What is a cosmetic OEM?
OEM is a brand producer who does not directly produce products for some reason, but uses its own "key core technologies" to design and develop new products, control sales and sales "channels", and has limited production capacity, even the production line, There are no factories, in order to increase production and sales, in order to reduce the risk of new production lines, and even to win market time, through contract ordering commissioned by other similar product manufacturers, set the product at a low price buyout and directly paste their own brand trademark. This kind of cooperation that entrusts others to produce is an OEM.
What is an OEM product?
The manufacturer that undertakes this processing task is called the OEM manufacturer, its production product is the OEM product. Unlike counterfeiting, it is a legal cooperation based on contract authorization. Unlike ODMs, ODMs bring technical requirements from Party B and entrust Party A to produce in accordance with the requirements put forward by Party B. Products are acquired by Party B. It is a legal cooperative relationship based on the contract authorization. OBM means that a company's products do not have its own brand, and specifically accept the OEM or ODM requirements of other companies to order the production of other companies.
The characteristics of an OEM are: Technology is outside, capital is outside, market is outside, and only production.
The main advantages of OEM operations:
1. It can objectively analyze the international and domestic market situation and accurately determine the product direction for this purpose.
2. The utilization rate and turnover rate of liquidity can be increased to facilitate the reduction of fixed costs to create higher economic benefits.
3. Comprehensively develop the technical and design strengths of all parties, reduce fixed technical personnel, and give full play to technical expertise.
4, can play to the expertise of all parties, collaborative production, reduce costs and increase efficiency.
OEM company manufacturers have the following conditions:
1. Scale production and manufacturing environment: At the same time, the output and quality assurance of the products required by many brands for production and processing.
2. Modern management mode: The enterprise structure is reasonable, operation is efficient, and internal consumption is reduced to a minimum.
3, rigorous quality control system: quality is the fundamental business development, processed products can naturally guarantee the stability of its quality.
4. There is a complete set of mature tracking system: the best products are not necessarily the latest products, but the products that are most suitable for the market demand, and reduce the technical risk factor and improve the market accuracy by keeping pace with the product developers. .
5. The speed of information feedback is fast: We must firmly seize the opportunities that are lost in the midst of fierce competition.
6, delivery capacity: including the mode of transport is fast, convenient and safe; product packaging safety.
7, to achieve the lowest cost of product development, spread the initial investment risk, easily have their own cosmetics brand.
8, the product research, development, manufacturing, packaging, filling and even packaging design all entrusted to the OEM company, they only take off-the-shelf product sales, use of the previous sales network based on the easier in the shortest possible time the cosmetics brand image success Enter the market.
9, do not have to bear the risk of equipment depreciation and self-built factories and production management, but also at any time according to market changes flexible orders on demand. This can promote the formation of new business advantages of the finished product business, cultivate and strengthen the company's internal expansion, improve operating capabilities and management, and thus move toward higher levels of capital operations. For a cosmetic company that wants to own its own brand, choosing a good OEM is very important.
OEM benefits: OEMs can reduce production costs and avoid unnecessary capital investment
OEM's obvious production cost advantage lies in the supplier's existing production capacity, cheap labor, extensive knowledge structure that can increase production efficiency and other professional details of processing. By reducing production costs in this way, companies can maintain competitive price advantages while increasing their economic profits in fierce competition. As an OEM demander, by entrusting an OEM supplier who already owns production equipment or is responsible for providing production equipment and their cheap labor to produce their own desired products, there is no need to invest in production of fixed assets and pay high labor costs. . It is also possible to concentrate on the research and development of new products while maintaining low-cost advantages through OEM processing of traditional products while maintaining its traditional advantages.