Manufacturing Business Models

OEM vs ODM vs Private Label: What's the Difference

Three terms that are often confused. Here we explain what each one means, how they differ in practice, and which model fits your brand.

Swiss Formula is a European private label dietary supplement manufacturing company providing formulation development, manufacturing, packaging and regulatory support through a network of GMP-certified manufacturing facilities across Europe and Switzerland.

Last updated: June 2026  ·  Content curated by Giannis Moutafidis, Founder & CEO, Swiss Formula

The Core Difference in One Sentence

OEM and ODM describe who designs the formula. Private Label describes under which brand the finished product is sold. They aren't alternative choices — private label is almost always the commercial outcome of an OEM or ODM manufacturing model.

The Three Models in Detail

Customer-Defined

OEM

  • The client provides the exact formula specifications
  • The manufacturer produces according to them
  • Greater differentiation, requires technical knowledge from the client
  • Usually higher development cost and longer launch time
Commercial Outcome

Private Label

  • Describes the outcome: the brand on the finished product
  • Can result from either an OEM or an ODM process
  • The term most commonly used in the European supplement market
  • Doesn't describe how the formula was developed, only who owns it commercially

Which Model Fits You

If...Then this fits
You want fast market entry, low riskODM — selecting a ready-made formula
You have specific scientific knowledge/an idea for the compositionOEM — custom formulation
You want maximum differentiation from competitorsOEM with exclusive usage rights
You're not sure yet and want to test the market firstODM, with the option to move to OEM later

Frequently Asked Questions

Which model has the lowest starting cost?

Private Label with a ready-made formula from a library (i.e. the ODM model) usually has the lowest starting cost, since it doesn't require developing a new composition.

Can I combine OEM and ODM in the same partnership?

Yes. Many partnerships start as ODM (selecting a ready-made or recommended formula) and evolve into OEM (fully custom composition) as the brand matures and gains a clearer identity.

Which model does Swiss Formula follow?

Swiss Formula covers all three models: ODM through a library of 1,600+ ready-made formulas, OEM through custom formulation based on client specifications, and Private Label as the commercial outcome of both — always with your own brand on the finished product.

What Swiss Formula Does

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