Smaller component suppliers sometimes have a hard time getting the personal attention of big distributors. If you are number 47 on the list of DC-DC converter suppliers, your product might not be mentioned by a distributor's applications engineer. If yours is not a household name, a salesperson is likely to steer a customer toward a more familiar product. In both cases, the customer might not end up with the best solution.
The specialty distribution model can be a win-win for both suppliers and customers for a number of reasons...
Specialized distributors focus on you (and your customer):
So how do we break the cycle of the tail (distributor) wagging the dog (customer)? Enter the world of franchized niche distributors. Niche distributors carry a limited number of lines that are highly complementary. Customer focus likewise is narrow. If your product line is specialized, your product matches with the target industry's, and it requires above-average design-in support, chances are a smaller distributor might be worth signing on.
What you can expect:
Suppliers get more leverage with their product group if there's just a handful of lines available. Because a niche distributor's line card is narrowly focused, the distributor can better collaborate with manufacturer's reps. A focused distributor has the time to learn about your products in depth rather than just grasp a few key features. Each product can be handled as a "marquee" line. Finally, because of the high level of technical involvement up front, you can expect motivated after-sales support.
How to spot a good specialized distributor:
Does it have the industry experience, the technical know-how, a synergistic alignment, and customer focus to succeed as your partner? In addition, make sure best industry practices are being followed. Ask how many relevant customer contacts are in its database to which your message is being broadcast. Inquire and review its marketing plans and consider entering into a co-op marketing agreement.
A niche distributor can give both suppliers and customers a lot of "face time." Let us know if the model works for you.
True but in an ideal situation, you want to minimize the time to figure out that the relationship is not going to work out. This way, you can cut tie and move on, saving headaches and $$$.
That is part of what I meant. That takes time when you are first getting started. You hope you strike gold the first time around but this rarely happens. SO you must hope to fail fast and learn from the experience to get back on your feet quickly.
Taimoor, thank you for your comments in your post. Yes, we think there is a large contingent of customers in need of specialized suppliers to get the pre- and after sales support to successfully design-in a product. For example, a Bluetooth module from connectBlue connecting to an Iphone requires more support than a big-box distributor typically can give you.
I agree, from a manufacturing point of view going to just one large distributor is best, however, many new designs projects need one or two specialized solutions you won't find except with a niche distributor. Our next guest blog will focus on customer benefits utilizing a specialized distributor. So stay tuned.
A reputable niche distributor is a good find. Often it's worth keeping these sources in play by favoring their product line and using them as alternate sources if possible. The costs of researching and qualifying such a distributor should be factored into the total costs of sourcing their parts.
"Ask how many relevant customer contacts are in its database to which your message is being broadcast. "
That is a good evaluation metric, but that doesn't guarantee that your products will be ranked higher on his list. You might also ask how many other similar products he has in his database.
"it may take time to find the right distribution partners"
You may not have the right option that works for you the first time you want to buy a product. But you can get it right when you are more accustomed to the market.
you have sighted a practical example of the importance of specialized distributors, but to me that does not seem like a situation that will occur in most designs, or for majority of components in a design. A few components may require special attention due to their significance, and very precise requirements, for those, specialized distributors may help.
I didn't necessarily mean to specialize. I meant it may take time to find the right distribution partners, with their processes aligning with your own. This will be the optimal scenario.
Interesting post, Peter. It does seem that it's a good option for small suppliers to get in touch with specialized distributors. However, from the customer's perspective, do they prefer dealing with specialized small distributors? Wouldn't it be more convenient for a manufacturing concern to deal with a single large distributor for all their needs?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
To save this item to your list of favorite EBN content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This