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2 min read Suppliers

You just PAID for the molds. But do you OWN them?

You just PAID for the molds. But do you OWN them?

Most founders use "OEM" as a synonym for "factory."

In China and SEA, that is how you get surprised later. The real difference between OEM and ODM is not how much they customize. It is who owns the design.

Customization is a spectrum. Ownership is binary.

CM (Contract Manufacturer) builds what you designed.

  • You own: spec, CAD, schematics, firmware source, test limits, packaging.
  • They own: the production process (line, jigs, quality system, operators).
    CM is the best when you want control and can manage engineering changes.

In strict terms, OEM (Original Equipment Manufacturer) means: the factory manufactures a product defined by you.

  • You provide the design package (or you pay them to create it for you and you own it).
  • Their job is industrialization: DFM, tooling build, fixtures, yield, scaling.

OEM confusion happens because many suppliers use "OEM" to mean: "we can make it for you, and we can also tweak it."

But if you can take the full design to another factory without asking permission, you are in OEM territory.

ODM (Original Design Manufacturer) means: the supplier owns the base product design and sells you a version of it.
This includes what you called "as is."

  • White label: logo, packaging, maybe color.
  • Cosmetic changes: new enclosure, button layout, minor features.
  • Platform changes: bigger tweaks, but still on their architecture.

A new enclosure can still be ODM if they keep the CAD, PCB source files, firmware source, and test software, and can sell the same platform to someone else.

So the shortcut rule:

  • "As is" private label is usually ODM.
  • "New enclosure" is still usually ODM unless you own the full design package.
  • OEM is when the product is portable, not when it is customized.

China has more mature ODM ecosystems in many categories, so ODM offers are everywhere. South-East Asia often has strong assembly and good CMs, but parts, tooling, and sub-suppliers may still route through China.

Practical ownership checklist (use this on the first call)
Ask for these in writing:

  • Full file handover: native CAD + STEP, schematics, Gerbers, firmware source, test software.
  • Tooling ownership: molds and fixtures belong to you and can be moved.
  • Exclusivity: can they sell the same product to another brand?

Names do not matter. Ownership does. Make sure you're clear with who owns what.

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