The advantage of ODM is that it spares importers the need to invest millions of dollars into research and development in order to create a new product from scratch. Why reinvent the wheel when you can just improve one that already exists? And by eliminating or vastly reducing the expense of product development, importers can focus more on marketing strategies.

The disadvantage of ODM is that it can be more difficult to differentiate your product from competitors’ products that are manufactured according to the same design. Although ODM requires less start-up capital, price competition tends to be steeper, resulting in slimmer profit margins. For example, a customer looking to purchase an ODM laser pointer is more likely to choose based on price than based on differences in color or brand. To really differentiate your ODM product from the others on the market, while still remaining competitive price wise, can require a significant amount of creativity.