Which type of apparel manufacturing in China is more profitable? How should you choose a factory and promising market niches? Let’s look at the pros and cons of ODM (Original Design Manufacturer) and OEM (Original Equipment Manufacturer). Let’s start with ODM production.
Original Design Manufacturer (ODM)
ODM is contract manufacturing of products with unique designs or special characteristics. In this case, you create the sketches and models, while all necessary preparation for launching production and the sewing process itself are handled by the Chinese contractor.
A definite advantage is your unique design, which gives you a serious competitive edge in the market. Among the downsides: firstly, your company must have the necessary resources, such as an in-house team of designers, technologists, and a prototyping facility. Secondly, constant supervision over production is required to ensure your design solutions are precisely implemented—this demands persistent control of the production process at the Chinese factory.
Different countries have different production standards, requirements, and specifics, which you need to take into account when working with foreign contractors. For ODM production, you’ll need either your own staff in China or a reliable and diligent agent—preferably someone from your own country so you “speak the same language”.
Original Equipment Manufacturer (OEM)
OEM is contract manufacturing of products that already exist, but under your brand. In fact, this means copying existing goods in China.
Advantages of this type of production include: quick turnaround (the models are already at the factory, so production can start with minimal lead time) and savings on resources (you don’t spend money on developing and introducing new models).
The disadvantages: first, your product won’t be unique (and you’re lucky if the factory sells the same models to various countries). More often, the manufacturer is oriented toward one specific country. Second, if the product isn’t tailored to a specific market, it usually won’t be adapted for it. This pertains to sizes, design, and other details—for example, the thickness of the padding in winter jackets.