OEM Manufacturing in China – Everything You Need to Know
OEM Manufacturing – it’s the reason why some of your favorite products are made in China, and the reason why you might be able to find a more affordable version of that product at your local store. What exactly does OEM mean? Simply put, OEM stands for original equipment manufacturing and it’s often used in reference to products like electronics, automobiles, and various types of machinery – basically anything that would need to be customized or configured according to customer needs before being sold.
What is OEM Manufacturing and its current state in China
OEM manufacturing is a type of manufacturing activity where a company manufactures and sells products or parts of a product for another company, putting the products under the company’s own branding. The manufacturer will manufacture the product according to specifications and then ship it to the buyer. Generally, the buyer will only provide money, expertise and trade secrets. The manufacturer will handle everything from production and shipping logistics to distribution.
It has become a very common type of manufacturing in China now. It accounts for more than 50% of all industrial output in China just last year.
There are mainly three types of OEM manufacturers: Original equipment manufacturers (OEMs) who produce goods based on other companies’ specifications; System integrators who design and assemble the systems but don’t fabricate any components themselves; and Contract manufacturers who buy components made by other firms that have been designed by system integrators.
For western businesses, an OEM manufacturer is a very popular option. It can provide products of good quality at a lower price than they could do it themselves. It offers them a chance to outsource complicated production tasks and focus on what they do best.
The Pros and Cons of OEM Manufacturing in China
The pros of OEM manufacturing in China are that it is less expensive than the United States, Europe, Japan and South Korea. Workers there are skilled because they are more educated with most having graduated with high school diploma, but they are paid less than their western counterparts.
Production times tend to be faster because there is a larger supply chain of suppliers and factories. Most companies send their product engineers over early on so they can set up production lines and make sure everything is operating smoothly before products start arriving from overseas, which can mean better quality control too. If you’re looking for lower costs and want something fast, then this could be the way to go.
However, you should also know about some disadvantages. For example, the deteriorating relationship between the US and China has made their bilateral trade more difficult than ever. Punitive tariffs between the two nations have made it more expensive for an American company to produce its goods there. In response, many Chinese manufacturers have started up factories in Southeast Asia as a major workaround.
How to Find a Reputable OEM Manufacturer in China
In order to find a reliable manufacturer, you will want to do as much research as possible. There are many manufacturers in China, so it is important that you know what to look for when choosing one. Here are some things you should consider:
– Is the factory certified? A factory with ISO certification is usually a good place to start.
– How long has the company been around? The longer a company has been around, the better chance they are dependable and trustworthy.
– What products do they specialize in manufacturing? Some factories specialize in just a few products while others can manufacture anything. Ask yourself if your product would be made by someone who specializes in it or not. It can be helpful to visit their website and read about their capabilities before making your decision on who to use.
– Check their website or other social media presence. Does it look professional? Does it appear active? These questions can help you determine how reputable the company is.
– Are there reviews online for them? Read them carefully and make sure that they’re from legitimate sources. Any reviews from sites like Alibaba are probably fake because these websites get paid by sellers to post reviews on their behalf. Reviews from real buyers often provide very useful information about a supplier’s reliability, such as whether or not they deliver quality products quickly, answer emails promptly, return phone calls, etcetera.
– Do they have an English-speaking customer service staff? If not, you might need to find someone who does as quite likely they don’t much experience in dealing with western customers. Nowadays most manufacturers certified to export have English-speaking staff members in this regard.
Avoiding Scams When Manufacturing in China
There are many scams out there that try and lure companies into thinking they’re getting a great deal on OEM manufacturing in China. If you’re going to do business with someone in the country, make sure you’ve done your research about their company history, including what kind of certifications they have for their products.
You should also be on the lookout for any red flags when it comes to how much the company wants for their services or if they are insisting that you pay upfront before anything is agreed upon. Remember, if it sounds too good to be true, then it probably is. It’s best to do as much due diligence as possible before agreeing to work with a new supplier. Even after you find one, stay vigilant by checking up on them often so that you don’t end up being scammed.
The last thing you want is problems with quality or time management along with possible legal issues. That’s why you should keep in touch with them on a regular basis so there aren’t any surprises for either party involved. It’s always important for manufacturers and clients to work together closely so they can best understand one another and work together to meet each other’s needs.
Shield Works is an ISO-certified and British-owned and managed OEM manufacturer that check all the boxes aforementioned with 17 years of experience in China. Contact us to see how we can help!