OEM (2024)

FAQs

OEM? ›

OEM stands for original equipment manufacturer. In the business world, this means a company that makes a product to be sold by another company under its own name. For example, an OEM computer manufacturer might make computers for a brand like Dell or Lenovo, who then sell the products under their own brand names.

OEM stands for Original Equipment Manufacturer. The OEM is the original producer of a vehicle's components, and so OEM car parts are identical to the parts used in producing a vehicle.

Every piece of the car as it exits the factory is an original part. Anything that is replaced, including a tail light, is no longer an original part. However, OEM parts are the same as the original in the sense that they are made by the same manufacturer, with the same materials, to the same specifications.

OEM stands for Original Equipment Manufacturer, and ODM stands for Original Design Manufacturer.

An OEM is often the direct client of a retail company that sells directly to consumers. For instance, a Lenovo laptop computer's parts aren't all manufactured by Lenovo. Some parts, such as its processor or memory module, may be the products of an OEM.

They employed a total of 2,436,733 people in 2021. Germany-based Volkswagen AG is the leading automotive OEM in the world (by revenue).

The main advantage of OE parts is that you know they will fit your vehicle perfectly and they will work with all other original equipment on your car. OEM and Aftermarket parts may also fit and work perfectly, but there's always a slight chance that something could go wrong.

Due to their better quality, OEM parts tend to cost more than aftermarket parts. Limited availability. With a higher demand, OEM parts can have limited availability and take longer to order and get into stock.

OEM parts are guaranteed to fit and almost always come with a manufacturer-backed warranty. They may cost more than what the aftermarket offers, but the trade-off is a likely simpler purchase process. If you're looking for a fast, simple experience and don't mind paying extra, OEM is often the way to go.

What's the opposite of OEM? ›

ODM (Original Design Manufacturer) is also referred to as private labeling or white label products. In this case, the manufacturer has an existing product design and the customer may make slight changes to sell it under their own brand name. Some examples of changes include branding, colors, or packaging.

Some OEM parts are generally considered superior to any available aftermarket equivalent. For most, the difference isn't important. For some key components, you might need to do some research or speak to a trusted mechanic to decide if an OEM or aftermarket part is right for you.

Apple can be referred as a Value-Added Reseller (or VAR). They purchase components from OEMs, add value through their proprietary technology and software. Then, they sell the final product to consumers. VARs strategically don't make all the parts they need for their final product.

Does OEM Mean Fake? No, OEM does not mean fake. OEM refers to the original equipment manufacturer, which is a company that produces components or products for use in other companies' end products. These components are often of high quality and meet the specifications the purchasing company requires.

Products from an OEM are normally cheaper thanks to economies of scale. As the company partners with others to manufacture goods in large numbers, both the price and production time are significantly reduced. However, you need to verify what you're getting when you purchase a product from an OEM.

An original equipment manufacturer (OEM) provides components for the finished products of a value-added reseller (VAR). OEMs manufacture for business-to-business sales, while VARs sell to the public or other end users.

When we talk about automotive manufacturers, we mean the 14 major so-called OEMs (Original Equipment Manufacturers), which today have more than 5 dozen automotive brands under their umbrella. These include Volkswagen, Ford, Stellantis, Toyota, Honda, BMW, Mercedes, GM, Nissan, Geely, Hyunday, Tata, etc.

The United States of America-based Tesla Inc is the leading automotive OEM in the world (by market cap).

Tier 1 & Tier 2 suppliers refer primarily to suppliers of the automotive industry. A Tier 1 supplier supplies products (usually parts) directly to an OEM (What is an OEM?). The difference, then, is that a Tier 2 supplier supplies products to a Tier 1 supplier (who then supplies the parts to an OEM).

OEM parts tend to be more expensive, but are easier to choose and usually are backed by a one-year warranty. Some aftermarket parts are equal to or better than the OEM part. If the price seems too good to be true, beware of poor quality parts.