"Original Equipment Manufacturer" is the full form of OEM. Traditionally, an OEM is a corporation whose goods are used as components in another company's products and then sells the finished product to consumers. An OEM is a company that resells the goods or parts of another company's product to its own consumers by keeping the goods under its own brand name. OEMs are widely active in the automotive and computer sectors.
OEM example:
A manufacturing company that makes tires for vehicles. Consider that an individual buys a Honda city car, the Apollo tires that come with the car and the Apollo tires here are designated as OEM.
Foxconn (Taiwanese contract electronics manufacturing company) which manufactures various 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 20th century Dutch expression "onder eigen merk", which means "under own brand" in English.
Relationship between OEM and VAR
VARs (Value Added Resellers) offer goods from OEMs, but then integrate additional features. Both have a beneficial relationship, as VARs support OEMs in the market for their goods, and OEMs adopt their VAR product lines, allowing them to sell them with additional enhancements that improve the product's services.
Advantages of OEM parts
- Quality guaranteed
- Comes on warranties
- Simple to choose which part you required
- Disadvantages of OEM parts
- Mostly sold at discounts
- High Costs
- Hardly any variety in parts.