OEM fee structures with contract manufacturing supplier agreements will fall into four primary categories: fixed materials pricing, component cost pricing, cost plus pricing (fixed price), return on invested capital pricing (ROIC).
The assembly contract manufacturing service agreement is often viewed as a three-legged stool: price, terms, service.
Some of the influencing ways a manufacturing contract service agreement within the same category might be different from others could be whether or not the contract agreement is new or, a renewal? If renewal, how many times has it been renewed? What is the length or period of the contract? Who is the contract manufacturing supplier? Different contract manufacturers have different cost structures, lines of credit, or motivations for signing a contract with you. Have you worked with this manufacturing supplier before?
For more on contract manufacturing contracts agreements, and the various types of outsourcing manufacturing service providers, like the difference between CEM, EMS, ODM, design houses…plus, various examples of actual manufacturing contract service agreements, view the list here.
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