Original equipment manufacturer, or OEM, is a term that refers to a company that produces components or products that are used in another company’s end product. OEM is an important concept in manufacturing and has a significant impact on branding and pricing strategies. In this article, we will be understanding about OEM and it’s application, and provide examples of OEM in various industries.

What is OEM?

OEM refers to a company that produces components or products that are used in another company’s end product. For example, a computer manufacturer might use an OEM to produce the components that are used in their computers, such as the motherboard, power supply, and graphics card. The OEM produces these components to the computer manufacturer’s specifications, and the computer manufacturer then assembles the components into the final product.

How Does OEM Work?

In the OEM process, the company that produces the components or products typically does not sell them directly to the end consumer. Instead, the OEM sells the components or products to the company that uses them in their end product, which then sells the final product to the consumer. The OEM may or may not be credited in the branding of the final product.

OEM and Branding

OEM can have a significant impact on branding. In some cases, the OEM may be credited in the branding of the final product, while in other cases, they may not be mentioned at all. For example, a smartphone manufacturer might use an OEM to produce the camera module for their phone, but the OEM is not mentioned in the branding of the phone.

OEM and Pricing

OEM can also have an impact on pricing. In some cases, the company that uses the OEM’s components or products may be able to sell their final product at a lower price than if they had produced the components or products in-house. This is because the OEM may be able to produce the components or products more efficiently or at a lower cost than the end company could.

For Example, CG’s experience with OEM manufacturing in China has been positive, and they have produced a range of products, including home appliances, smartphones, and other electronic gadgets. The OEM products produced by CG are of high quality and come with the same standard of features that are found in their regular products.