When deciding between ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) production, cost is a primary concern. The straightforward answer is that utilizing an ODM's existing design is typically cheaper upfront than providing your own fully custom design for OEM production. This is because ODM leverages pre-developed, proven product platforms. The manufacturer amortizes the research, development, and tooling costs across multiple clients, offering you a lower entry price and faster time-to-market.

However, "cheaper" requires nuanced analysis. Providing your own design through an OEM model involves higher initial costs for design, prototyping, and exclusive tooling. Yet, this investment grants you full intellectual property control, unique product differentiation, and potentially higher profit margins in the long term. You are paying for customization and ownership.

The ODM route reduces R&D risk and capital expenditure but may result in a product similar to competitors using the same base design. The OEM path, while more expensive initially, builds proprietary value and brand identity.

Ultimately, the cost-effectiveness depends on your business goals. If speed, lower startup cost, and market testing are priorities, ODM is financially advantageous. If building a distinct brand with a unique product is core to your strategy, the higher initial investment in OEM production often proves more valuable and profitable over time. Consider total cost of ownership, not just unit price.