Original Equipment Manufacturer

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Original Equipment Manufacturer

1. A company that makes a product that its customers then use in creating their own products. For example, the manufacturer of an automobile part may sell the part to a car maker, which then builds its own products. In this case, the original equipment manufacturer is the automobile part maker. OEMs often work closely with their customers to integrate their products; for example, an OEM may design a certain product exclusively for one customer. OEMs are especially common in computer and other technology sectors.

2. A company that buys a product from another company and uses it to make its own product. This definition contradicts the above one, and is used predominantly informally. An OEM in this sense is more properly called a value-added reseller.