Original equipment manufacturers (OEM) is a cooperative mode in which brand producers are responsible for designing and developing new products, controlling sales channels, and entrusting others to produce products by utilizing their core technologies instead of directly delivering products. OEM toy production mode can reduce costs, so enterprises invest more money in product development.
Is there any risk in OEM toy production?
This article describes what OEM toy risks are and how to reduce them. Let’s read on to find out more!
What are the leading OEM toy risks
To reduce operational risks, toy brand manufacturers usually analyze and evaluate the risk status before choosing OEM toys production factories。
1. Quality risks
There are many types of quality risks. For example, factories fail to meet the quality standards of the client, resulting in quality risks. Or the quality standards between different countries and regions are different, resulting in the quality of the same batch of products; In addition, factories may choose inferior materials with lower prices to reduce costs, which will cause quality problems and affect the brand image.
2. Technical risks
All kinds of processed products have different technical parameters, and any technical parameters that fail to meet the standard may cause technical risks; Secondly, there may be competition between brand producers and factories. To facilitate production, brand producers need to share some technical information, such as patents and brands, which may lead to the risk of technology leakage.
3. Delay risks
Most factories produce toys for more than one brand at a time, and the risk of late deliveries increases if factories run short of capacity.
4. Legal risks
OEM toy production factories using unlicensed proprietary technology, or violating a country’s labor laws, can increase legal risk; Although factories are responsible for the legal risk, it will also have a certain impact on the social image and marketing of brand producers.
5. Financial risks
If OEM toy production factories have insufficient cash flow, high loan ratio, bad assets, investment mistakes and other problems, it may cause financial risks, operation difficulties, and even bankruptcy.
How can we effectively reduce OEM toys supply chain risks
Here are some tips to reduce OEM toys supply chain risks:
1. If the contract between cooperative enterprises is not detailed and comprehensive, it will cause legal risks. There should be a complete agreement on equipment technology, standard quality, price, delivery cycle and so on to ensure worse-free cooperation. In particular, it is necessary to prevent the unclear part of the contract and prevent OEM toy production factories from producing their products with shoddy and low-quality raw materials.
2. Customized toy products in the production process will appear a lot of unpredictable things; in the crisis, there may be some risks, and cooperation is risky. Therefore, it is important to think carefully before cooperating with OEM toy production factories and be prepared to take risks once you have made a decision.
3. The choice of OEM toys production factories should be careful, do not chop and change, and prepare for 1-2 years of long-term cooperation when deciding to cooperate, because once the cooperation starts, the product formula, raw materials and technology will be roughly determined, and the products will be shaped gradually.
If you hastily change OEM toy production factory after consumers use the habit, It may lead to differences in the appearance and quality of toy products. Even if the same formula and process are used, the quality of products in different OEM toy production factories will also be different. Most consumers buy toys for children, so the appearance and quality of toys are closely related to the consumer’s purchase rate.
4. There are many OEM toys production factories; if you want to ensure that the production technology is very reliable, you must choose an experienced OEM toys production factory, which naturally has a very reliable guarantee in terms of production strength, from the supply of raw materials to the entire production process, can provide a relatively powerful one-stop service.
For example, some OEM toys will have a long production cycle, and there will be many unexpected things after ordering. In crisis situations, all cooperation is risky. For example, many small and medium-sized OEM toy production factories affected by the COVID-19 pandemic have directly closed down this year, and the basic ones that can stay for normal operation are large-scale toy factories with high-pressure resistance in the industry.
Your best China toy manufacturer——UNION VISION
Our company is a wholesale toy manufacturer with more than 20 years of experience in product development, production, and exporting, and have a production base of 8,000 square meters, a warehouse of 10,000 square meters, and 200+ employees.
We are excellent in factory audits, such as BSCI, WCA, SQP, etc.,https://certificationinindia.com/bsci-certification-business-social-compliance-initiative/
We have professional product design teams, product development teams, and QA teams. Our supply capacity and highly qualified team provide a strong guarantee for effectively meeting customers’ OEM and ODM requirements.
We will evaluate and score each factory to minimize the risk of future cooperation. In the process of cooperation, we will also keep close communication with OEM toy production factories to ensure that product quality meets customer standards, protect customers’ OEM toy products information security, and provide a high-quality OEM toy supply chain for global customers.
We are constantly expanding our global market share, supplying supermarkets, importers, e-commerce clients, etc. https://unionvisionchart.com/oem-toys/
Looking forward to becoming your partner in developing products and markets. Meeting your customized requirements is our goal!