OEM packaging is an abbreviation it is an acronym for “Original Equipment Manufacturing” packaging, which does not really clear up exactly what an OEM packaging is.
OEM packaging definition in its most basic form does not really shed light on the OEM packaging meaning. It is packaging that is made specifically for an OEM. Still not clear?
We need to delve a little deeper into OEM to get a bigger picture of what the packaging is.
To get down to the nitty gritty there are a few things that must be discussed to truly understand the value of what OEM packaging is.
This guide will help to clear up the meaning of several definitions to help you better understand the value that an OEM box can bring to your products. We will address the following:
- What is an OEM product?
- What is an OEM company?
- What is OEM service
- OEM service definition
- OEM Packaging and other names for it
What is an OEM product?
Outsourcing before outsourcing was a thing is exactly what OEM is! OEM manufacturing has been around for a long time, we can use Ford Motor Products again!
Back when Ford was a fledgling company that no one was sure was going to succeed, they used OEM manufacturers for their tires, batteries, and other parts.
It was outsourcing long before outsourcing became a business model.
What is an OEM Product? This can get a little confusing. OEM or original equipment manufacturer products are not necessarily made by the brand of the finished product as a matter of fact it may not even be designed by the brand.
It is equipment that is made by a manufacturer that partners with the final brand. In other words, a manufacturer that makes parts specifically for Ford Motor Company will produce OEM products for Ford, but they are not owned by Ford Motor Company.
It is a contract between two companies, where one company is making components, parts or equipment for another company that will brand it as their own. Historically OEM was a lot more of an exclusive relationship than it is today.
An OEM product may or may not be an “exclusive” product to one brand, but it may be associated with that brand so much that it is thought to be owned by that brand. Today an OEM provider can work with several brands, if there component is sought after.
Today OEM products and parts are sold directly to the consumer, while 25 years ago that was largely unheard of. Of course, OEM parts, product and equipment are usually not found in retail spaces, but they can be found plentifully online and in certain brick and mortar shops and stores.
The confusion really starts when it comes to retail products VS OEM products. In most cases, the price difference between these two categories can be very different.
The catch is that if you buy a product that is packaged under the brands banner, it is going to be more expensive than the OEM product in the plain box, but there is no difference in the function.
Again, we will use Ford Motor Company as an example. And OEM product that is produced for Ford is produced to very specific standards and will come with a Ford Motor Company guarantee that it will fit perfectly in their vehicles and will be warrantied.
An OEM part packaged under the Ford banner may come from the original OEM. Now, let’s say you bought an identical product via and OEM manufacturer, but it has not been packaged under the Ford banner, it still fits perfectly, it looks identical and it even functions identically but because it was not sold under Ford’s brand if something goes wrong, it is not covered under the Ford Motor Company warranty.
OEM products are designed specifically for a specific brand. In other words, they are “genuine products or parts” for that brand and can often be purchased through different avenues but if they are not in that “branded” packaging coming from the brand itself there can be some issues with warranties.
What is an OEM Company?
An OEM company is a business that designs and manufactures specific equipment, components and parts for a specific brand of products.
Usually an OEM company’s products are marketed by another brand as their own. In most cases the specific designs are supplied to the OEM manufacturer and they are contracted to manufacture the parts, in other cases the OEM has their own design team that works with the brand to develop the parts, equipment or component.
OEM companies do not get the credit for the product, equipment or parts that they manufacture for another brand. Nor do they receive the credit for any input that they have had in the design of the part, component, product or equipment. Think of them as the silent partner.
Packaging plays a vital role in this type of manufacturing. Packaging is often used to disguise the original manufacturer’s information. Instead of products being placed into branded packaging they are placed in plain cardboard packaging that is built to protect but not to create an identity for the OEM brand.
What is OEM Service?
OEM service or original equipment manufacture service are services that are offered by a manufacturer to another brand to design or manufacture parts, equipment or products for that brand. OEM service definition simply refers to the original manufacturer of the parts, equipment or products.
OEM services can be used for a wide range of industries including:
- Automotive manufacturing
- Hardware manufacturing
- Software manufacturing
- Electronics manufacturing
- And more
There are quite a few benefits to this type of service including:
- Keeping manufacturing costs down
- Producing unique parts and equipment
- Improving quality of the brand
- Getting the expertise that is needed
- Keeping final assembly times shorter
Most of the well-known large brands use OEM solutions in their assembly of their final products because it is a cost-effective solution that helps to keep productivity up.
