This blog is to provide useful information, to existing and prospective clients; on all aspects of cosmetic contract manufacturing.
How does OEM relate to the skin care manufacturing industry
HOW DOES OEM RELATE TO THE SKIN CARE MANUFACTURING INDUSTRY
We have been receiving many inquiries lately as to whether we are an OEM (Original Equipment Manufacturer) company. After researching what the term means we found many references to the car and IT industries but no direct definition for other industries.
In essence an OEM is a term used to infer that a company manufactures a generic (no label) product for another company to use with their label and to market in their designated field.
Ortron has been an OEM company since its inception around the 1980’s. The term used then was contract manufacturing whereby Ortron would prepare a product, fill in the clients preferred packaging and labelled with the clients markings. With the advent of the common use of acronyms, this description can then be easily shortened to an OEM.
One of the biggest benefits of this type of a relationship is that each company can concentrate on what it does best.
We at Ortron are able to manufacture and release a finished product and this is our strength. Our clients can then concentrate on the marketing and selling aspect of the products. This is the strength of our clients as they understand what their customers want from label design and packaging needs.
Our clients are also able to set up shops and franchises to help distribute their unique products and equipment.
Therefore OEMs rely on their ability to drive down the cost of production through economies of scale. Also, using an OEM allows the purchasing company to obtain needed components or products necessary for their market without having to own and operate a factory.