OEM – original equipment manufacturer

Concept illustration showing OEM as part of a supply chain.
OEM – Original Equipment Manufacturer reviewed by Web Webster

What is OEM?

OEM (pronounced as separate letters) is short for original equipment manufacturer, which is a somewhat misleading term used to describe a company that has a special relationship with computer and IT producers. OEMs are typically manufacturers who resell another company’s product under their own name and branding.

OEM is Similar to VAR

While an original equipment manufacturer is similar to a value-added reseller (VAR), the term refers specifically to the act of a company branding a product to its own name and offering its own warranty, support and licensing of the product. The term is really a misnomer because OEMs are not the original manufacturers. Instead, they customize the original product.

An Example of Original Equipment Manufacturers

When a computer technology producer manufacturers its product, for example, a computer graphics card, they will usually make two or more versions of the product. One version is distributed by the manufacturer direct to the consumer retail market, using its own branding and offering its own warranty and support.

Other versions of the manufactured product are distributed through the manufacturer’s OEM and authorized reseller distribution channels. Usually these products are the same quality as the retail versions, but warranties may be different, the manual and bundled software may be non-existent, and the cables and connectors required for installation might not be included. In some cases it may be large quantities of the product purchased in bulk by the OEM for mass-production of pre-built systems.

Recommended Reading: Learn more about different OEM Business Models in this Webopedia Quick Reference article.

Vangie Beal
Vangie Beal
Vangie Beal is a freelance business and technology writer covering Internet technologies and online business since the late '90s.
Get the Free Newsletter
Subscribe to Daily Tech Insider for top news, trends & analysis
This email address is invalid.
Get the Free Newsletter
Subscribe to Daily Tech Insider for top news, trends & analysis
This email address is invalid.

Related Articles

Complete List of Cybersecurity Acronyms

Cybersecurity news and best practices are full of acronyms and abbreviations. Without understanding what each one means, it's difficult to comprehend the significance of...

Human Resources Management System

A Human Resources Management System (HRMS) is a software application that supports many functions of a company's Human Resources department, including benefits administration, payroll,...

How To Defend Yourself Against Identity Theft

Almost every worldwide government agency responsible for identity theft issues will tell you the same thing: The first step to fighting identity theft is...

Infographic

An infographic is a visual representation of information or data. It combines the words information and graphic and includes a collection of imagery, charts,...

ScalaHosting

ScalaHosting is a leading managed hosting provider that offers secure, scalable, and affordable...

HRIS

Human resources information system (HRIS) solutions help businesses manage multiple facets of their...

Best Managed Service Providers...

In today's business world, managed services are more critical than ever. They can...