Many times, an OEM is used because they specialize in that part or component and it is simply easier for the brand to tap into the expertise then it is for them to hire and train others to do the same thing.
In most cases it is far cheaper to turn to a manufacturer that already has the capabilities in place than it is to start up a new operation to do the same thing.
A lot of people ask if OEM is the same as the original and the answer is a mixed bag. Some parts are labeled OEM, but that does not mean that they are the OEM for that specific brand. Sometimes the term is thrown around loosely.
In many cases the answer is yes, in other cases the answer is no, but in all cases if a part or equipment is listed as OEM it means that it is using the same specifications as the original.
Here is where it can get very confusing. In some cases, an OEM will use another OEM who has used another OEM to create a component that finally makes it to the distributing brand. Each OEM manufacturer is much like a cog in a wheel, they play a vital role in making the finished product come together.
What is OEM Packaging?
OEM packaging is packaging that is custom made packaging. It is often called industrial packaging. Custom packaging for an OEM product can include:
- Custom sizes
- Custom shapes
- Custom protection for the product
This type of packaging is a must for any manufacturer that provides OEM services. As a contract manufacturer it is vital that parts, equipment and components arrive in pristine condition. Damaged products can slow down the entire assembly of the final product which of course does not make the client very happy.
With the right packaging options components can be protected and can be shipped for less. Bulky unnecessary packaging is costly and a waste.
The right source will have options that are built specifically for the manufacturers needs that help to keep costs down without compromising protection for the products.
What is an OEM Tray?
Since we have moved on to packaging, it is important that you understand what an OEM tray is. You will often hear the term “tray processors” when people are talking about computer hardware. What it refers to is the “tray” that the processor comes in.
As is the case with most all OEM products the packaging is plain. Processors and other hardware are often sent to the final manufacturer in plain non-distinct trays that are not marked with branding.
A tray processor can often be less expensive than its retail counterpart, but it delivers the same function.
Packaging sources can create trays that protect the processors during shipping and storage to ensure that they arrive at the final manufacturer in top condition.
Why Packaging Plays a Critical Role in OEM?
If we revisit the conversation about why OEM is often cheaper than retail if you are getting the same quality, part of the discussion must focus on packaging.
When you purchase an OEM part you will notice that the packaging is void of any identifiable marks. The package is typically plain. Of course, plain packaging is less expensive than packaging with logos which makes the costs lower to the consumer but that is not the only role packaging plays in OEM products.
An original equipment manufacturer is seriously limited in what they can do for their own branding purposes because they are under contract to other brands. Lets go back to Ford Motor Company for a minute. Ford Motor Company brands their car parts under their own banner, but the fact is they outsource a lot of their manufacturing to other companies.
Let’s say for arguments sake that ABC Brake Pads make all their brake pads for all the Mustangs. ABC Brake Pads can be excellent brake pads that can stand up to a lot of wear and tear, but Ford Motor Company has put in the contract that ABC Brake Pads can sell their brake pads as OEM parts but they cannot sell them as ABC Brake Pads or advertise them, or sell them in branded boxes, or market them beyond a certain scope.
To get around their contractual obligations, ABC Brake Pads, sell their OEM parts through auto parts stores, but they are simply sold in plain cardboard boxes and listed as an OEM part.
Manufacturers need packaging that is indiscreet but protective for their products. How a part, product or piece of equipment is shipped plays a vital role in the manufacturer honoring their contractual obligations and keeping their own costs down.
The Right Packaging Benefits the Manufacturer
OEM’s greatly depend on meeting the needs of the brand they are contracted to, that means they must be able to provide a service that is delivered at less cost than a brand can do it for themselves. They are under a lot of pressure to keep costs down while delivering quality equipment and parts.
With the right packaging, products are protected, and contractual obligations are easily met, and it is all done for the right price point. The goal is to have a packaging partner on board that can deliver the packaging that the manufacturer needs at a competitive price without sacrificing quality.
It sounds like a tall order but there are packaging companies out there that specialize in industrial packaging that can easily be customized to fit the need of any manufacturer.
OEM is a Part of Life
If you are an OEM provider you already know how critical what you do is to everyday life, if you are not, reading this information should open your eyes to how vital the function an OEM plays in every product that you use.
From cars, to furniture, to electronics to home goods, most every product has made a stop at an OEM factory. It is the way companies have been doing business for years and likely is the way things will continue to be done across a wide range of industries.