The list of challenges faced by OEM startups is quite long, and it’s not a surprise that many new OEM startups falter before they even get to fly.
Depending on which sector you’re entering, from consumer electronics to specialized electronics, there are a few big names who have pretty much consolidated the market.
These new companies have to survive in a highly competitive market with tons of barriers to entry. These barriers typically include scale and scope, capital-intensive productions, research and development, and switching costs, among others.
So how can an OEM startup navigate these murky waters as sharks circle around? By partnering with an EMS provider, of course! These are some of the benefits that OEM startups get by bringing an EMS provider on board:
Focus on the Bigger Picture: Design, Market, and Sell!
OEM startups can outsource their manufacturing to EMS providers, which allows them the time and resources to focus on what really matters. For a startup, this typically means design, marketing, and sales.
If an OEM is just starting out, it’s obvious that they believe they have a technology that can be marketed and sold. So, it’s only sensical that they focus on the design and development of this technology or product, market it effectively, and sell as much as they can.
Reduce Risk by Reducing Capital Investment
If you’re a promising startup, you may have been offered enough capital that you can start manufacturing on your own, well, at least some of it. However, the more capital investment you accept, the more your risk goes up. You’ll need to post extraordinary sales to justify the investment.
Alternatively, if you partner with an EMS provider for manufacturing, you can avoid this unnecessary pressure on your company. Plus, you can adapt to market demands as you go!
Let’s suppose a marketing tactic goes viral, and suddenly your product is in hot demand. Solution? You can partner with multiple EMS providers to meet this demand and convert it into sales!
Leave Sourcing and Purchasing to the Experts
Startups barely have enough money to go around, let alone enough to set up a purchasing and sourcing team! You can cut costs and utilize the purchasing and sourcing power of EMS providers, who have been working with suppliers for quite some time.
Not having to worry about how and where to source the components? Check!
Conclusion: Partner with an EMS Provider
Look, there’s a reason why so many OEMs prefer to outsource to their EMS partners. It’s not just the startups; Apple also outsources its manufacturing to companies like Foxconn.
In conclusion, it’s prudent business sense to outsource OEM manufacturing to cut costs and to avoid biting more than you can chew.
If you’re an OEM looking for a suitable EMS provider or an EMS provider looking to work on an OEM project, Find an EMS is the platform you need! It’s a free, convenient, and intuitive platform designed to make OEM and EMS provider partnering easy.