The OEM term originated in electronics and automotive — Foxconn building iPhones for Apple is the textbook example. In CPG, the same model applies: you walk in with a finalized formula or product spec, and the OEM produces it under your brand. Unlike private label (where the factory's stock formula is the starting point) or white label (where the entire SKU pre-exists), OEM means the spec is yours.

Practical implications in supplements, cosmetics, and food: OEM means custom contract manufacturing with formula ownership clarity. You bring the IP. The factory signs an NDA and a quality agreement. They produce only your SKU on dedicated production windows. They cannot sell your formula to a competitor.

OEM MOQs reflect the dedication: capsule OEM runs typically start at 25,000-50,000 bottles to justify the line changeover, raw material qualification, and stability testing. Lead times stretch 16-26 weeks for a first run including formula validation. Costs run 20-40% above equivalent private-label volume because of the dedicated overhead.

OEM makes sense when product is the moat: novel ingredient combinations, proprietary delivery systems, or category-defining claims that require formula control.