What is the full form of OEM?
The full form of OEM is Original Equipment Manufacturer. An OEM is traditionally a corporation whose goods are used as components in another company’s products and then sells the completed product to consumers. OEM is a company reselling goods or parts of another company’s product to its own consumers by keeping the goods by its own brand. OEMs are widely active in the automobile and computer sectors.
OEM example:
- A manufacturing company that manufactures the Tyres of the vehicle. Let us consider an individual is buying a Honda city car, Apollo Tyres that comes with the car and the tyres Apollo is labelled as an OEM here.
- A Foxconn (Taiwanese electronics contract production company) which manufactures a variety of equipment and parts for companies like Dell, Apple Inc, Nintendo, Xiaomi, Google, Huawei, etc.
History
The origin of the word OEM comes from the late 1900s from the Dutch expression, ‘onder eigen merk’ which means ‘under own brand’ in English.
The relationship between the OEM and VAR
VAR (Value Added Resellers) offers goods from an OEM but then integrates other additional features. The two have a beneficial relationship, as VARs support OEMs market their goods, and OEMs accept their product lines to VARs, enabling them to sell them with more improvements that will improve product service.
Advantages of OEM parts
- Quality guaranteed
- Comes on warranties
- Simple to choose which part you required
Disadvantages of OEM parts
- High Costs
- Mostly sold at discounts
- Hardly any variety in parts.
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