Marns CDA Reference & Resources

OEM vs. Retail

A purchase guide

     When looking to purchase any product especially on the web you will find various duplicates of what appears to be the same item except for the little notation of OEM or Retail..  It is hard enough finding the right products at times without this added confusion. What I am hoping to do in this article is dispel some of the concern and explain what OEM is and how it can be good or bad depending on the situation.

      So what is OEM and is it good or bad?  Well the textbook definition of OEM is (Original Equipment Manufacturer) and in the beginning it meant just that but over the past 10 years or so OEM has actually changed. Now there are two widely excepted definitions for the term OEM. One is equipment supplied to a company for resale or incorporation of a product into another product. What this means is OEM producer “A” makes a product specifically for Company “B”. Company “B” sells that product with a specific model number unique to the reseller. This type of OEM can be seen all over with retail organizations like Bust Buy and Sears, you will see two of the same product with model numbers identical down to that last digit then wouldn’t you know it that last digit is different.. Sometimes this is done because one of the resellers wanted a specific option changed other times and more predominantly this is done so that the price scavengers don’t take advantage of the retail organizations. What I mean by price scavengers are the folks that go back and forth between retail groups with the lowest price guarantee to get that extra 5%. What does this mean for the consumer? Well this type of OEM can mean several things first and foremost when an OEM product is advertised please look closely at the fine print more often then not you will find that the manufacturers warranty is much shorter if any at all on OEM products. The responsibility of the product is left to the seller. Or you might see that the reseller must provide the warranty or do the exchange of the defective product and the original manufacturer. This can put the consumer at a disadvantage. A personal example of this is CPU’s I purchased an AMD 3200+ 64bit 939 socket CPU the CPU was defective. I purchased a retail version meaning I deal with AMD directly for the exchange not the retail organization. This can have pro’s and con’s in my situation it was a pro for many OEM CPU’s only come with a 6 month warranty maybe a year. Now my CPU was not installed until it was around six months old but because I got the retail versions AMD swapped it out and I had a new CPU within weeks. So what I am trying to say is when purchasing a product; hardware in particular and you have a choice between OEM and retail and the specs are the same look at the warranty then see what the difference in price is if for example OEM product 1 is 100 USD and Retail product 1 is 105 USD but the warranty on retail is 3 years and the warranty on OEM is 1 year then maybe the 5 bucks is worth the piece of mind.

     The second type of OEM is defined as the use of a product or component and reuses or incorporates it into a new product with its own brand name.  This situation is less likely to cause confusion because of one main fact that is it generally a new product or named different and therefore a consumer is less likely to see the OEM label. A good example of this is retailer specific products like Wegmans or Wal-Mart brand goods. These products are manufactured by another company with the retailer’s Name brand. This type of OEM was Brought on during the generic product era probably in the 1980’s not that it wasn’t in practice before but it wasn’t seen as much. These OEM products or copycat products are many times even manufactured by the original company with slight changes so that the original still remains different. This practice will be more dominant in the store front retail chains / franchise rather then in the web retail market although that is a general statement and there are many online companies that specialize in this type of retail..

     In a nutshell what I am trying to explain is that OEM is not good or bad it can be used to lower consumer cost but sometimes that cost cut will burn the consumer in the long run.. My general rules when purchasing OEM vs. Retail products is this..

1. Compare the percent cost saving to the lack of support or warranty. Make sure you are not saving a few dollars just to get burned 6 months later by a faulty product.
2. Be aware of similar product and the difference between them it might only be a model number to differentiate between retailers. If the price is right and the specs are the same then you might be wise to save in this situation..
3. Software is one portion where OEM almost always saves the consumer big bucks. Cautions to the wise though make sure it is not a limited license or limited compatibility to hardware.
4. If the price seems to good to be true it generally is.

Remember this article is a generalization not all OEM products are the way explained above and my rules are just that MY WAY of purchasing equipment. Do not come back and tell me you got burned by listening to what I say about OEM products remember if it OEM there will be specs.

Paul J Reitschky

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