Sourcing

    OEM / ODM explained

    Original Equipment / Original Design Manufacturer

    OEM builds to your design and your tooling; ODM sells you an existing design the factory already owns.

    Full definition

    OEM means you supply drawings and own the tooling and IP — the right model for a differentiated brand. ODM means the factory supplies the design and mold and puts your logo on it: faster and cheaper, but the same product may ship to your competitor. Many US brands validate demand with ODM, then move to OEM tooling once volume justifies exclusivity.

    Worked examples

    • OEM: buyer supplies 3D files and Pantone references; factory cuts tooling
    • ODM: factory model #A123 with buyer logo and retail packaging

    Related terms

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