ODM |Original Design Manufacturer| Functioning of ODMs

 An ODM (Original Design Manufacturer) designs and produces a product that is sold and marketed under the name of OEM (Original Equipment Manufacturer). In other words,ODM provides “ready-to-go” products for the OEM. These are also known as Contract Manufacturer as they are capable of designing and manufacturing products for OEMs.

Why ODMs?

OEM stands for Original Equipment Manufacturers they essentially design a product from the ground up and then contracts another company to manufacture it for them. OEM come up with the design, then contract several third-party manufacturers to handle the mass production. These third-party manufacturers are ODM. OEMs prefer to assign ODMs as they get benefitted with low labour inputs, proximity to markets and reduced transport cost.OEMsalso use them in areas where direct ownership by foreign organizations is prohibited or can’t be easily obtained. Meanwhile, OEMs can focus more on sales and marketing of its products while ODM is focussing on the design and manufacturing of products.

The Functioning of ODM:       

Let’s understand the functioning of ODM with the flowchart: 

ODMs firstly look for the product requirement or product specification from the firm. Now according to the product category and specification, it is assigned to the specific department who go through their specification and specs thoroughly for further study and discussion. Now if ODMs can work on the firm’s specific requirement than a contract is signed between two according to company norms. The firstly ODM start working on in its design and technology if the design is passed as the requirement than approval is given for mass production. After that testing is done by the concern department and product is made ready to dispatch. 

Types of ODMs:

In ODMs manufacturing is commonly categorized into “White Label “goods and “private label “goods. White label goods are made in bulk amounts, they distribute their generic finished products to different retailers, who thereafter sell them under their own brand name.

Private Label services providers sell finished products exclusively to a particular retailer. The difference between white label and private label is usually product specific and manufacturers offer both.  Both white label and private label allow you to benefit from much lower costs in bringing a product to market, letting you focus on other core parts of your business. 

Advantages of ODM:                       

1.  ODM take whole responsibility, you do not have to spend time and money designing the product.
2.  By forming a partnership with an ODM firm, you can be benefited from the skills and experience of an established developer and manufacturer.
3.  ODMs will generally benefit you by offering a lower price. 
4. ODMs help you to spend more time and effort on your core operations as well as technical aspects are taken care of by the ODM manufacturing firm, so that you can focus more on brand development, testing customer responses to different products and ensuring your product launches successfully become more rewarding.