Why OEM Manufacturer ?There are many reasons why companies outsource their production to OEM manufacturer. They can save on capital costs because they do not have to pay for a facility and the equipment needed for production. They can also save on labor costs such as wages, training and benefits. Some companies may look to contract manufacture in lower-cost countries, such as China or Malaysia for cost effectiveness.
For large companies that are trying to extend into new markets without any immediate plan to build own facility, contract manufacturing may be a good choice. For small companies, an OEM manufacturer may be an answer to an economical way to get started without large capital investment in manufacturing facility. On the other hand, these companies can take advantage of the skills that they may not possess which the OEM manufacturer does.