to explain the difference between ODM and OEM.
Example of OEM
A manufacturer of polishing machines is asked to supply 1000 polishing machines without any labels or modifications. The customer will print their own labels and put them on the machine. The manufacturer supplies 1000 polishing machines. They can then be used to be sold via the customers own brand,
Example of ODM
A detailing brand is interested in including a polishing pad into their range. However, they want it to be made from a specific foam, in a specific shape and with a custom color. The manufacturer is asked to create a product according to a specific design. They become the ODM for that product.
Cases of ODM
The Kestrel DAS pro is an example of ODM. Kestrel have made a certain product, but where then asked by other detailing brands to customize the polishing machines slightly to fit their demands. One brand asked for a larger throw (from 15mm to 21mm). Another detailing brand asked for a 6 speed switch instead of the standard 5 speed switch. Kestrel made specific changes to their product unique for that client.
Another example could be when a manufacturer of a certain type of product/material is asked to create something they have never made before. A CNC-fabricator can be asked to make an aluminium wax-jar according to specific design. The CNC-fabricator might have never made anything like this before, but does have the tools to create it.
Other forms of ODM
ODM and OEM walk a very fine line, and this line is crossed in some cases. But ODM is not the only term associated with ODM. It can also be the case during: white labelling, re-branding, contract manufacturing and EMS.
When designing and creating something yourself, you own the intellectual rights. If you create a product from scratch in your garage, you own the intellectual right to that specific product. It does not mean it is a registered trademark, or that there is a fixed copyright on it. But you own that specific product, and it is yours. When you ask a manufacturer to create something according to your wishes and/or designs, the intellectual ownership of the supplied product lies with the manufacturer. This can cause several difficult situations when the manufacturer decides to sell your product to other customers. It is very important to discuss this situation before any contracts are signed.
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