Nowadays, China OEM Manufacturers has become very mature. oem is a product of the increasing refinement of the industrial division of labor in the global economy. It provides companies with the ability to increase the allocation of their resources to innovation capabilities and minimize investment in fixed assets. Through OEM, it is possible to quickly complete the global coverage of the company’s brand and at the same time reduce investment costs and investment risks. In this article we will introduce OEM and Chinese OEM manufacturing in detail.
What is OEM？
OEM is the abbreviation of Original Equipment Manufacturer, according to the literal meaning, should be translated as original equipment manufacturer, refers to a manufacturer according to the requirements of another manufacturer, the production of products and product accessories for its, also known as the fixed-brand production or authorized labeling production.
That can represent outsourced processing, but also on behalf of subcontract processing. Domestic customary called collaborative production, three to processing, commonly known as processing trade. The first popular in Europe and the United States and other developed countries, it is a game of international companies to find their comparative advantage, can reduce production costs and improve the added value of the brand. This production method is more popular in the domestic home appliance industry, such as TCL in Suzhou Samsung customized production of washing machines, Changhong in Ningbo Di Sheng customized production of washing machines, etc..
Specifically, OEM (Original Equipment Manufacturer), ODM (Original Design Manufacturer), and OBM (Original Brand Manufacturer), are the original equipment manufacturers. Party A is interested in Party B’s production capacity, so that Party B can produce products designed by Party A and use Party A’s trademark. For Party B, this is called OEM; Party A’s technology and design are seen by Party B, and Party B introduces the production and labels it with Party B’s label. For party A, this is called ODM; A creates A brand on its own, and B produces and sells the products with A brand. For A, it is called OBM.
OEM manufacturers fall into three main categories: original equipment manufacturers (OEMs) who produce goods to the specifications of other companies; system integrators who design and assemble systems but do not manufacture any components themselves; and contract manufacturers who buy components manufactured by other companies designed by the system integrator.
For Western companies, the OEM manufacturer is a very popular choice. It can provide a good quality product at a lower price than if they were to make it themselves. It offers them an opportunity to outsource complex manufacturing tasks and focus on what they do best.
Advantages of OEM manufacturing
- Help the brand’s resource integration
One of the factors to choose oem OEM processing is because it can get the organic integration of brand resources, which can make the brand products to disperse the pressure and focus on doing what they are good at and meet the division of labor. There may be some brand enterprises do not have a strong production capacity, in order to ensure the quality of the product, we have to choose some oem OEM processing factory for product production, in order to achieve the integration of the use of resources.
- Reduce the production risk of enterprises
Due to the original enterprise brand and numerous work, investment costs are relatively large, but the profit margin is very low, it is difficult to obtain easy profit, so in order to be able to enterprise development risk, reduce costs, choose some oem OEM to help carry out the production of products. There are specialized manufacturers of research and development products, improve the efficiency of product production, but also to save energy and money, so to speak, the enterprise to focus on the production and sales link, the enterprise ability to show.
- Raise the interest of the brand
Brand owners, depending on the situation, the production of products entrusted to a third party to produce, to lay a good foundation for their future development, to take advantage of the technological innovation of good oem OEM processing, reasonable to find manufacturers who can meet the production standards. In order not to affect the quality of the product after the problem, OEM manufacturers should have enough advantages, supply complete, to help obtain the brand benefits to achieve.
- look for more guaranteed manufacturers
In order to get the quality of the product, it is very important to choose a manufacturer that is guaranteed in all aspects, which can greatly shorten the production cycle of the product, fit the requirements of the manufacturer’s production formula, strong qualification of the OEM manufacturer, as far as possible to reflect the guarantee of product quality. Find a long-term quality assurance manufacturers, the benefits of cooperation to get better. Now many consumers are in the product efficacy requirements, there is a guarantee of manufacturers in the research product capabilities based on the ability to quickly gain promotion.
- Cost reduction
The cost of OEM manufacturing products or parts is much lower compared to distributors manufacturing their own products or parts. Low cost is a huge benefit of mass production, especially in low cost manufacturing regions like China. By outsourcing production to OEMs, distributors also save the cost of setting up and operating their own manufacturing units.
Steps of OEM
- Bulk material processing
Receive business, communicate with each other to determine product requirements, provide samples or trial sets as required by customers.
Confirm the sample, place the order and prepay 50% deposit of raw material processing fee.
Factory production according to planned scheduling.
Before shipment, settle the balance and arrange delivery.
- Customer’s own procurement of packaging materials processing
Approach business, mutual communication to determine product requirements.
Provide samples or trial packs as required by customers.
Confirm the sample, place the order, prepay 50% deposit of raw material processing fee.
Package material into the factory, factory production according to the planned scheduling order.
carry out semi-finished product production, micro-inspection, while package cleaning and disinfection, coding and other production plants.
Packing boxes into the warehouse, settlement of the balance, and arrange for delivery.
- OEM one-stop service processing
Receive business, mutual communication to determine product needs.
Develop investment plans and brand conception and design according to customer needs.
