As we all know, manufacturer is an essential part of clothing industry. But what most people don’t know is how to choose the most suitable manufacturer for your business. There are mainly two types of manufacturers, OEM Clothing Manufacturer and ODM Clothing Manufacturer. Some of us may seem to be unfamiliar with these two terms. Don’t worry, you will have a thorough understanding of them both after reading this article.
I’m sure we all aware that choosing the right manufacturer for clothing brands is of great importance to our business. On one hand, the right manufacture will help accelerate the production process without compromising the quality of clothes. On the other hand, the right manufacture can help you deliver the concepts of your designs to consumers. This article will explore the key differences between OEM and ODM clothing manufacturers so that you can make informed decisions for your fashion brand. Besides, you will learn about their services and processes, thus help you choose which one meets your needs best.
What is an OEM Clothing Manufacturer?
Definition of OEM
OEM refers to “Original Equipment Manufacture”, meaning manufacturers do not produce products directly, but are responsible for designing and developing new products and choosing sales channels by utilizing the core technologies they possess. The OEM’s specific production tasks are entrusted to other manufacturers of similar products through contractual ordering. Then, the ordered products are bought out at a low price and directly labeled with their own brand trademarks.
Explanation of OEM manufacturing process
When it comes to the production process of OEM manufacturers, the first thing you should know is that OEM manufacturers can put custom designs from clients into production. OEM manufacturers can customize the production of products that match their brand image and market positioning according to customers’ needs and requirements. This kind of customized production can meet the individual needs of customers and improve the market competitiveness of products.
As someone working in the clothing industry, we all get specifications and requirements from our clients every day, but how to produce the clothes our clients want? OEM manufacturers are able to meet the needs of different consumer groups. They can customize production according to customers’ requirements and provide personalized products and services, thus satisfying more customers.
Key characteristics of OEM manufacturers
The first characteristic of OEM manufacturers is product customization, which allows OEM manufacturers to customize their products according to customers’ needs and requirements, thus meet their brand image and market positioning. The next characteristic of OEM manufacturers is production specialization, which allows OEM manufacturers to provide high-quality products with professional equipment and technology. The last characteristic of OEM manufacturers is economy, which allows OEM manufacturers to control production costs effectively and offer more competitive prices. The last characteristic of OEM manufacturers is management specialization. They are able to effectively manage the supply chain to ensure timely supply of raw materials and efficient operation of production.
Pros and cons of choosing an OEM manufacturer
All manufactures have their advantages and disadvantages. OEM manufacturer is no exception. Here are some pros and cons of choosing an OEM manufacturer for your reference.
Pros: On one hand, choosing an OEM manufacturer can help you enter the international market and participate in international competition. The domestic garment industry is becoming increasingly competitive and the market is becoming saturated. OEM manufacturers can produce for foreign brands, which enhances the global awareness of enterprises. On the other hand, choosing an OEM manufacturer can save your sales investment. When a company faces a foreign market, it is difficult to sell its products independently due to different business habits of each country. An OEM manufacturer can help reduce friction between companies, lower the large amount of sales capital that companies should have invested, and enable companies to adapt to operating overseas.
Cons: If you choose an OEM manufacturer, you may face problem like supply chain disruption. Natural disasters, raw material shortages, business closures and other situations can cause supply chain disruptions. In addition, choosing an OEM manufacturer may lead to a lack of branding. When there are more and more products produced by OEM manufacturers, there are fewer and fewer brands owned by the company.
What are the Key Differences Between OEM and ODM Manufacturers?
Comparison of services offered
There are many services offered by OEM manufacturers, the main ones being the production of the product, the packaging of the product and the distribution of the product. In addition to this, the OEM manufacturer is also able to perform quality control of the product. The difference between the services offered by an ODM manufacturer is that it is able to design the product. In addition to this, the services offered by an ODM manufacturer include product development, product manufacturing and brand registration.
