Tips for Small Businesses to Find the Best China OEM Manufacturer


OEMDOM贴牌加工电商阿里巴巴.jpgUsually, you must choose your OEM (Original Equipment Manufacturer) who manufactures very sophisticated and high-precision products. Such products can especially be useful for industries that mainly rely on commercial objects, heavy vehicles, and similar equipment.

These days most companies prefer to have their products made in China while working with any OEM company.  Before that let us try to understand the concept of OEM in little more detail before we try to find manufacturer in China.

What is an OEM?

Over the last few decades, the concept of OEM has got little transformation. Initially, this term was used to signify a company that has developed a certain product.

After that, this product was purchased by some other company and then branded as their own product before they were sold to a user. Now this definition has further expanded to describe companies that will buy products from some other firm, rebrand them, and then sell to other users.

You will mostly find OEMs among the 2 types of industries which are - auto and computer industries. Often an OEM can also be a client of a certain retail organization that directly sells products to its customers.

Take an example of a Hyundai vehicle, which might not have every part made by them. Many of its parts can be sourced from certain OEM suppliers.

In such a system, the seller who provides the finished product is called the Value-Added Reseller. This company will add value to the original product by introducing certain new features and services to it.

The Value-Added Reseller interacts closely with different OEMs that will customize designs on a product as per the requirements given by the company which is a value-added reseller company.

An OEM would initially focus on B2B sales. Products would be promoted by the Value-Added Resellers for sale to the general public. While an Original Equipment Manufacturer creates unique products, an aftermarket manufacturer creates goods that look similar to and perform similarly to those created by the OEM.

Although they are more affordable, aftermarket products typically lack the originality and functionality of OEM products.

Why do companies go for an OEM manufacturer?

Many companies may not have the necessary resources or expertise to manufacture high-volume or highly specialized products. So, better to outsource manufacturing and reduce costs and also avoid the complexities of maintaining production in-house.

An OEM will make the necessary components for any of your products. All that you have to provide is the design specifications for the item and the OEM will produce that for you. You will get the parts and then assemble them into your finished product by using your trademark.

As the OEM company has got the experience to make those products and is also aware of how are you going to use them. Also, they have a well-set production line with an established supply chain. So, you can take benefits of that for your own product instead of developing your own.


Ever since many companies has started preferring a China OEM manufacturer so the question that many companies ask is whether to choose OEM in the country or go overseas.

A critical decision that you need to take is where your OEM manufacturer should be located. The best solution, however, for your product manufacturing will depend on your business priorities.

Pros and cons of domestic OEM manufacturing


  • Local OEM manufacturers can be easily accessed and monitored

  • You can also have more direct control over both production and quality

  • You can visit more often

  • Fewer tariffs and international freight cost

  • You can also order in small batches if the market demand is low


  • Labour cost in Europe or the USA is very high

  • You may not find domestic OEM companies for all kinds of products at times

Pros and cons of China OEM manufacturing


  • If you select any China OEM manufacturer, then you get a price advantage

  • Several companies are available for the same products hence more options are available


  • China to USA import duty may change due to government policy

  • Shipment delays at times

  • If you select a Chinese company then many communication problems may arise

  • No control over the quality

A few questions that you can ask yourself before you consider the option to import OEM products from overseas:

  • What are my product requirements and standards?

  • What is my budget limit?

  • What do I need to do for conducting due diligence?

  • Whether should I go for a single supplier that serves all purposes or go for multiple suppliers?

  • How can I ensure that the product that I get will work perfectly?

If you are planning to consider China as a possible source for your OEM manufacturer, then you must consider hiring a certain reliable sourcing agent in China, who can be very useful to you.

A few tips to find any OEM manufacturer in China

1. Whenever you pay a visit to the factory of your prospective China OEM manufacturer, always start with their warehouse storing raw materials.

If you find the warehouse completely empty then it is a sign that the manufacturer does not have enough business and looking for one.

However, if you notice that the warehouse is full then check which materials are present. Whether they are the parts of the product that the manufacturer claims to produce. Whether those parts are local or imported? Are they from a certain reputed company?  

2. Next, visit the shipping warehouse. If you find an empty warehouse then obviously the company has no business now. However, if the warehouse is full then check whether they are being exported or meant for any local company

Also, check how they pack and load the products. You can know a lot by looking at how they are loading their products into containers.

3. Next, you must visit their finance office and just sit for an hour and simply observe what is going on. If no activity is found that means the company is dead.

If they are dealing mostly with cash for the transaction then this company is doing business only locally and has no clients in overseas countries.

4. Next visit the sales department. Again, observe if the people are too busy or not. Whether the sales staff is simply drinking tea or dealing with purchase orders and invoices.

What is their language of conversation mostly? If no one is speaking any English that shows that the company never dealt with any overseas customers.

Then note the phone calls that are received by the sales department. If the majority of calls are about a customer complaint, late delivery, short delivery, or faulty product then perhaps you know which type of company you are dealing with.

5. Next, you must get ready for the factory visit. So, instead of going to their production shop floor try to start with their quality control department.

If there is no separate quality control department exists then you can guess the quality of the company. In the quality control department, you must spend some time and watch what activities going on.

Are people frequently visiting the shop floor to check what is happening there? Do they just remove the defective item and no further action is taken thereafter? Or are they doing absolutely nothing? What finally happens to the defective piece? Whether it is destroyed or just put aside, presumably to sell in the local market.

A few manufacturers may take you to their Quality control laboratory. The same observation you need to make here too. Check if the lab has any activities or just a showpiece for the visitors like you. We visited one company manufacturing certain food products. We found a few beautiful pieces of equipment and it was so clean and beautiful that shows perhaps nobody has ever used them. Obviously, it is only used as a showpiece.

6. Finally, visit the production floor of the factory. By now you must have a pretty good idea about what is happening in the factory.

The floor visit will just be to confirm whether any quality check equipment is ever used or any QC procedure is followed.


By using this kind of approach as we mentioned above, you can always separate any bad factory from a good one very quickly. Usually, you will rarely find any factory which is really very good.

However, if any of the factories appear to be good ones then you should move to a discussion with the company about whether you can do any business with them.

Any good China OEM manufacturer will usually be busy. If you are lucky enough to find one then have an honest discussion to tell them what you want to make and what OEM item you need the quantity, and your time frame.

However, if you have rejected a factory, then depart from there as soon as possible as they may ask you for lunch or dinner with the managers of the factory.

If the good factories are inviting you for lunch or dinner, then take your time to decide. Usually, you will rarely find a good factory and if you found one then you must work immediately to build a business relationship. Your Chinese sourcing agent can also offer valuable input to you.

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