OEM stands for Original Equipment Manufacturer. It is a company that produces components or parts that are used in the products of another company, which then sells the finished item to users1. For example, a car manufacturer may purchase engines from an OEM and install them in their cars. The OEM is responsible for designing and manufacturing the engine, while the car manufacturer is responsible for assembling the car1.
OEMs usually focus on business-to-business sales, while the companies that use their products are known as value-added resellers (VARs) 1. VARs work closely with OEMs to customize designs based on their needs and specifications1.
OEMs are different from original design manufacturers (ODMs), which are companies that customize their products for resale1.