OEM vs ODM vs Private Label:
Which Manufacturing Model Fits
Your Supplement or Skincare Brand?

For a brand owner, these differences affect more than the first order. Before choosing a route, you need to know who owns the formula, what testing is included and who handles the regulatory work. An existing formula can reduce development work, but it does not automatically give your brand permission to sell the product in every market.

This guide is for businesses launching a first product, expanding an established range or looking for a more dependable manufacturer. It focuses on supplements, skincare and personal care, with guidance for food, beverages and home care too.

What does OEM manufacturing actually mean?

Under OEM, short for Original Equipment Manufacturer, the factory makes a product to your specification and sells it to you under your brand.

You do not have to arrive with a finished formula. You can start with a brief: who the product is for, what it should do and your target cost. The manufacturer’s laboratory then develops the formula, prepares samples for review and carries out the agreed testing, including stability testing.

OEM is worth considering when a specific formulation is central to your product. Before paying for development, agree what you will own and which documents you will receive. Having a formula developed for you and owning the rights to it are separate matters.

What does ODM manufacturing mean?

With ODM, short for Original Design Manufacturer, you start with a formula the factory has already developed and adapt it for your brand.

Changes may include fragrance, colour, active concentration within an agreed range, or packaging. Ask which changes are possible and what testing they require. The manufacturer usually retains the base formula, so any right to use it elsewhere needs to be agreed in writing.

ODM can suit a retailer adding to its range, a distributor with an established sales network or a founder with a clear audience. If an existing formula meets your customers’ needs, it may make sense to build on it. Use the sample review to decide whether it is good enough for your brand before requesting custom development.

Where does private label sit?

Private label means selling an existing product under your own brand, usually with a choice of labels or packaging and little scope to change the formula. It overlaps with ODM, and suppliers use the terms differently. Ask to see the product and confirm exactly what you can change.

It is often the quickest route because less development is needed. The trade-off is limited exclusivity: other brands may use the same base product. Check what regulatory work remains for your brand and target market even if the supplier says the product is already registered.

Contract manufacturing is a broader term that can cover OEM and ODM work. OBM means Original Brand Manufacturer: a factory selling products under its own brand. When discussing a quotation, ask the supplier to describe the work and rights included rather than relying on the abbreviation.

OEM vs ODM vs private label: the difference at a glance

Which is cheaper, OEM or ODM?

ODM and private label usually need less spending on development because the base product already exists. That can be useful for a first launch, when you are still testing demand. Ask the supplier to separate development and testing fees from production and packaging costs so you can see what you are paying for.

Before comparing unit prices, ask what you will pay for the first order, what repeat orders will cost and what rights are included.

Owning a formula can give you more options when negotiating production, extending the range or selling the business. Those options depend on your agreement and access to the technical records. They do not guarantee that OEM will become cheaper than ODM.

Compare quotations against the same product brief, packaging and expected volumes. Include the minimum order quantity and the amount of stock you would need to commit to. A vitamin C chewable and a sunscreen need different development work, so there is no useful universal break-even figure. A three-year comparison can help, provided the sales assumptions are realistic.

Who owns the formula? Five questions to settle it

Ask about ownership while the development proposal is being prepared. This is especially useful if you are replacing a manufacturer because of inconsistent quality, capacity limits or delivery problems. Before asking another factory to make the same product, establish which formula rights and records you can take with you.

How does your dosage format change the answer?

The product format helps determine how much development and testing you need. A formula that looks suitable on paper still needs to work in the finished tablet, sachet or bottle. Discuss the points below when reviewing a sample and its quotation.

We manufacture across all of these, including powder drinks, coated and uncoated tablets, chewables, Halal certified vegetable capsules filled with liquid or powder, creams, lotions, liquids, scrubs, oils, and toothpastes.

A face mist and a sunscreen call for different testing discussions, even though both are skincare products. Explain the format and the claims you want to make before asking whether OEM or ODM is a better fit. Ask the manufacturer to show which parts of the brief an existing formula meets and which would require development.

Does the manufacturer’s certification affect which model you choose?

Yes. Check whether the manufacturer can support your product category and intended market before comparing prices, especially if you plan to export.

In Malaysia, health supplements require registration with the National Pharmaceutical Regulatory Agency (NPRA) and receive a MAL number. Cosmetics are notified and receive a NOT number. Cosmetic notification is not product approval: the responsible company must still meet safety, quality and other requirements. The applicable regulatory process needs to be completed before the product enters the market.

OEM, ODM and private label describe manufacturing arrangements, not regulatory clearance. If a supplier offers an existing product, ask which registration or notification applies, who holds it and whether your proposed brand or product changes require a new submission. Settle these questions before committing to a launch date.

Our plant holds GMP from the Malaysian Ministry of Health, ISO 22000:2018, HACCP MS 1480, MeSTI, Halal certification from JAKIM, and US FDA registration. Ask us which certificates and supporting documents apply to your product category and destination market.

Do you need your own Halal certificate?

Confirm the arrangement for your brand before printing the Halal Malaysia logo. A factory’s existing certification is not enough to assume that your new product is covered.

Brand owners can apply for certification in their own company’s name when the manufacturer holds the appropriate OEM certification. Confirm the applicant, the relevant product scheme and the products covered with JAKIM or the responsible state authority. Include responsibility for the application and supporting documents in your manufacturing agreement.

Working with a certified manufacturer gives you an established facility and Halal controls to work with. You still need to check the scope and validity of the certificates relevant to your project, including any renewal requirements.

Allow for certification work in your launch budget and schedule, alongside formulation, packaging and production.

Requirements vary by product category and destination. Check the current requirements with JAKIM and NPRA, or ask us to review what your product will need before you set a launch date.

How does this apply to beverages, premix and home care?

The same choice applies: develop to a brief, adapt an existing formula or use a finished product. The technical work depends on what you are making.

For beverages and premix powders, discuss taste, solubility and shelf stability. Food safety systems such as ISO 22000, HACCP MS 1480 and MeSTI are relevant to food manufacturing. Confirm the product’s classification and applicable requirements before treating it as a food or a health supplement.

For home care, ask about the surfactant system, viscosity and fragrance stability, as well as compatibility with the bottle or other packaging. Review the formula and packaging together, particularly where the product could degrade certain plastics over time.

For both categories, put formula ownership and permitted use in writing. Paying for development should come with a clear agreement about what that payment buys.

Common mistakes when choosing a manufacturing model

1. Comparing unit prices without checking development fees, testing, packaging, MOQ and repeat-order costs.
2. Starting development before ownership terms are agreed in writing.
3. Assuming you can move an ODM formula to another factory without written permission.
4. Agreeing formula ownership but leaving access to stability data and specifications unresolved.
5. Printing the Halal logo before confirming that the certification covers the branded product.
6. Leaving the registration or notification holder unspecified, then finding that you cannot manage a change or expansion as planned.

How does Edmark work with OEM and ODM clients?

Our first factory opened in 1989. Today, our plant covers 4.4 acres with 252,000 square feet of built-up area, and we export to more than 29 countries. We manufacture food and beverage, health supplements, traditional products, personal care, and home care products.

We start with your brief and prepare a proposal, then a sample batch for you to review before confirming the order. Our laboratories handle formulation and testing. Production includes quality assurance, with the applicable registration work coordinated as part of the project. Shipment follows final QA approval.

We also support packaging, registration paperwork and Halal documentation. If you are launching, expanding a range or changing manufacturers, request a quotation with your product idea, target market, preferred format and expected order volume. Tell us what needs to improve if you already have a product. You can also browse Key Insights & Resources for more manufacturing guides.