How exactly does one define Original Equipment Manufacturer?
There are some companies that do not make all the parts of whatever final product they are producing and it would be the original equipment manufacturer company that produces these parts for them. The reason why companies do this is because this type of practice actually adds value to the final product. As you might have already figured out, these products made by an original equipment manufacturer would be custom made parts of a final product and this is the main reason it becomes quite expensive.
The best example to be given for this kind of relationship between two companies would be that of an auto company that orders car parts from another company. There is a wide variety of car parts that original equipment manufacturer custom made for reputable companies. The sole role of OEM is to produce components because other tasks such as assembly or incorporation of these components to the final product would be the job of the company they are working with.. Once the product has been completed, it will then be sent to the car company sellers to be sold to whoever wants a new car.
As the world rapidly advances, OEM also advances with it and now these companies have a new term used specifically by companies under the computer industry. The OEM is the one that would create a product, another company would buy the product, rebrand it by incorporating it into their product, and then sell it off under their company name. A good example of this would be computer software being made by one company while other companies that sell computers would buy these software, use it in the computers they produce, and then sell them of under one brand name, their very own brand name. The OEM in this case would be the company tat does the incorporation and rebranding of the computer component they bought from another company.
Now let us dig deeper on how the OEM really works.
It cannot be denied that the OEM and the VAR would always be companies that work hand in hand. The production of certain parts is an important aspect in the finish product and in making a sale, which makes EOMs very valuable to VARs. It would be very rare for you to see an OEM asked to be a part of the decision-making process on the final product because they just usually make parts and sell them to VAR companies, nothing else.