When importing from China, all entrepreneurs are faced with a choice of their business partner. We can come across various types of manufacturers, such as OEM, ODM, or OBM. These terms state the scope of the importers’ influence on the ordered goods’ project, design, and manufacturing process. We answer questions about what OEM is and why it’s worth putting your logo on a Chinese product.
What is OEM? – OEM, ODM, and OBM
OEM (Original Equipment Manufacturer)
OEM is a company manufacturing products that other enterprises can later sell. When choosing this option, you import and then sell other companies’ goods but under your brand. Thus, according to their own project, the exporter manufactures your product and then affixes your company’s logo on it. In the picture below, you can see an example of a product on Alibaba on which you could put your logo.
ODM (Original Design Manufacturer)
In comparison to OEM, ODM manufacturers first design a product according to an importer’s idea, then assemble it. It means that following your demands, they’ll adjust a project or design of your item. In such a case, your company’s logo will also be put on a product. Moreover, you have many possibilities to customize the goods so that they meet your requirements. Below you can see that the manufacturer described the available level of customization in detail.
OBM (Original Brand Manufacturer)
OBM means manufacturers responsible for the whole production chain, starting from a project through assembling to marketing. They’re the rightful owners of the brand and the manufactured items. One of the Chinese OBM companies is Huawei.
Building your own brand
Currently, there is enormous competition in the market for the interest of consumers. Therefore, it’s worth thinking through how to distinguish yourself from your opposition and attract attention to your goods. It’s one of the biggest challenges that most entrepreneurs must face. Importers of articles from China have access to a wide variety of products from different industries and great customization possibilities according to their own needs. Such services create a potential for new, creative projects and patterns.
If we find an interesting product, it’s worth having your company’s logo affixed to it. This way, you become the item’s manufacturer. It means that if the goods you sell will be of high quality, your company will benefit from it. Simultaneously, if you don’t verify your supplier and your articles’ quality turns out to be unsatisfying, your brand will suffer. Thus, you should never forget to verify your business partner and organize a quality control of goods. This way, you’ll ensure that the products meet our requirements and fulfill the consumers’ demands.
What does manufacturing under your brand mean for an importer?
Trademark in China
If you have a Chinese manufacturer produce goods under your brand, you must remember to register your trademark. There is a rule “first-to-file” in China, which means that an entrepreneur who registers a logo first will get the right to use it in China. You should always ensure that your trademark hasn’t been reserved and apply for its registration on that account. Otherwise, if it occurs that your logo has been registered by someone else, legal and financial consequences may be imposed on you.
One could think that if they don’t intend to direct their products to the Chinese market, they don’t need to register their trademark. However, they couldn’t be more wrong. Customs services have the right to confiscate goods manufactured under our brand when we don’t have the right to use a logo affixed to them. Moreover, even if we currently don’t plan on selling products in China, this may change in the future. That’s why the sooner you start protecting your trademark, the better.
Importers’ obligations
Every importer is obliged to ensure that their product is safe for its users and has the necessary documentation. They’re also responsible for preparing an instruction, correct marking, labeling, and packaging. In the case of some products, one must take care of additional documents.
For example, when importing to the European Union, electronics will require a CE mark and a complete set of correct documentation. One of the importer’s obligations is to make sure that their products undergo tests verifying their compliance with European norms, e.g., New Approach Directives. They allow for proving compliance with regulations, gathering mandatory documents, and affixing correct markings.
It’s worth mentioning that when an importer has its products assembled in China, the firm becomes its manufacturer. In the case of goods that need a CE mark, they’ll have to issue a Declaration of Conformity. To do so, an importer can make use of test reports provided by a factory.
What is OEM – Summary
OEM means manufacturers that will put the importer’s company logo on goods. Importing and selling products with your trademark is a big component of building a brand. If you choose a high-quality item, you’ll raise the brand’s prestige and gain consumers’ trust. At the same time, your brand will be associated with top-notch goods. One must remember that an importer is obliged to provide the necessary documentation, markings, instruction, labels, and packaging. When importing under your logo, you must register the trademark in China. This way, you’ll gain exclusive rights to use it and avoid possible problems.