I totally agree with contacting the niche distributors if you want the right technical details and a shortlisted product range which are available to you before you trigger a purchasing decision. This can help you make a precise decision. Also reasonable after sales support can be expected as the distributor knows that the customer is here at his doorstep because he needs the specialized technical support which distributors with a diverse line of products cannot deliver due to the impossibility of doing so due to the nature of their business.
Yes, you need to develope partnership with organization with similar needs. If big distributor does not give due importance, there is no point in working with them. Specialized distributor can give much better result.
I just started to understand the challenges in finding the right distributor partner for a supplier. Finding niche distributor who has a special line card with very good customer list is always a difficult thing considering the fact that many of the big oem's doesn't work with smaller distributors in general.
A large part of that process is trial and error. It may be painful in the beginning but when you find the rigth partners, you may be able to recoup the initial losses quickly.
Specializing a distributor or the distribution process is a good thing but don't you think it will complicate things for the supplier / retailer ? Process will not be streamlined
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.
"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.
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.
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 $$$.
Yes Phil but you always cannot focus o try to put the cost down becasue we have to remember that budgeting do play a major role and we need a adequate budget to suppot the sevices not a limited budget
I'm no saying to focus on keeping costs low. What I should have said is keeping waste low (which should always be a priority). If you can get rid of the processes, people, etc that waste your time/money/resources, the operations will be a lot more efficient.
Well Phil do you really think processes and people are a wastage for a company ? How do you operate or run a decision to make it operate via the system if you eliminate the human resources ? I dont get it at all
1. If you have a process that involves two people physically having to interact in order to move to the next stage in the process, if it can be automated, automate it! This will remove wasted time & manhours from the process
2. If you have an employee that feels the need to chit chat & get coffee every hour instead of working tasks through to completion, you can ask them to stop this behavior or they will face some type of disciplinary actions. This will also remove wasted resources from operations
Well you are right phil but mostly you are reffering to attitudes and working capabilities of the employees. I was reffering to real workers who has the knowledge and the dedication to get the business running. So if you remove them as well then its a crime.
No no no. That's not what I meant at all. I was referring strictly to removing/replacing wasteful resources (not their positions completely). Just the people/processes that disrupt efficient productivity.
Yes that is a possibility and I guess many are trying it too. What i feel is other than firing people if we can re-analyze the budget and do a re-costing then things might be ok. I oly assuming this might not sound practical though.
I have found that some of the ditributors are a bit more like manufacturers reps, and there is a problem that I find with that. If the product is the best solution it works well, but the other side is that "when all that you sell is hammers, everybody's applications all look like nails". When I am in the searching stage and collecting information is not the time when I need sales calling me, when I was just checking to see if the product might be what I was looking for.
Of course, presently I am having problems with a specialized distributor who will not quote a price, even though I explained that when I get the price I will place the order the next day. I know that they have the product that I need and that the price is OK, so please sell to me but.... And I was willing to pay at the time of order, which is a zero risk deal for the seller.
WilliamK: That sounds curious to me as well. What a pain in the neck. Whether or not this company is a niche distributor or not, that's just bad business practice for any kind of business. Especially when you call. I see why companies might not publish prices online but they should certainly quote you by phone.
I've never used a specialized distributor, and i'm not sure i even know of any, and right, now i'm I don't see how it will make things easier for an OEM, especially one that is not very large having to go to multiple distributors to get products.
Well, those specialized distributors probably come with a higher price. As some point, the engineers need to establish the minimum requirements but also, when too good is bad (based on costs). Efficiency comes with buying what's good enough.
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.
Although niche distributors tend to focus on high-end products, they don't necessarily determine the price of the product. That's up to the supplier. The specilaty model most often gravitates toward premium components becuase you really need something like that to compete against volume distributors. Being on a niche line card also helps suppliers. Let's say you have a pricey line: when someone quotes you on a BOM, you'll fail by comparison to less expensive lines on a broad line card. On a niche linecard, where everything might be pricier, it doesn't look quite as bad.
What the niche distributor can often provide is much more product expertise. One example is in specialty connectros used with a nonstandard cable. These were a bit more than the standard MS connectors, but the ones that I needed had to be smaller and more rugged, and had to work with a cable that had much larger conductors than would normally be used with that sized connector, since the conductors had to be mechanically durable. I was using #20 wire, when normally that connector would be used with #30 or #32 size wire. So the distributor located parts that were not on a standard order sheet, and got me the parts with a good delivery time and a price that was acceptable. I don't think that I could have had that much support from the #1,2,or #3 distributors in the US. Of course, they may challenge me on that, but the specialized distributor just had to go to a different shelf for the stock. That is one example.
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.
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?
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.
"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.
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