What does OEM and ODM mean in cosmetics? - Crescent Seoul

Written by Ahyeon Song

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Index

1. Description of OEM in cosmetics
2. Description of ODM in cosmetics
3. Similarities and differences between OEM and ODM in cosmetics
4. Benefits of manufacturing Korea OEM cosmetics
5. Benefits of manufacturing Korea ODM cosmetics
6. Conclusion

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1. OEM : Original Equipment Manufacturing

OEM refers to producing goods under a custom brand name as requested by the ordering company. 

The Korean cosmetic OEM market operates by manufacturing finished products according to the specifications of the ordering company and delivering them with the requested brand name. It produces parts or products under a private label so that the ordering company can market them as desired. Even when large corporations outsource production to subcontractors, they utilize the OEM method.

In summary, Korean cosmetic OEM companies assist in the manufacturing of skincare or makeup products to launch private label cosmetic brands.

By collaborating with these companies, you can create your own brand line and attach your own label.

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I will explain cushion foundation as a representative example of cosmetics manufactured through OEM.

IOPE, part of Amore Pacific, Korea's largest cosmetics company, launched the world's first cushion foundation. The first cushion foundation, IOPE's Air Cushion (launched in ), was an instant success in Korea, followed by Hera, another brand owned by Amorepacific, and many other Korean cosmetics brands.

At a time when cushion foundation has become a commonplace item in Korea, and even mid-priced products have excellent quality, global luxury brand YSL Beauty recognised the value of cushion foundation and commissioned a Korean cosmetics manufacturer to launch a cushion foundation. Since then, many global brands have developed and manufactured cushion foundations at Korean private label cosmetics manufacturers, which can be seen as a representative example of Korean cosmetics OEM manufacturing. Global cosmetics brands have their own private label formulations through Korean OEM cosmetics manufacturers and sell them under their own names.

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2. ODM : Original Development Manufacturing

In ODM, the orderer develops and produces the product. In other words, the manufacturer not only produces but also conducts research and development directly.

ODM is utilized when a company has secured unique technological capabilities. In the cosmetics industry, ODM companies may develop functional cosmetics, complete patent registration, and then propose production and sales to marketing companies. Many globally renowned cosmetic brands are often produced by Korean cosmetic manufacturers. This is because many leading Korean cosmetic ODM companies have established numerous contracts with global cosmetic companies.

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So, what are the similarities and differences between OEM processes and ODM processes when manufacturing cosmetics?

3-1. Commonalities
between Korean cosmetic OEM manufacturing and ODM: 

1. Both attach the ordering company's brand name to the products. 
2. They do not handle distribution and sales directly; these tasks are managed by the companies that commission the cosmetic production. 
3. As Korean cosmetic OEM and ODM manufacturers have grown, it has become easier for small and medium-sized enterprises to enter the cosmetics industry. 
4. Companies can launch cosmetics without having their own production facilities by partnering with Korean cosmetic OEM and ODM manufacturers. 
5. The increase in the number of mid-range cosmetic brands in Korea is related to the growth in scale and number of Korean cosmetic OEM and ODM manufacturers.

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3-2. Differences
between Korean cosmetic OEM manufacturing and ODM: 

1. The key difference lies in whether the company directly develops the product or not. 
2. Korea's leading cosmetic ODM manufacturers are already saturated; they do not enter into contracts with companies unless they have prior collaboration experience or are large cosmetic companies. Therefore, for small brands just starting out, it is recommended to contact Korean cosmetic OEM companies that have long-term experience working with Korea's leading cosmetic manufacturers.

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If you are looking for more details, kindly visit OEM ODM Cosmetics.

4. Benefits of manufacturing Korea OEM cosmetics

1. You can create private label cosmetics the way you want.
2. High sales effects can be expected through various promotions
3. This is useful if you do not have expertise in cosmetics manufacturing or production.
4. Initial investment costs are reduced.

Disadvantage

1. There are not many cosmetics manufacturers capable of small quantity OEM manufacturing.
2. burden of inventory

To summarize, collaborating with the Korean OEM cosmetics manufacturer has the advantages of strengthening brand identity, facilitating quality control, achieving differentiation points, and protecting intellectual property rights!

