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Definition of Original Equipment Manufacturer And The Benefits It Brings

What exactly is Original Equipment Manufacturer and how can people benefit from it?

There are some companies that do not make all the parts of whatever final product they are producing and it would be the original equipment manufacturer company that produces these parts for them. The term value-added reseller or VAR can be applied to this practice since the price of the final product can be increased due to some parts being made by other companies. Original equipment manufacturers create custom made parts for their clients and the effect of this kind of service would be an increase in selling price of the final product because nothing custom made ever comes cheap.

It is not uncommon for brake cylinders or exhaust systems of cars to be produced by an OEM. All the OEM would have to do is create the custom made parts and send them to the automobile company where these parts are then assembled into a car. Once the product has been completed, it will then be sent to the car company sellers to be sold to whoever wants a new car.

However, this definition of OEM is now somewhat obsolete today because the computer industry, an industry that is getting bigger and bigger at a faster rate than any other company, has made a new definition for these companies. A simple example here would be a person making someone else create an engine for the machine he is creating and then once he gets the engine, the would then rebrand it and put it inside the machine he has creted before selling it off as his own invention. A good example of this would be computer software being made by one company while other companies that sell computers would buy these software, use it in the computers they produce, and then sell them of under one brand name, their very own brand name. The OEM in this case would be the company tat does the incorporation and rebranding of the computer component they bought from another company.

Now let us dig deeper on how the OEM really works.

When you run a business, there will always be a need for support from other companies especially if you are producing goods or products that have various parts in them and you are not the expert manufacturer of all parts. The production of certain parts is an important aspect in the finish product and in making a sale, which makes EOMs very valuable to VARs. The EOMs has specific responsibilities on create parts but they have no say on how the final product will be made.

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