“I plan on just sourcing something off-the-shelf to start with.”
As an industrial design agency that focuses on designing customisation, we have our opinion on this. But it might not be what you think.
I used to have a job ‘designing’ products for John Lewis. We did actually design a few things; a beautiful kettle and toaster, a few speakers. But mainly my job was to take products we’d received from sourcing agents in China and CAD them in Solidworks, change the colours and finishes to match the JL range and render them out for approval of the directors. Almost a decade later some of those products are still selling with great reviews. Working in this way, household brands can get new products into their range quickly and save hundreds of thousands in tooling and product development. So why not do this?
What is the difference between ODM and OEM?
Firstly let’s take a step back and look at the two main ways manufacturers typically work. Two terms are often mixed up: ODM and OEM.
An ODM (Original Design Manufacturer) is a manufacturer that designs and makes products to their own design that are then sold under other brand names. This happens in two ways:
- A brand simply chooses something ‘off-the-shelf’, perhaps changes the colours, and puts its brand on it (sometimes called White Labelling). They don’t own any IP and are unlikely to have any exclusivity on the product, meaning another company could do the exact same thing.
- A brand may custom design some aspect of the product; add a feature, change the outer shell, or adjust an interface. In this instance, especially if they have paid for tooling, the brand will own the design IP associated with the customised aesthetic or functionality. The resulting product would therefore be exclusive to them and help differentiate them in the market (sometimes called Private Labelling).
An OEM (Original Equipment Manufacturer) is a manufacturer that can make a product to your exact design and specification. These are used by brands both big and small; the most widely used example is China smartphone manufacturer Foxconn which is the main OEM for Apple.
What you need for White Labelling/Private Labelling to work…
A relationship with a great factory
You are looking for two main things when it comes to a factory; experience and communication. Whilst you might be able, to some extent, to change the aesthetics of a product to match your brand, you won’t be able to improve the overall quality of the build, function and components.
So put the product through its paces, make sure the user experience at least is perfect. Secondly, ensure you can communicate effectively, and not just with the sales team. Being able to speak directly with the design and engineering team will be vital if you plan to make further improvements or modifications to the design in the future.
Water-tight contracts
Once you’ve found a factory, ensure you seek legal help in drawing up the contracts. You will need some guarantees that they aren’t going to turn around to you in a year's time and tell you they are no longer making that product any more, or that they can’t source the components.
A strong brand
If you aren’t willing to pay for custom design or tooling then you only have your brand and market positioning to set you apart. Bear in mind that if you can white-label it, so can others. That’s why there are so many competing sellers on Amazon selling the same product and you can very easily end up in a price battle with your competitors.
What custom design gives you…
Creative control
When you craft a product that is unique, you are in complete control of the narrative and the experience that your customers get. You also lay the groundwork for future products without having to start the sourcing process all over again and risk having multiple suppliers in your supply chain.
Innovation & IP
Not only does ground up development enable you to innovate, it means you own that innovation. IP is a major asset to a business. It sets you apart from the competition and gives you a competitive advantage in the market because, provided you have protected your designs, no-one can copy you. This ability to fulfil the needs and desires of your customers in a way that no other brand can, will also allow you to justify a higher price point.
Ability to change factories
If you own the IP and the product is not reliant on background IP owned by the factory, you can change factories whenever you like. This may mean making new tooling with another factory so that you can split production (for supply chain security and the ability to negotiate) or move the tooling somewhere else. It puts investors minds at risk if you aren’t tied to one manufacturing partner and enables you to build a global supply chain, manufacturing locally to reduce landed cost of goods.
Examples
Private labelling: Mokobara
Mokobara approached us in 2019 to design their hero cabin suitcase. Having found an experienced factory, they were only looking to make small changes to a classic hard case design to keep the tooling costs down. Selecting features such as the trolley handle and wheels from a catalogue, we designed a bespoke shell and ownable colour range. They have since gone on to become one of India’s fastest growing product startups building on the strength of their brand and market position.
White labelling: Wild
Wild initially launched in off-the-shelf packaging to test their deodorant. This is a perfect example of when white-label works because after all, your main product is the formula inside. They subsequently approached us to design their iconic bespoke refillable packaging.
Ground-up design: Quell
Quell wanted to revolutionise not one but two industries; fitness and gaming. There was nothing on the market that came even close to the vision they had in mind and so we worked with them to develop a novel gaming platform and wearable from the ground up.
If you want to discuss options for your business, get in touch.
