Does Your Manufacturer Make Their Own Products?Author: John Honovich, Published on Apr 26, 2009
A lot of video surveillance products look the same. The reason may be becuase they literally are the same. Big Western manufacturers routinely buy and re-brand a small number of Asian products.
During a week of meetings in Asia, it has become clear to me that this practice is very widespread - a common practice for analog incumbents, IP video market leaders and new entrants from IT.
Like many, I was certainly aware of the practice of OEM (Original Equipment Manufacturer) deals where, typically, a Western company re-sells Asian products under the Western company's brand. However, I had previously falsely assumed that this was a minor practice.
How Western Companies Cover-Up This Practice
The big Western companies that engage in this practice go to great lengths to cover up this practice. Here are they key tactics:
- Strict Non-Disclosure Agreements: Asian manufacturers can and likely would be sued if they named who was OEMing their products.
- Restricting Asian companies marketing in Western markets: Western companies often pressure their Asian OEMs not to advertise or exhibit at trade shows in the US or Europe so that the community does not uncover these relationships.
- Lying to Journalists/Analysts: Manufacturers who I know OEM products routinely assure me that they do not.
- Just Adding their Label: Often Western companies take the finished Asian product and simply add their label, with no enhancements.
- Make cosmetic changes to products: To conceal this practice, Western manufacturers will often modify the housings of cameras or front panels of recorders to make the product look unique.
Certainly, these practices show that the Western manufacturers know this is a questionable, if not unethical, practice where they profit off their brands rather than delivering value.
Why This is Important
In a technical business, like video surveillance, buying direct from the 'real' manufacturer is almost always strongly preferable. The systems can be complex and need to last for many years. If you need support or a product enhancement, it is far more likely to be accomplished by working directly with the developers than through a 3rd party like the big brand.
Secondly, as a middleman, the big brands add significant cost. While they claim to test, validate, provide support and training - their main cost and value is simple - selling and marketing products. In an increasingly connected world, do we really need to pay for these middlemen?
Finally, these OEM deals actually increase confusion in the marketplace. The big brands portray each of their offerings as unique. However, if they were clear about what was being OEMed we could easily and quickly understand what real differences did exist.
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