OEM means “original equipment manufacturer“. OEM business relationship can be regarded as a kind of sales relationship. The buyer and OEM supplier are to be called the brand owner and OEM manufacturer respectively with common Therefore, the meaning of OEM, from the perspective of buyer, is the act of outsourcing production and providing it to the market in the form of its own brand; from the perspective of supplier, it is the transaction form of producing the other party’s brand products according to the buyer’s requirements and being sold by the buyers. The buyer’s sales channel and brand advantage and the manufacturing advantage of the supplier constitute the overall competitive advantage of the product and bring practical benefits to both sides.
OEM is commonly known as “OEM production” In China, due to different understanding, regional and cultural differences and other factors, OEM is also known as “entrusted production“, “entrusted processing”, “fixed brand manufacturing”, production outsourcing and so on. Although the appellations are different, their essence is the business and production mode is the original unit (brand owner) entrusts the contract for product development and manufacturing, uses the original unit’s trademark, and is sold by the original unit.This business model has been operating internationally for many years and has been effective. What OEM represents is actually an idea of division of labor, an idea of refining competition, and its core is that enterprises should “do what they are best at”.
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