what is an original equipment manufacturer oem 
an original equipment manufacturer oem is a company whose goods are used as components in the products of another company known as a value added reseller var the var works closely with the oem which often customizes designs based on the var s needs and specifications julie bang investopediaunderstanding oemoems make parts to sell to vars although some oems make complete items for a var to market they usually don t determine the finished product an oem may manufacture electronic components for a company like samsung the var that makes high definition tvs an oem may sell customized fasteners to ralph lauren with the branded monogram rl traditionally oems focus on business to business sales while vars target the public or end users car parts such as exhaust systems or brake cylinders are manufactured by oems the oem parts are then sold to an auto manufacturer which assembles them into a car the completed car is then marketed to auto dealers to be sold to individual consumers however oems may also sell to the general public an individual can buy oem parts directly from the manufacturer or a retailer that stocks those parts to make car repairs oem vs aftermarketthe aftermarket is the market for replacement parts accessories and equipment for the care of the original product such as an automobile after it has been sold to a consumer the oem manufactured the original parts but the aftermarket equipment is made by another company that a consumer buys as a replacement aftermarket replacement parts are often reverse engineered to be manufactured close to the original specification of the oem part a ford car owner may need to replace a car thermostat manufactured by the oem abc thermostats the consumer may buy the oem part a duplicate of their original abc thermostat or an aftermarket or generic part made by another company consumers often choose an oem part over a generic one for consistency however some aftermarket equipment proves more successful than the oem replacement hurst performance a manufacturer of gear shifters for automobiles became known for their superior performance and car buyers preferred them to the original part 1 eventually hurst shifters were so trusted that manufacturers chose to install hurst shifters in their factory designs effectively turning hurst into an original equipment manufacturer 2original equipment manufacturer oem vs original design manufacturer odm an oem differs from an original design manufacturing odm a type of private labeling for manufactured parts an odm produces a product to meet a client s specifications the client labels and sells the product under a brand name an odm does not have as much flexibility as an oem since the client customizes a design however original design manufacturing has lower costs for research and development leading to lower prices for the end consumer odm products typically have a lower minimum order quantity making them more attractive to smaller clients 3technology and oemoem can sometimes be used as an adjective as in oem parts or as a verb such as when a manufacturer plans to oem a new product this evolution can be attributed to the computer hardware industry var companies such as dell and hewlett packard accepted branded parts from outside sources in their products over time in the tech industry oem became synonymous with companies that rebrand or openly use other manufacturers products for resale this reflected a shift in the manufacturing dynamics and defined which company was responsible for warranties customer support and other services as dell incorporated intel processors in its computers dell advertised that it had intel inside and marketing materials suggested that intel and dell were equal partners in the processor and computer design dell was considered the oem both in the minds of companies and the public 