Three OEM modes of far-infrared sauna products: OEM, ODM, OBM
In the far-infrared sauna product industry, enterprises often realize their business value by creating products with differentiation and meeting user needs. Many of these products of far infrared sauna products enterprises are not produced by themselves, but are produced through the “OEM” mode.
For the start-ups of far-infrared sauna products, they are extremely short of funds and resources in the early stage, and are unable to set up their own factories and production lines. Therefore, OEM provides a good solution, which can help the brand to produce products quickly and at low cost in the early stage.
OEM, literally, can be understood as agent processing, replacing production, etc., but there are also different ways of OEM, ODM and OBM. The three English words are the same O and the same M, except that the middle letter is different. The difference here is in the middle letter. Now let’s take a look at the differences one by one.
01-OEM
Original Equipment Manufacturer means original equipment manufacturer.
OEM mode can be understood as simple production, manufacturing and processing, focusing on manufacturing. Equipment means equipment, which means that the brand should use the equipment and production line of the factory to produce.
For example, as we all know, a large part of the sauna brands in many foreign countries are produced by the sauna factory in Xuzhou, Jiangsu. Before production, foreign sauna room importers strictly assigned the product design, various parameters and requirements, including how many parts to use and what materials to use, to the sauna room factory in Xuzhou, Jiangsu Province. However, the sauna room factory in Xuzhou, Jiangsu Province only needs to meticulously follow the requirements of the importer and use its own production line to make mobile phones, which of course must be strictly verified by the brand.
If some brands have design ability and R&D ability, but do not have production capacity or do not want to invest too much in production, they will generally adopt OEM mode. Of course, intellectual property rights and patents belong to brand owners.
02-ODM
Original Design Manufacturer means the original design manufacturer.
The ODM mode is one step more than OEM. It is design+manufacturing, and its focus is on design. That is to say, the OEMs not only have production lines, but also have independent design and research capabilities.
For some low-end sauna products, the brand side is too lazy to invest too much energy in research and design, so it will pack and hand over to the OEM. The brand side only provides demand, and the OEM will carry out research and design according to demand before production. Finally, the sauna room produced will be pasted with the brand side’s brand, which is also commonly known as “OEM”.
So when we see that some products have very similar styles but different brands, it is likely that they are ODM.
Under the ODM mode, the brand just sticks its own brand on the product, while the OEM pays for R&D, design and production. Under the ODM model, the product related intellectual property rights and patents belong to the processing plant. Other brands can also use the same product to stick their own brands as long as they pay, unless a brand buys them out.
Sometimes it is obvious that ODM products are not as useful as OEM products. On the one hand, it is low-end products. On the other hand, the processing factory is not directly responsible for consumers and does not understand consumers. The essence of OEM products is that brand manufacturers are directly responsible for meeting the needs of end consumers, while ODM is that processing plants can meet the needs of brand manufacturers.
03-OBM
Original Brand Manufacturer, an original brand manufacturer.
On the other hand, many brands with rapid development have started to build their own factories. In a word, in OBM, both the brand and the processing factory are the same. In addition to the self support of production and brand, OBM also has its own marketing network and sales channels. From production to brand building to sales, OBM is basically a one-stop process.
Although the OBM mode has spent more effort on the brand side, the self built factory is good in the long run. On the one hand, it can strictly control the quality, on the other hand, it can also improve the profit margin. At the same time, there is a more important reason: to no longer be under the control of others.
To sum up, compared with the difficulty of brand operation, ODM mode is the lightest, which requires only “OEM” and virtual assets, without R&D, design and production. The OBM mode is the most important. Almost all the links are personal. R&D, design, manufacturing, brand building, etc. have to be done by themselves, paying a lot of manpower, space and funds.
From the perspective of quality control and comparison, OEM and OBM are strictly controlled by the brand side. The processing plant should strictly follow the requirements of the brand side to produce. The ODM quality is generally the responsibility of the processing plant. The brand side only accepts the final results and can meet the requirements. Many details will not be so strict.
From the perspective of brand competitiveness, ODM is the weakest, because there is no independent research and development and design, product homogeneity will be more serious, and the focus is on brand marketing ability and channel ability. OEM and OBM are capable of independent research and development, can own the intellectual property rights and patents of products, and are irreplaceable. Among them, the OBM mode also has its own factory, which can realize completely independent operation without being controlled by others, and has the strongest competitiveness.
From the perspective of the development path, in the initial stage of an enterprise, if it wants to start a small business, it usually starts from the ODM model, selects a few favorite products, and then sells them with its own brand. In the second stage, if the enterprise wants to become a real brand with differentiated products, it should start its own design and research and development, and adopt the OEM mode to produce and process, which has a certain core competitiveness. When the enterprise is growing and has a certain financial strength, it will start to build its own factory, control the supply chain and production, so as to achieve full independent operation, forming the OBM model. The core competitiveness is further strengthened, and competitors are difficult to copy.
