ODM stands for Original Design manufacturer, which means that the factory makes products that the buyer designs but based loosely on existing products. Known also as Private Label and also called White Label, ODM is the practice of buying already made products and simply adding a logo or colors to the product. This is a very common practice for many eCommerce sellers and is one of the easiest ways to start in retail.
When the buyer works with the factory, the buyer is purchasing items that the factory is already making. The only thing the buyer is expected to design or own is packaging and branding. In some cases, the buyer won’t even change the branding or packaging and just sell it as the factory provides, in other cases, the buyer may request minor cosmetic changes such as color, and additions of logos.
There is a gray area between OEM and ODM based on how much customizations you do, but to keep it simple ODM is simply preaching an existing product. The biggest issue with ODM involves intellectual property and who owns the product design even with customization. For the most part since the factory did all or almost all of the design, then they own the IP while the buyer owns the copyrights to the branding.