OEM stands for Original Equipment Manufacturer. But what does it mean to be an OEM? Original equipment manufacturers are companies who manufacture components that are used by other companies in their productions, which then sell their finished products to customers. So the firm who purchases components from an OEM add value to the original product. The OEM, often customizes designs to meet the specific requirements and specifications of the company who purchases these components from it. So for example a company like Honda or Harley Davidson does not manufacture all of the components for their motorcycles themselves. Rather, they give orders to another company for them to manufacture OEM motorcycle parts based on their specific needs and specifications. And these motorcycle parts and components are customized and produced specifically to work with their motorcycles.
The relationship between motorcycle manufacturers and OEMs
Traditionally OEMs only focus on business-to-business sales. Although in some instances, they also directly sell their products to customers themselves. So OEMs and motorcycle manufacturers work closely together to produce the final product. Most motorcycle manufacturers work with several different OEMs to provide the different motorcycle parts that they need for their production. Often times a single motorcycle part such as an exhaust or tire can be manufactured by a wide variety of OEMs for each motorcycle manufacturer. And on the other end, OEMs usually produce motorcycle parts for several different motorcycle manufacturers. Usually the OEM makes sub-assembly parts and sells those parts to the motorcycle manufacturer. However there are instances where OEMs make complete items themselves for motorcycle manufacturers to market to their customers. But even in these cases, the OEMs usually don’t play a direct role in determining the final product. Unless, as we mentioned the OEM decides to market its own product and sell it directly to consumers.
OEM motorcycle parts vs OEM parts in other industries
Just so you don’t get confused, keep in mind that OEM has a different definition in different industries. For example the definition of an OEM or OEM parts in the computer industry for example is very different than in the motorcycle industry. In the computer industry, OEM typically refers to the company that purchases parts or products and then rebrands them or incorporates them into a new product and sells it under its own name. But in the motorcycle industry the OEM is always the company producing motorcycle parts for the motorcycle manufacturer based on the design and specifications and needs of the motorcycle manufacturer.