Typically the component that is purchased as an OEM product lacks all retail packaging. There may be no or reduced instructions included with the OEM version of the product.

Since price is such a huge factor in the purchase of product by consumers, OEM products offer a major advantage over a retail product. The reduced items and packaging can drastically reduce the cost of software over a retail version. This leads to the question as to why anyone would chose to purchase the retail version.

The biggest difference between a retail and OEM product is how warranties are handled. Most retail products come with very well defined terms for service and support in case the product has any problems. OEM products on the other hand will generally have shorter warranties and limited support. The reason is that the OEM software is supposed to be sold as part of a package, usually with hardware via a retailer. Therefore, all service and support for the component in the system should be handled by the retailer if sold in a complete system.

OEM software is identical to the full retail versions of the software but it lacks any packaging. Typically this will be seen with software items such as operating systems and office suites.

OEM software typically is sold bundled with a piece of computer hardware. Some retailers will allow the purchase of the software if it is also purchased with some form of core computer system hardware.

When shopping for computer software, sometimes it may not be obvious if the item is an OEM or a retail version. Most reputable retailers will list the product as either “OEM”. Other items to look for would be in the product description. Items such as “Retail” and “Boxed Version” can provide clues as to whether it is an OEM version or Retail boxed version of the software.

The biggest problem comes with the various pricing engines on the web. If a manufacturer uses the same product designation for an OEM and retail product, it is possible that retailers on the results page could be offering either version. Some pricing engines will list “OEM” next to the price, but others may not. Always read the product description if you are not sure.

There should be no physical difference in a component if it is sold as OEM or in retail. If you are comfortable with the terms of the OEM product compared to the retail version, then it is generally better to buy the OEM product for the reduced cost. If items such as product warranties bother you, purchase the retail versions for the peace of mind they provide.