5. Benefits of manufacturing Korean ODM cosmetics

1. Cosmetics that are already certain to be produced can be produced without worrying about manufacturing facilities.
2. You can focus only on distribution or brand management

Disadvantage

1. There are cases where the same product is sold by different brands.

To summarize, the advantages of working with a Korean ODM cosmetics manufacturer are reduced cost and time, the company's expertise can be utilized, and mass production is possible by securing an existing production line!

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Conclusion

The MOQ of many talented cosmetics manufacturers is a bit high, so it may be burdensome to inquire about manufacturing private label cosmetics. However, although Crescent Seoul collaborates with Korea's top OEM cosmetics manufacturers, we can manufacture and produce according to their minimum MOQ, so we can prevent leftover inventory as much as possible, which is one of the disadvantages of cosmetics OEM manufacturing.

We hope this information about OEM and ODM in cosmetic manufacturing was helpful to you! If you would like to collaborate with Korea's top cosmetic OEM manufacturer, please contact Crescent Seoul at any time!

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As South Korea continues to establish itself as a powerhouse in the field of skincare and aesthetics, the advantages of Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) for fillers and botulinum toxin goods have become increasingly apparent. In this article, we delve into the compelling advantages that make Korea a sought-after destination for OEM and ODM in the beauty and skincare sector.

1. Cutting-edge Innovation:

South Korea has earned a reputation as a global leader in skincare innovation. Its beauty industry is driven by research, development, and the adoption of groundbreaking technologies. When opting for OEM and ODM services in Korea, businesses gain access to state-of-the-art facilities and expertise that enable them to create cutting-edge fillers and botulinum toxin products. This translates to products that are not only effective but also on the forefront of skincare advancements.

2. Quality Assurance:

Korean manufacturers adhere to stringent quality control measures and regulatory standards. By partnering with reputable OEM and ODM companies in Korea, brands can ensure that their fillers and botulinum toxin goods are produced with the highest level of quality, safety, and efficacy. These manufacturers often hold certifications that reflect their commitment to producing safe and reliable products.

3. Customization and Flexibility:

OEM and ODM services in Korea offer a high degree of customization and flexibility. Businesses can collaborate closely with manufacturers to develop products tailored to their brand identity, target market, and specific formulation requirements. Whether it's adjusting ingredient concentrations, textures, or packaging, Korean manufacturers excel at accommodating unique requests.

4. Cost-efficiency:

Outsourcing the production of fillers and botulinum toxin products through OEM and ODM services in Korea can often lead to cost savings. Korean manufacturers benefit from economies of scale, established supply chains, and efficient production processes, which can ultimately translate to competitive pricing for their clients.

5. Market Expertise:

The Korean beauty and skincare market is known for its trendsetting nature and strong consumer demand. Manufacturers in Korea have a deep understanding of market trends, consumer preferences, and regulatory guidelines. This expertise can be invaluable when developing products that resonate with both domestic and international markets.

6. Regulatory Compliance:

Korean manufacturers are well-versed in navigating complex regulatory landscapes. They are experienced in ensuring that products meet the regulatory requirements of various markets, which is crucial for the distribution and sale of fillers and botulinum toxin goods globally.

7. Speed to Market:

With established supply chains and efficient production processes, Korean manufacturers can offer shorter lead times for product development and manufacturing. This allows brands to bring their fillers and botulinum toxin products to market more quickly, capitalizing on emerging trends and consumer demand.

8. Innovative Packaging and Design:

The Korean beauty industry places significant emphasis on packaging and design aesthetics. Korean manufacturers are adept at creating visually appealing packaging that captures consumer attention and aligns with brand messaging.

From cutting-edge innovation to quality assurance, customization, and market expertise, Korean manufacturers offer a comprehensive range of advantages that can propel brands to success in the dynamic and competitive world of beauty and skincare. As the industry continues to evolve, partnering with Korean OEM and ODM companies can pave the way for transformative product development and market expansion.

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