What is an OEM?
OEM stands for Original Equipment Manufacturer. These are factories that make parts, components, systems, or pieces of other company’s products. One can think of OEMs as a third-party material provider. For example, Dell or Acer might ask an OEM to provide parts of their laptops for them such as chips, processors, frames, or screens.
Because of such arrangement, goods coming from OEM are relatively cheaper compared to those that are created by the company itself. However, one must bear in mind that OEM parts do not come in fancy packaging or containers. Instead, they are packed in regular boxes or plastics that have no brand name in them.
Why find a low-cost one?
Finding a low-cost OEM factory has lots of advantages. Here some of them:
Even if OEM products are not made by the actual company, they are still quality-assured to perform well. Thus, there is no real difference between an original component and a well-made OEM part since both can be used interchangeably with each other.
When negotiating with a direct company, the options you have are very limited since they have built-in specifications for their product. However, conversing with an OEM factory gives you the benefit of having customized goods that will greatly fit your needs. As long as you send them the part that you want, they will surely give a quote on the total price that is needed to manufacture that component.
Part by part orders
Unlike direct orders from a company that may cause you to purchase parts in bundles, OEM has the advantage of getting each part separately. The focus here is more on the sections of a product rather than the whole package, thus, it is far more suited for modular businesses.
Better Reselling Profits
A low-cost OEM factory will garner benefits in terms of profit since reselling will yield greater gains. Compared to buying original components products, OEM products cost a fraction, so you can get by with higher mark-ups upon selling the items.
Where to find one?
Below is a guide on how to find a good OEM factory in China.
Looking at the right places
The search for a good manufacturer can start at the comfort of your home. One of the best places to find them is e-commerce shops such as Alibaba and Global Sources. These sites have a heavy influx of factories that sell components or entire items at very cheap prices.
A good way to start is to enter the product you are looking for in the search bar. Then, clicking on some items should direct you to the provider’s information. It should include the factory name, location, credentials, and even reviews or ratings. You can then ask the company if they are an OEM provider by contacting them.
A sourcing agent is a team or company that knows where to get the best manufacturers in China. If you have the extra budget to employ them, then it will be very beneficial. They function in two ways. The first is they can provide a list of trustworthy factories that you can partner with. Also, they can verify any company that you are interested in to know the risks involved in communicating with them. Overall, sourcing agents are reliable ways to help you in your search, but it is integral for you to make contact with a reliable one.
Ask for further information
One thing that you should not hold back when searching for an OEM factory is asking questions. Ask everything that you need to know and do not hesitate, as this might spell the difference between getting a good supplier or not. This is an important part of factory negotiations as it helps you gauge whether the group you are talking to is trustworthy.
Great things to ask are track record as well as MOQ or Minimum Order Requirements. MOQ helps in informing potential buyers about the capabilities of a factory, as well as how versatile or customizable they are. MOQ also provides a general overview of how they connect with partners, as is it is one of the first things that you need to agree on.
Get a test product
A test product helps search for an OEM factory as it helps you learn about the quality of the product that they are offering. Usually, manufacturers who offer product tests are confident of what they can deliver, and this is a very positive sign. This will also aid in identifying major differences between direct company goods and OEM goods.
You must take note that you might need to handle some fees for the test package such as shipping and customs fees. Fret not, since it is a small price to pay for ensuring high-quality items that you can resell or use to your liking.
Talk to the higher-up
When you talk with a sales representative especially on e-commerce sites, you are usually greeted by a customer service representative. These people will inform you about the basics of the product and the order process. While they might be enough for casual orders, it is better to talk to higher-ups when proceeding to partnerships and long-term deals.
The reason behind this is you get more discounts or offers when dealing with higher-ups since they know the trade better. Also, it builds a sense of seriousness since the company will think that you are interested in a long-lasting partnership.
Relationships are very important in most Asian companies, and this value stays true for Chinese factories. They always favor partners that will be with them for a long time compared to those which are temporary only. This is why building strong bonds with your chosen OEM Chinese factory is essential since It ensures that you and your provider will be on the same page.
When you build relationships, you also get the bonus of having connections with other companies that are related to your chosen company. This results in an interweaving of potential contacts that can be of benefit to you and your business someday.
Check the factory chain
The chain of command in a company is essential in keeping it efficient and productive. Thus, it is good for a potential partner to check this process from the gathering of materials and even to assembly and distribution. Any problems that might be discovered in this part should be asked towards the Chinese OEM factory for clarification purposes.
It is also good to inquire about the power dynamic of the factory such as the CEOs, owners, and stakeholders to see whether they are reliable. It can also give you a glimpse of how the organization performs compared to competitors.
Ask for shipping details
This is an often-neglected part when searching for an OEM factory. Shipping details are essential for potential partners since the quality of the goods can turn to nothing if it is paired with an irresponsible shipment provider. You should always ask for this detail when looking for a partner.
What to watch out for?
Business owners should watch out for ghost factories that are scams and do not provide products. These are usually facades built to trick unsuspecting buyers to fall prey to their modus. Also, there is a great need to be wary of factories that claim that they are OEM providers but do not have the credibility to back their statements. These are organizations that try to victimize those that do not have any experience in dealing with OEM sources.
Thus, it is better to employ a third-party team that is knowledgeable in the Chinese trade, commerce, and manufacturing industry. However, the team or service provider that you will choose must have tons of experience in dealing with Chinese companies, as well as a good track record in the market.
What we do at Verifyfull
Verifyfull is a reliable provider of Chinese Company and OEM Factories information, data, and verification that partners with offshore and foreign companies to help them identify trustworthy, reliable, and profitable good providers.
Our company provides an amazing service that is built on transparency, and we make sure that the information we give you regarding your chosen Chinese OEM Factory is unfiltered, factual, and backed by credible data. You can also see us as your observer in the Chinese marketing industry, as we know the ins and outs of the trade. As a service provider, we give the highest quality of integrity, passion, and craftsmanship in our transactions.
When you contact us, we will surely give you great help in your search for the perfect OEM Factory. Do not hesitate to reach out, and we will surely satisfy your needs.
There is no need to boggle your mind regarding getting correct information on a Chinese OEM Factory. Verifyfull will do this job for you in a very strategic, affordable, and efficient manner.