1.OEM is the abbreviation of English Original Entrusted Manufacture, which is an OEM production method. This means that brand producers do not directly produce products, but use the key core technologies they have mastered to design and develop new products, control sales channels, and entrust specific processing tasks to other manufacturers of similar products through contract ordering.

Then the ordered products will be bought out at a low price and directly labeled with their own brand trademarks. This cooperation method of entrusting others to produce is referred to as OEM. The manufacturer that undertakes the processing task is called an OEM manufacturer, and the products it produces are called OEM products.

2. The characteristics of OEM products are: technology is outside, capital is outside, the market is outside, and only production is inside. Domestic custom is called collaborative production or three-way processing, commonly known as processing trade.

Extended information:

1. Reasons for the development of OEM production methods:

(1) Caused by the social division of labor in production: In industrial society, Because of considerations such as manufacturing costs and transportation convenience, well-known brand companies are generally willing to find other companies for OEM or ODM.

(2) Intermediaries - caused by the profit struggle between commercial enterprises and production enterprises: When the seller's market position and surface pattern are deep and wide enough, the seller will inevitably Shift profit margins to production-oriented enterprises.

2. Advantages of the OEM production method:

(1) For well-known brand enterprises: OEM reduces the occupation of production funds by the entrusted enterprise and reduces the risk of market expansion. Compared with setting up your own business, merging, joint ventures, and mergers, OEM commissioned processing takes up the least amount of funds for brand companies.

(2) For entrusted enterprises: OEM enables idle production capacity to be fully utilized, equipment depreciation is realized, unit product production costs are reduced, and employees' income is guaranteed. At the same time, it promoted the technological progress of the enterprise, accelerated the speed of equipment upgrading, and cultivated a group of technical experts and technical staff.

Baidu Encyclopedia - OEM products

Baidu Encyclopedia - OEM production