What Is the Meaning of OEM?
The term "OEM" is common in the industrial sales sector. It is a term that is used in a variety of industrial environments. Use of the term can vary from organization to organization. It applies most particularly to manufacturing ... from software to heavy equipment, transportation and all kinds of machinery.
Historically OEM in Industrial Sales meant the following:
Originally, OEM referred to a manufacturer or distributor that provided equipment or components to other companies to resell or incorporate into other products using the reseller's brand strength. This is a significant type of industrial business-to-business sales.
An example of this would be Whirlpool manufactured appliances to be sold by Sears under the Kenmore label. Another example would be Interstate Batteries, a supplier of batteries to a host of automobile manufacturers. In principle, this meaning is still in common use by a variety of manufacturers, suppliers and resellers.
Today, OEM in Industrial Sales means the following:
More recently, OEM refers to the company that acquires a product and then incorporates it into a new product with its own name. An example would be brand name automobile or other manufacturers as opposed to "aftermarket" manufacturers that are not as closely regulated.
How Does OEM integrate into other aspects of Industrial Sales?
The previous terms with their meanings are closely related to VAR (Value Added Reseller) where a company takes an existing product and then adds its own unique or additional value, and then resells it as a "new" product. In the industrial sector, the individuals who typically negotiate the terms between suppliers and re-sellers include industrial salespeople.
Also related to OEM's are the "Tier 1," "Tier 2," and "Tier 3" suppliers -- especially in the automobile manufacturing sector. Tier 1 refers to companies such as Delphi, Dana and Johnson Controls that sell to the OEM's. A Tier 2 company would be selling to Delphi, etc. A Tier 3 would be selling to a Tier 2, etc. All three types of suppliers generate business through the efforts of industrial salespeople and manufacturers representatives who demonstrate products and negotiate the terms between the suppliers and manufacturers.
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Every Hi-Line representative manages a territory, similar to a route sales position, where quality industrial supplies are delivered directly to the customer's bins.
If you enjoy the industrial community, working with people, and being your own boss, then contact Hi-Line at industrialsales@hi-line.com for a rewarding career in industrial sales.