Amazon must have delighted many of its customers. The general feeling from what I have heard about the company so far seems to be that those who have had any transactions with it online have been happy with their purchase. That's a record it can build upon in the materials and supply chain business.
I agree. The experience I have had with Amazon and their current products has been positive. I would have no issue with buying electronic components from them. It is possible that they could take over a large portion of the distributor marketplace if they have a good selection of components and good delivery and pricing.
I can see how smallers companies and individuals will start using Amazon, simply because they weren't getting any special discount from the manufacturers (because of volume). Now Amazon helping them get lower costs (probably).
How will this impact the traditional manufacturers?
Most Small Companies/Consumers trust Amazon a lot to always offer the Lowest Prices on any products they Sell.This is why you will see a lot of initial Traction and excitement about this Decision by Amazon.
After all they have as good an Infrastructure as anybody else in the world;which makes them odds on favorite for most Consumers.
But I want some Guarantees in place too.
Without Proper Guarantees(On Product Quality and Returns policy);I would hesistate to move all my Electronics purchases to Amazon immediately.
The cost savings(+/- 5%) compared to my Traditional Supplier are not enough for me to justify moving all my purchases to Amazon.
I have a good relationship going with my Traditional Supplier(more than 5 years of trouble-free service,not just that they go out of their way to find a part which may/may not be in current production)-
Will Amazon do something like this? Unlikely Today.
My feeling is that once they gain more traction with Suppliers/Manufacturers they will be able to drive down prices further.
The cost savings(+/- 5%) compared to my Traditional Supplier are not enough for me to justify moving all my purchases to Amazon.
@tech4people, true. I agree with you. +/- 5% is not much. I was expecting more steeper discounts from Amazon atleast till they get good-regular customer base. Are there any other advnatages of buying from Amazon over buying it from Traditional Supplier?
In the case of most Electronic Suppliers(&Components);Margins are as it is very-very slim[Maximum 10%-20%];So there is a limit how much in Cost Savings Amazon can offer Customers[At the end of the day They are not going to offer Products at a Loss to themselves].
Frankly as things stand today;I don't know what Advantages they can offer which I can't get from my Traditional Suppliers.
Yes,if They did manage to get Technical Expertise on the website to help me better decide which parts are best for my product;I might re-consider them again in the future.
Right now,I feel like I am just wasting my time on it .
Regards
Ashish.
P.S
Amazon's Basic Advantage was most apparent in the 1990s and 2000s especially against Brick and Mortar Establishments primarily because of the Disintermediation they offered by bypassing The MiddleMen and linking consumers directly with Sellers.
The world however is very-very different today as most of these Suppliers have already learnt from the experience of Amazon and already locked up the best deals with Manufacturers and cut down Costs through of the Internet.
I have a very strong relationship with my Supplier and I just not get the right parts but also get excellent Technical Knowledge(in case things are not going right on my existing product).
Amazon has to work very,very hard to re-create this ecosystem (and entice me to switch to them).
That's true, but they start off the conversation offering lower prices, which is always good. I'm sure they can manage to get some sort of support system.
Don't underestimate the role of Community Networks(especially in the Technology Support space).
I doubt we will see a situation where most/any of the Existing suppliers agree to pool their resources together or with Amazon-It will be basically what's known as "Sleeping with The Enemy".
Everybody knows how Amazon enters new Verticals and ends up obliterating the competition based entirely of the premise of lower prices.
The resistance will be quite strong(In my opinion).
And without the Support and Community;Amazon will struggle to match Existing Suppliers.
Well, if the entire community agrees to that, its fine. But I'm sure there's at least one supplier that wants to do better so it might go with Amazon. Maybe hurting his long-term chances but making profits in the short-term.
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.
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