Arranging package proofing according to product framing categories, determining package materials.
Place an order, prepay the full amount of package materials and 50% deposit of raw material processing fee.
Package material customization, package material acceptance into storage, planning production, semi-finished product production and testing, filling.
Settlement of the entire project upon completion of processing.
Arranging the shipment out of the warehouse after the settlement is completed.
Things to consider when choosing China OEM Manufacturers
- Find a quality assurance China OEM Manufacturers
Many brands choose oem foundry, usually price-oriented, but the price is too low, out of the product and the expected difference is very big, for the occupation of the market. Considering the cost factor, the price is the key consideration, but not price oriented.
- Find a China OEM Manufacturers with high production efficiency
A foundry with high production efficiency can greatly shorten your product production cycle, improve the product turnover rate, help open the market faster and reduce market risk.
- Pay attention to the production qualification of the China OEM Manufacturers
For some special industries of OEM production, we must pay attention to see whether the foundry has the corresponding production qualifications, whether it meets national standards, etc., so as not to affect the quality of the products produced.
- Find a long-term cooperation with the China OEM Manufacturers
Different China OEM Manufacturers may have certain differences in product quality, so it is generally recommended to choose oem OEM factories that can cooperate for a long time to avoid poor quality control and affect the brand reputation.
Advantages for China OEM Manufacturers
1. Cost reduction
One of the more obvious and important benefits of China OEM Manufacturers is the reduction in cost. The bottom line is that the better your product and price, the more units you sell. Even if you are launching a high-end brand, you can increase your profits by reducing your manufacturing costs.
Domestic manufacturing sounds good in theory. However, it adds overhead costs that don’t exist in China. It makes locally produced products expensive, which is why manufacturing in Western countries has declined in modern times.
Of course, you have to pay to ship the product and pay import taxes. But even if the overall price is slightly lower, you can still save. Over time and in increasing quantities, you can expect this to be a significant addition to your balance sheet.
2. Warranty
When you OEM in China, many China OEM Manufacturers will provide you with a warranty for a certain period of time. This can give you peace of mind when you order products from around the world. If there is a problem with the product, you can request a replacement or seek a solution to the problem.
3. Fast export and turnaround
China OEM Manufacturers creates goods for companies all over the world. This means they have scaled up their manufacturing to unprecedented levels. If you need a large quantity of goods in a short period of time, they will deliver them to your door.
These China OEM Manufacturers have produced products similar to yours before. This means they have all the procedures in place to make products quickly and on time.
One of the arguments against this is the unfair conditions of the Chinese workers. However, if you research the factories you are using, you will be able to see if the workers are being paid fairly and treated fairly. You should also consider that the attitude of working in China is culturally different from the West.
4. Very good service
Made in China brings with it the exceptional service inherent in its culture. Even for smaller businesses, you will receive the same treatment as larger global carriers.
This service also permeates product support. When you contact an China OEM Manufacturers’ support team, you will speak with their engineers. Talking to their technical team cuts out the middleman, which means you can make informed decisions and get important advice on how to improve and refine your product.
5. Perfect replication
You never need to fake a product. However, when it comes to manufacturing in China, you can specify what you like about an item and replicate them.
Maybe you want to include features you see on other people’s products or use the same dimensions. By discussing this ahead of time, a Made in China company can easily arrange it for you.
This is how products evolve. By taking something great and improving on it, you have the opportunity to make it better. With each iteration of the project, you can expect the quality to improve as well.
6. Shorten Lead Times
When you choose China OEM Manufacturers, you have several options to help you reduce lead times. One way is to use automated software to manage your inventory. This will ensure you keep track of how much inventory you need and order exactly when it starts to dwindle.
Another option is to order on a regular and consistent basis. This will mean that deliveries are reduced and you won’t miss opportunities when orders run low.
7. Expansion and Diversification
Choose China OEM Manufacturers allows you to add new product lines and validations to your portfolio. It’s something you’ve been considering for some time but didn’t think your current manufacturer could deliver. All of this can be done while keeping prices low and production better.
This can also help you participate in more international markets. You can ship to regions around the world, giving you access to markets that were previously inaccessible.
Contact us
Ningbo Greentime Import & Export Co Ltd is a professional sourcing agent with over 25 years of experience in foreign trade exports. Our products include and are not limited to kitchenware, Wholesale Fitness Products, fitness equipment, clothing accessories and other general merchandise.
Feel free to contact us when you decide to source products from China.
Lucia Lin as a Senior Sourcing Specialist, I have years of experience helping global buyers establish reliable supply chains in China and Asia. My work focuses on supplier identification, product development, cost negotiation, and compliance management. I specialize in categories such as homeware, gifts, and toys, mainly serving clients from Europe and South America. By conducting supplier audits and production supervision, I ensure every order meets international standards for quality and safety. With a deep understanding of factory operations and export processes, I help clients achieve competitive prices, consistent quality, and smooth delivery. My mission is to make sourcing from China efficient, transparent, and risk-free for every buyer.
