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An original design makeup ODM factory (ODM) is a company that designs and manufactures a product, as specified, that is eventually rebranded by another company for sale. Such companies allow the company that owns or licenses the brand to produce products (either as a supplement or solely) without having to engage in the organization or running of a factory. ODMs have grown in size in recent years and as of 2015 many have the scale to handle production for the products that are branded by the buying company. This is in contrast to a contract makeup ODM factory (ODM).
This model is especially used in international trade, where a local ODM is used to produce goods for a foreign company that sees some advantage in the transaction, such as low labor-inputs, transport links or proximity to markets. Innovative and patented technologies developed or owned by the ODM are another cause for this product distribution model. ODM models are also used where local ownership-laws possibly prohibit direct ownership of assets by foreigners, allowing a local company to produce for a brand company - either for the domestic market or for export.
This type of business is part of "outsourcing".