OEM is often the word that comes to mind when one thinks about producing their own cosmetic products.
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In this article, we will be explaining details regarding cosmetics ODM and its difference with OEM. In the end, we will also be introducing the 3 points we think are important when choosing a cosmetics ODM partner in Japan.
ODM stands for 'Original Design Manufacturer'. ODM is an abbreviation for Original Design Manufacturing. Cosmetics ODM is a manufacturing method in which an ODM company plans, designs, develops, and manufactures cosmetic products under the brand of the buyer.
This enables the buyer to pick an off-the-shelf cosmetic product that is ready to go without any planning or know-how.
There are also ODM companies whose support extends to marketing and logistics.
Let's take a look into the differences between cosmetics ODM and OEM.
In short, an ODM is a company that designs and manufactures a product. In the cosmetic sector, a lot of companies use this term as a 'we do everything for you' statement. However, it actually means that the ODM company rebrands existing products from its catalog for other companies to market.
You probably come across a lot of products that look the same except for the brand print on Amazon. That means they are products coming out of the same ODM.
OEM, on the other hand, is when the manufacturing company designs a product originally for you or produces a product that was designed by you.
We think there are 3 key benefits of using cosmetics ODM.
As the seller will be re-branding an off-the-shelf product of the manufacturer, they will not have to think of a concept or plan the product.
This is useful for people who want to launch a product without having to do the necessary research and obtain the know-how.
Developing an original product from scratch requires an R&D process which can take up to months. This is not limited to formulation but also the packaging materials and design as well.
When it is an ODM product, none of this will be necessary and the product will be ready to order and delivered in a much shorter span compared to an OEM product.
Making an original OEM product requires a certain quantity. This can be 500 or 3,000 depending on the product.
However, ODM products are often in stock and can be delivered in a few days.
Even if the manufacturer does not have it in stock, they will still manufacture a certain amount of products and provide the required quantity from their inventory.
There are also downsides of cosmetics ODM which makes it not for everyone.
As these are off-the-shelf products, there will be no originality to the product. For companies that aim to differentiate their products from others in the market, cosmetics ODM products will not be a viable option.
In the case of an OEM product, the buyer has the freedom to choose from thousands of different containers and packages.
However, for cosmetics ODM products, this is different. Buyers will be limited to the options that the manufacturer has in their inventory, in most cases.
One way to work around this is, using an off-the-shelf formulation with original packaging.
Of course, this will bring the MOQ quite a bit up since the containers will be required to be procured.
In this section, we will be explaining the 3 key points we think you should keep in mind when choosing your cosmetics ODM partner.
At least in Japan, it is difficult to run into ODM-only companies. It is mostly OEM companies that also offer a set of ODM products.
Some companies will only have 1-2 products while others have dozens. Working with a company that offers a wide range of products will be more practical in the long term when you want to add new products to your existing catalog.
Cosmetics ODM products are off-the-shelf products that are often preferred for their speed and practicality. By nature, this comes at the cost of flexibility, which is inevitable.
However, the extent of this also varies from manufacturer to manufacturer. Some companies may be able to offer minor changes to the formulation and a few different options on the packaging materials.
One of the reasons why many people prefer ODM over OEM is the minimum order quantity.
If the cosmetics ODM company has the product in their inventory, they can swap the label very easily. Some companies may do this from as little as 20-30 products while others may require 100 or more.
Also, there are companies that do not hold stock and require OEM-like quantities also.
In this article, we explained cosmetics ODM with its pros and cons while comparing it to cosmetics OEM.
Even though we mainly specialize in OEM -as can be seen in our company name- we are also experienced with cosmetics ODM.
We will appreciate any inquiry from your end regarding cosmetics ODM and OEM via the button below.
OEM and ODM have often been found in the design and production industries, and people stay confused as they are pretty similar regarding the distinctions between the two names. The words ODM, OEM, describe various configurations of fabrication activities. The distinction between these production systems is the extent to which a brand owner undertakes design, engineering, and production activities.
If you have an idea for a new product and are looking for a reliable manufacturer to partner up with and bring your products to market. Before you contact a manufacturer, you'll need to understand the key differences between these two unique business services, and this article covers everything you need to know.
An ODM, or 'original design manufacturer,' is a company that has the capabilities to design, develop, manufacture and sell products themselves. ODM often designs and develops products independently, or in collaboration with a client. All you need to do is give them the idea of the design you want, and they can also show you their existing product lines, and you can choose from them.
Advantages Of ODM Service
1. You don't need to make large upfront investments for R&D and setting up a custom production line.
2. You can save a lot of capital because you don't need to control the tooling costs.
3. you can focus more on marketing your products.
4. don't have to worry about expertise or resources that meet your design specifications.
5. Save money even if you are purchasing low volumes of products. This is because ODMs usually produce significant quantities to sell in smaller lots.
6. Usually faster to market than OEM
Disadvantages Of ODM Service
1. Changing suppliers is difficult because they have the design.
2. If your sales volume is high, the supplier is likely to compete with you.
3. It is highly likely that your product appears similar to that of your competitors
If you want to learn more, please visit our website OEM ODM Cosmetics.
