What is an ODM?
ODM is an acronym for ‘Original Design Manufacturer,’ which is a company that designs and manufactures products on behalf of other businesses. If you have an idea but have no design skills or manufacturing capabilities, you can work with a factory like this and they will take your idea or concept and put that idea through their process which would include research and development, design and prototype, and, finally, full production.
What else can they do?
Original design suppliers can also design and produce their own products which in-turn can be resold by other sellers, this is commonly known as private labelling a product, where a third-party seller would apply their own brand to a product manufactured by an original design manufacturer.
An example of working with an Original Design Manufacturer
Let’s use a personal electronic blender as an example.
An ODM company in China develops and produces a personal blender available in multiple colors. A third-party seller contacts the supplier and gets them to apply their unique branding to the blender and packaging. The blender is now a unique product sold under company A’s branding.
A second third-party seller does exactly the same but with their own unique branding too.
Now the ODM is supplying their personal blender, which they designed and manufacture, to different sellers.
The difference between ODM and OEM
Although the two acronyms are quite similar these suppliers are not the same. While both have the capacity to produce your product, their overall capabilities are different.
To keep it very simple, an OEM will produce your products as per your design and specifications, but they will not independently design or hold rights for that product.
ODMs, as discussed on this page, design and develop their own products which they do retain the rights for. You may purchase and have their products re-branded to fit your own needs.
Listen to this podcast episode about OEM vs ODM vs Contract Manufacturer
We recorded an episode of the podcast where we discuss the difference between OEMs, ODMs, and CMs, including their benefits and drawbacks. This should help you make a decision on which supplier type is best for your needs:
