What is OEM

OEM stands for Original Equipment Manufacturer. These are manufacturers who resell another company’s product under their own name and branding. It also refers to the act of a company rebranding a product to its own name and offering its own services such as warranty, support and licensing of the product. Original Equipment Manufacturers are not the original manufacturers but are customizers. Sometimes OEM is also referred to as grey market or bulk packed or white or black box.

All the computer system components and the software vendors make two versions of their product which differ on the basis of their distribution channel. Retail is the main consumer channel while OEM is another type of channel which distributes to various system manufacturers.

The main purpose of the OEM is reselling. This service is mainly for the purpose of earning revenue. The company interacts with other companies for reselling of a particular product and then the product is transferred and given a new brand name. This is one of the types of forms for the purpose of marketing a product.

For example –

Automotive Products have OEM marks. The initial manufacturers also place their company’s mark while the cars are manufactured so that the users are made aware about the originality of the product. Computer System has different components that are of different companies (say a processor can be of a different company and the user finds its originality with the help of a mark or a logo of the company on the computer system or the processor itself).

When any company buys products from the primary manufacturer and then resells them, showing its brand name or logo, then the company is referred to as the reseller of the product. A business is considered a value-added reseller when it purchases and resells items that were not its original products. For e.g. if anyone wants to buy products from another company so that it can use those products with its goods, the Original Equipment Manufacturer would then be the buyer who has purchased that product instead of the one who has manufactured those products.

Thus OEM allows buying products from the initial makers, and makes it possible for resellers to sell the products without having their own industrial unit, and also benefits the manufacturers as they do not have to produce goods or pay for operating a plant to sell their products.

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