If you are able to enter into an OEM licensing agreement, there are many factors to consider. While this type of B2B relationship can be very valuable in helping you grow your business, you will also want to make sure that you protect its brand carefully. This applies to all parties involved. In addition, the manufacturer of silencer finally does not have many inputs (if ever) in terms of the final design of the car, and Microsoft is probably not too interested in the color of the computer. If the silencer doesn`t work or Microsoft Office doesn`t work properly, it`s up to Honda or Best Buy to make the necessary repairs. The OEM license agreement ensures that the silencer or software was properly manufactured and then properly installed by Honda or Sony. While there are a lot of thinking, entering into an OEM licensing agreement can be a strategic way to grow your business if you ask the right questions. The questions to be asked before such an agreement is reached are: The OEM licensing agreement exists between the different parties to deal with issues of branding, confidentiality, payment, quality assurance and time. Read 4 min A first OEM (OEM) is a company that manufactures parts that can then be marketed to another manufacturer. For example, when Company A manufactures cables that can be used as telephone chargers and Company B manufactures mobile phones that supply Company A cables to purchase their phones, Company A is an OEM. Company A will manufacture the cables according to branding and company B specifications.
While Company B will ultimately focus on a relationship with the consumer, Company A is focusing as an OEM on a B2B (business to business) relationship; the consumer is another business. The two main sectors where an OEM is a candidate are the automotive industry and the technology industry. For example, if you buy a new Honda from a licensed Honda dealership, the silencer may not have been manufactured by Honda, but by an external OEM. Another example is to buy a Sony computer from Best Buy that is already installed with Microsoft Windows.