OEM is short for Original Equipment Manufacturer. ODM is short for Original Design Manufacturer.

What these manufacturers do is to custom make product for their clients. Factories that have the capabilities to make molds for product. The factory's R & D Dept. ( Research & Development ) and experienced design teams, supported by sophisticated manufacturing automation and in-process testing to deliver low cost, high quality solutions to its clients, will make a proto-type for the client.

The factory does have their own mold making machines, plastic injection, etc.

Upon approval from the client, the factory will go into mass production and produce that particular item. Once the order or orders have been filled, the manufacturer will see if there is still a need for that item on the market. If so, they will market it to their existing clients as well as seek new clients. Once there is no longer a market, the factory will either shelve the mold or sell it off. As well as sell off the machines used to produce it.

And then it's on to the next product.

A manufacturing factory has many production lines and produces product in bulk quantities.

An OEM / ODM manufacturer sells these products with no brand name or "generic" label. The manufacturer will "brand" the products to each individual client's needs. Either with their name and / or logo.

For these type of factories, mainland China is a gold mine. As labor, land, rent, construction, are all very inexpensive. Compared to that of western countries.

And to put it in a nutshell: OEMs are not the original manufacturers; they are actually the customizers. OEMs also modify existing products and produce as a new or modified product.

Most OEM factories sell only to high volume distributors and wholesalers.