OEM means that the brand manufacturer does not directly produce products, but uses the key core technologies it has mastered to design and develop new products, control sales channels, and order specific processing tasks through contracts. Entrust other manufacturers of similar products to produce. Clothing OEM means that the brand or trademark of the clothing belongs to someone else. After the other party authorizes it, we only help them process and produce it, but the owner of the trademark and other rights still belongs to the other party. OEM production is very common in my country, especially in the clothing, shoe and hat industries and the apparel industry.

OEM production can reduce the brand’s investment in fixed assets such as factories and equipment; you can have your own products without a lot of capital; you can concentrate on design, research and development, and sales to avoid wasting time; you can use your own Advantages: handing over production-related technologies and work to professional companies can improve product quality and shorten production cycles.

Extended information:

OEM production is a parasitic phenomenon that has existed since the concept of branding. It originated in developed countries. It was originally a game rule for large companies with independent brands and market advantages to find partners to jointly produce in order to reduce production costs and increase brand added value. In view of this, some brand companies have slowly extended their vision and tentacles to developing countries, especially backward areas in developing countries centered on manufacturing. They have used market advantages to obtain the huge resources required by processing sites and actively seek agents. ——OEM processing parties, let them only be responsible for processing the products, and then put their own trademarks on them, and sell them under their own trademarks, thereby expanding their brand influence.

As for those agents who voluntarily produce for others, they are generally unknown manufacturers and companies. They are limited by technology and funds, and cannot conduct independent research and development. They have no place in the market and are unable to seize market share. I have no choice but to lower my profile and ask for orders from brand companies. In order to survive on orders, I "make wedding clothes for others" and produce for others. At the same time, with limited orders, they fought tooth and nail and lowered each other's prices at the expense of their own profits, resulting in OEM manufacturers competing for each other's orders.

Baidu Encyclopedia - OEM