An original design manufacturer is a company that designs and manufactures a product that is eventually
rebranded by another firm for sale. Such companies allow the firm that owns or licenses the
brand
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create ...
to produce products while having to engage in neither the detailed engineering work required to specify a product for manufacturing nor the organization and running of a
factory
A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. ...
. (The ODM products may be the brand owner's primary business or may be a supplement to another line of business, such as general retailing.) This is in contrast to using a
contract manufacturer
A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products (in which case it is a turnkey supplier). It is a form of outsourcing. A contract manufacturer performing packaging operations is called copacker ...
, where the contracting company would design the product and supply those specifications to the manufacturer.
Original design manufacturers have grown in size in recent years and, , many have the scale to handle production in-house for the products that are branded by the buying firm.
This model is especially used in international trade, where a local original design manufacturer is used to produce goods for a foreign company that sees some advantage in the transaction, such as low labor-inputs, transport links or proximity to markets. Innovative and/or patented technologies developed/owned by the original design manufacturer are another cause for this product distribution model. original design manufacturer models are also used where local ownership-laws possibly prohibit direct ownership of assets by foreigners, allowing a local firm to produce for a brand company - either for the domestic market or for export.
This type of
business is part of "
outsourcing". For example:
Compal Electronics makes
notebook computer
A laptop, laptop computer, or notebook computer is a small, portable personal computer (PC) with a screen and alphanumeric keyboard. Laptops typically have a clam shell form factor with the screen mounted on the inside of the upper li ...
s and
monitors, and operates as a mass producer for numerous brand companies, assisted by low labor-costs, low-cost transport, and the near-commodity nature of the physical inputs (in Compal's case, computer components). , Taiwanese original design manufacturers made ninety-four percent of all notebook computers. Some companies such as Flex and Wistron are both original design manufacturers and providers of
Electronics manufacturing services.
Post-2016 Nokia phones (
HMD) is an example of a firm which relies on original design manufacturers. In late 2019, it switched from relying on only one original design manufacturer to multiple original design manufacturers.
Intellectual property
Original design manufacturers create their own
intellectual property
Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...
and are very proactive in
patent
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...
ing it. Most of their patents are filed in the US, China, and Taiwan.
See also
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White label product
A white-label product is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they had made it.
The name derives from the image of a white label on the packaging that ...
*
Product rebranding
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Electronics manufacturing services
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Original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
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Contract manufacturer
A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products (in which case it is a turnkey supplier). It is a form of outsourcing. A contract manufacturer performing packaging operations is called copacker ...
References
{{Major OEMs
Brands
Design companies