Differences in the manufacturing process
The first difference in the manufacturing process is the level of customization available. ODM manufacturers have the ability to design their own garments and can customize them according to the customer’s needs and requirements. OEM manufacturers can only produce garments according to the design drawings and cannot design garments according to the customer’s requirements.
Another difference in the manufacturing process is cost implications. OEM manufacturers only need to produce products according to customers’ requirements, so the cost is relatively low. ODM manufacturers, on the other hand, need to carry out product design, so the cost is usually higher.
Timeframe for production
There is also a difference between OEM and ODM manufacturers in terms of timeframe for production. OEM manufacturers usually have strong production capabilities and are able to produce large quantities of products in a shorter period of time. This allows them to meet the high volume demands of their customers. Meanwhile, ODM manufacturers have a longer production time as compared to OEM manufacturers because they need to design their products first and then produce them.
Intellectual property considerations
The intellectual property considerations of an OEM manufacturer and an ODM manufacturer are also different. The OEM manufacturer generally does not own the intellectual property rights because the intellectual property rights often lie with the producer of the brand. OEM manufacturer merely plays a role of processing, manufacturing, and producing. On the contrary, ODM manufacturer works on the design of the product. Therefore, ODM manufacturer owns the intellectual property rights, while the buyer will own only the copyrights of the brand.
How to Choose Between OEM and ODM Manufacturers?
Factors to consider when making a decision
When choosing between OEM and ODM manufacturers, you need to take a lot of things into consideration. Below are the four factors you need to consider before making a decision.
1.Business model
Business model is seen as a core reflection of corporate strategy and is viewed as a tool for improving the organization. When selecting a manufacturer, an enterprise needs to consider its business model so that it can better recognize market demand and the competitive landscape, and determine its own positioning and development direction.
2.Target market
Target market is the group of consumers that a company has selected as its marketing target. Before choosing a manufacturer, you need to identify your target market so that you can better understand your consumers and design and produce according to their requirements in the production process.
3.Budget constraints
Budget constraints mean that you need to know your budget well and not let the actual expenditure exceed your budget. Different manufacturers have different financial requirements. Before making a choice, you need to consider your budget and make the most appropriate choice according to it.
4.Design capabilities
Design capabilities determine whether we can design the clothes independently or not. Before choosing a manufacturer, we need to know that not all of them can carry out product design. We need to consider our design capabilities so that we can make the right choice.
Tips for selecting the right manufacturer for your brand
To help you make your decision better, here are a few tips for selecting the right manufacturer for your brand.
Tip One: Ask yourself whether you can design on your own or not.
OEM manufacturers give the garments directly to the factories for production. ODM manufacturers design and produce the garments according to the customer’s requirements. If you have the ability to design on your own, you can choose OEM manufacturers. If not, you need to choose ODM manufacturers.
Tip Two: Estimate your cost of inputs.
ODM manufacturers design and manufacture products independently and are able to provide more customized services to customers, but the input cost may be higher. In the meantime, OEM manufacturers focus more on production efficiency and cost control. You need to choose the right manufacturer according to your cost of inputs.
Tip Three: Learn about the manufacturer’s experience.
An experienced manufacturer is able to solve production problems and provide the best solutions for their customers. Before you choose between an ODM manufacturer or an OEM manufacturer, you need to know about their production experience so that you can make the right choice.
In conclusion, this article explains what OEM and ODM clothing manufactures are from different aspects, such as their definitions, key characteristics and manufacturing processes. We also understand the differences and pros and cons of each kind of clothing manufacture. Here, I sincerely suggest you to go through this article again to get a better understanding of different clothing manufacturers. And I recommend you to think carefully before deciding your manufacture, because it is very important to your clothing brands.
That’s all for the introductions from our side. I believe, as someone who’s been working in clothing business, you do have some thoughts on manufacturers. We welcome you to share your own experiences with us by leaving a comment on the website. If you need further information about manufacturers or any other assistance relating to clothing industry, please do not hesitate to contact us.
