PRIVATE LABEL, WHITE LABEL, ODM AND OEM
The terms private label, white label, ODM, and OEM are often confused. This very understandable since the difference is quite subtle. In the business landscape, these terms refer to different business models for manufacturing and branding products, with the main difference being the level of customization and control. In today’s world of manufacturing there are many words used to describe the process by which one company produces a product or service that is then marketed and sold under the name of another brand. You’d be surprised by the number of your favorite brands that are actually manufactured by a totally different company.
What do the terms mean?
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White Label: This is when an apparel manufacturer creates non-branded products that retailers can purchase and sell under their own brand. The products are generic and the same item might be sold by multiple retailers under different brands.
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ODM (Original Design Manufacturer): An ODM company designs and manufactures a product which is then sold by the retailer under their own brand. This allows retailers to sell products without investing in design and manufacturing. In essence, ODM provides a level of design and customization that white label does not, as white label products are usually generic and not brand-specific. ODM products can offer unique features that are associated with the retailer’s brand, while white label products are more about providing a range of standard products (often from a pre-designed catalog) that can be branded and sold by the retailer.
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Private Label: Similar to white labeling and ODM, but the products may be customized to a certain degree. The fashion retailer still sells these under their own brand, but they have more control over aspects like design, materials, sizing, and production of the products compared to ODM. Private labeling allows for a higher degree of customization and exclusivity for the retailer’s brand, as they can create unique products that reflect their specific vision and brand identity.
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OEM (Original Equipment Manufacturer): In this model, a retailer designs a product and then contracts a manufacturer to create it. The retailer owns the design and the brand, but the manufacturer produces the product.
How do they compare?
Each model offers different levels of control over the product and brand, and the choice between them depends on your business goals, resources, design experience, and the degree of customization you want for your products. When it comes to products, each manufacturing and branding approach has its own set of advantages and disadvantages, as well as suitability for different types of retailers or entrepreneurs.