Why Vietnamese Product Factories Matter
When sourcing products for your business, especially from emerging manufacturing hubs like Vietnam, you will find many options. Vietnamese Product Factories can offer everything from basic commodities to new product development. Because of this variety, buyers need to understand common product types. Clear knowledge helps you choose the right sourcing model, manage costs, and build a strong and sustainable brand.
Below is a simple guide to these six key concepts.
1. Commodity Product
A commodity product is a basic good with almost no difference between suppliers. Competition happens mainly through price and volume, not brand.
Examples: Bolts, screws (standard fasteners), Standard bearings.
2. Off-the-Shelf Product
An off-the-shelf product is standardized, mass-produced, and available for purchase right away. It usually carries the manufacturer’s brand and needs no new development work.
Examples: Standard industrial water pumps, Standard industrial valves.
3. OEM Product (Original Equipment Manufacturer)
In an OEM setup, a factory produces items based on the customer’s own design and brand. The customer keeps control of branding and marketing. Meanwhile, the factory focuses on production.
Example: Automotive components (e.g., brake assemblies or brake discs based on customer drawings), Precision mechanical parts for medical devices.
4. ODM Product (Original Design Manufacturer)
An ODM both designs and manufactures a product for the customer. Buyers can take a ready-made design and apply their own branding (private label). This is a higher level of service than OEM because the manufacturer leads design and development.
Example: Industrial or electric fans with new designs, Mechanical hand tools (drills, grinders) pre-designed for private labels.
5. OBM Product (Original Brand Manufacturer)
An OBM designs, manufactures, and markets products under its own brand. It is not just contract manufacturing but full brand ownership.
Examples: Manual or electric pallet trucks (factory-branded).
6. Develop Product / New Product Development (NPD)
New Product Development (NPD) is the process of creating an entirely new product. It includes market research, design, prototyping, and mass production. This approach suits startups or companies that want to launch unique, proprietary products instead of commodity or off-the-shelf goods.
However, it can be a major challenge when sourcing from Vietnam. Buyers must have a clear strategy and commit enough investment to develop products outside of China, where the supply chain is more mature and integrated. Without this preparation, timelines, costs, and quality can become harder to control. Vietnamese Product Factories are improving, but buyers still need careful planning for success.
Key Takeaway
Understanding the differences between Commodity, Off-the-Shelf, OEM, ODM, OBM, and NPD helps businesses pick the right sourcing model, control costs, and build strong brands. For companies moving production from China to Vietnam, working closely with Vietnamese Product Factories and investing in clear strategies for product development is vital for long-term success.
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