Although all electronics distributors have systems that track the buying patterns of their customers, catalogue distributors up the ante when it comes to purchasing analytics. Catalogues, which specialize in low-volume engineering orders, often are a launching pad for component makers' new products. Suppliers want to know which parts are taking off, who is buying them, where the orders originate, and in which applications their devices are being used.
As a result, catalogues are prime indicators of buying trends. Mouser Electronics Inc. is among the US-based channel players that have noticed something is changing in Asia: Buyers are increasingly seeking out secure sources of supply and are avoiding sites that pop up on the Internet advertising "this week's special."
"We are picking up activity on our site from customers that wouldn't have known us a year ago," Hayne Shumate, vice president of Internet Business at Mouser, told me. "This indicates to us that buyers don't care where a device comes from -- whether it is shipped from the other side of the world. After they get what they are looking for, they keep coming back."
The distribution market in Asia is made up of a few large global players, numerous local and regional players, and a plethora of small firms called "traders." Some of these companies sell parts with the authorization of their suppliers; many don't. Asia has been a tough market for foreign distributors because customers prefer to source locally and buy based on relationships rather than established service levels.
The trend Mouser sees is beginning to dispel that notion. "In the US, if a new site pops up, customers can figure out pretty quickly whether the site is legitimate or not," notes Shumate. The US distribution industry has existed since the 1940s, has fought against fly-by-night resellers for decades, and has a supply base that helps defend authorized relationships. The electronics market in Asia has grown so quickly that anyone with a PC and Internet service can sell components. The fact that customers keep retuning to Mouser's site indicates buyers are looking for more than the cheapest price -- they are also looking for consistency.
"A lot of customers tell us about issues they have had [with traders] or things that have gone wrong," says Shumate.
Lindsley Ruth, executive vice president, Office of the President, for global distributor Future Electronics , told me: "Buyers aren't getting in trouble for paying a few cents more for a component. They get in trouble when a manufacturing line is down because a crucial part isn't there when it is needed."
Traders often buy products online in addition to selling them, so legitimacy concerns work both ways. During the dotcom boom in particular, bogus companies would set up a Website, establish a line of credit, order parts from distributors, and then disappear after delivery. "How do we know our customers are legit?" asks Shumate: "We talk to them."
Both Future and Mouser -- as well as most foreign distributors that do business in Asia -- have established local sales and support offices in Asia. "There are a lot of pretenders in [the electronics distribution] space," notes Ruth. "Everyone has to be careful about where they are sourcing."
"The stand-up companies are easy to identify, and folks that are doing things the right way are winning," says Shumate.