Posted on September 28, 2022

What are OEM Products in the World of Manufacturing?

EDCO manufacturing floor

Photo Credit: Kelly Heck Photography

When you need integrated support strategies for third-party systems and components, an original equipment manufacturer (OEM) is the partner you’re looking for. OEMs create systems for a company’s end product. These types of manufacturers can save you time and money in creating your product. EDCO Fabrication wants to ensure you understand what OEM products are and the ins and outs of their role in the fabrication and manufacturing process. 

What is an Original Equipment Manufacturer?

This is a company that produces components or parts––sometimes known as OEM equipment––for other businesses to use. These businesses are called value-added resellers or retailers (VARs). The two collaborate together to create parts such as computers, phones, or other items. VARs then assemble and stamp this product with their brand, assemble the components, then add it to their catalog of products for consumer sales. 

Why OEMs are Critical in Manufacturing

Collaborating with an OEM can save companies lots of money. Rather than building facilities to create these pieces for their products or handle production themselves, they integrate these items into their production system. OEMs are a trusted source to streamline efficiencies. Working with them can also mean a better return on investment for VARs and the customer, who will usually not incur more costs by leaving it to highly-trained fabricators.

It can be complicated to juggle all that goes into crafting items from start to finish. That’s why working with an Original equipment manufacturer like EDCO Fabrication makes sense. We understand all the complexities that go into getting the outcome right, each time, for all moving parts of production. 

How Does it Work?

Here is how the process plays out step-by-step:

  • The VAR chooses an OEM to work with
  • The OEM creates the product to spec
  • The OEM then sells the product to the VAR
  • The VAR assembles pieces together to create their item
  • The VAR adds its company name to the product
  • The product is available for consumers in the retail space

Are Aftermarket and OEM Products Different?

Although they are similar because both entities make parts assembled into a final product, they do have differences. Here’s how: 

Aftermarket Products – Typically not included in the original supply chain or manufacturing of VAR products, these are produced in a more generic fashion for a much lower price. Aftermarket products are typically utilized for replacement parts for a broken component or part that is no longer under warranty. 

OEM Products – Ordered and designed to specification, these are fabricated to be sold directly to VARs, then to consumers. It is uncommon for consumers to purchase components directly from OEMs. It is more common for consumers to hit the aftermarket to find replacement parts to repair worn parts. 

Clients from around the globe trust EDCO Fabrication for their equipment manufacturing needs. Located in Frederick, Maryland, EDCO has more than 60 years of experience in product design and manufacturing. We can help your company with complete assembly or creating components. Reach out and let us know how we can use our talents to craft your OEM products.