4. Other companies may start selling the same product as you
5. You don't get the protection of intellectual property
6. You are responsible for any problems during sampling and product control
There are many industries that partner with ODM manufacturing firms, ODM products are more common in more R&D and capital intensive industries.
ODM More common industries: Electronics; Machinery; Medical devices; Kitchen utensils
ODM Less common industries: Clothing; Home textiles; Accessories
OEM stands for 'original equipment manufacturer,' which refers to a company is in charge of developing, constructing, or selling the product to another company or company which is responsible for the distribution of its product following its standards. For example, the Apple iPhone was created and built by Apple and subsequently licensed to create Foxconn.
If you are a manufacturer and don't have the capabilities to design, create, test, and brand products, you should offer OEM manufacturing and provide basic manufacturing services to help businesses mass-produce products.
Advantages Of OEM Service
1. You will own all intellectual property rights. Your product specifications will also be protected from copyright infringements.
2. You can quickly get quotes from manufacturers because you will have detailed specifications and designs.
3. You have a better bargaining position and can easily switch to other suppliers.
4. It may be more difficult to copy your product
5. Less risk in manufacturing because a working prototype is available
Disadvantages Of OEM Service
1. Changing suppliers is not easy because you need to change the entire supply chain.
2. It isn't easy to negotiate a slow price increase.
3. Material or process changes may have a serious impact on product quality.
4. Product development can add significantly to the time it will take to get the product to market
It depends on your needs. Do you already have a finished product design ready for manufacturing? If so, an OEM is a right partner for you.
If you are considering developing a product or are already in the process, we generally suggest working with an ODM partner. We believe that getting your manufacturing partners involved right at the beginning of the process is a best practice you should follow.
If you're thinking of starting an OEM or ODM business you should consider the following things:
There are three primary ways to find OEM and ODM manufacturers.
The biggest factories for manufacturing you can contact online are Alibaba, Made in China, and Global source. The suppliers explain their services details to potential customers. Some of the services they provide are OEM, ODM, Customizing. All this information is listed on the product listing page. Social media platforms also have many suppliers where you can check out a variety before reaching out to them. However, most are wholesale websites, so be specific in your search.
You may find it unreliable to find suppliers online. Another option is physically visiting wholesale markets in your locality to identify suitable suppliers. This is advisable if you are in big manufacturing countries such as China. Meeting a supplier physically is convenient, and you are assured of quality since you can see the products for yourself.
If you live far from China, you can invest in a trip to a trade fair. It will cost you, but it will be a one-time and worthwhile investment since you will find a reliable supplier who can become a lifelong partner for supplying your business.
New importers mostly prefer sourcing agents. However, ensure you engage a professional sourcing agent. The agents have many resources and information on the best supplier or manufacturer to meet a client's needs.
Like Union Source: our services include: guiding you to choose a suitable manufacturer, negotiating prices, following up on production, ensuring high or standard quality is met, testing the products, and arranging for shipment. As a customer, this is very convenient for you since you don't have to get your hands dirty. No upfront charges, no experience needed. We will guide you step by step.
Whether you find a supplier offline or online, there are key indicators of finding a suitable manufacturer that you should follow:
Here are seven main steps in the process of OEM China & ODM products. They may step vary for different products.
Step 1: Creating a prototype or designing your product
The factory will determine the most suitable formula according to your needs and produce pre-production samples to meet customer needs. The customer receives the model for testing and proposes modifications or approves mass production.
Step 2: Inspection factory
After the test, the customer must go to the factory for internal inspection. This is assuming that they are satisfied with the samples and their pricing. Other factors that customers will check are R&D capabilities, production capabilities, and workshops.
Step 3: Signs a contract with the factory
After the customer visits the internal factory, he signs a contract with the factory. The factory charges customers a deposit for mass production, which varies from factory to factory.
Step 4: Packaging designs
Packaging design and purchasing packaging are the responsibility of the factory. This is usually a free service. However, customers will guide them based on the type of packaging design they like. Then hand over the work to a professional packaging factory to make several samples for selection before the contract.
Step 5: Product Testing
Confirm materials, ingredients, and packaging design. The factory entrusts the FDA to conduct product testing and filing.
Step 6: Delivering
The factory conducts product filling, packaging, and QC processes. The whole process takes fifteen to twenty days to complete. After the manufacturing process is completed, the customer pays the balance to the manufacturer.
Step 7: Shipment
If no purchasing agent is involved, the factory will arrange the delivery. Choose the transportation method according to the delivery time and the number of goods.
OEM focuses on manufacturing products according to customers' preferences for design and specifications. Therefore, it is the customer's responsibility to conduct research and develop the products they want. The project may take several months to complete.
On the other hand, ODM caters to all these processes. Since the project is completed faster, this is an excellent advantage for the time factor. You can also save a lot of money because you interact with fewer people in a shorter time. However, the client does not own the IP. The customer must compete with the product and customize the options provided by the model.
Choosing the best model between OEM and ODM depends on the customer's product, market, and goals. However, OEM is recommended in most cases because you own the IP. ODM is a cheaper option, but having IP is more important.
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