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America II Moves Toward ‘Blended’ Distribution

One of the industry's largest independent distributors has announced it is moving toward a “blended” model, selling both authorized and non-authorized product lines.

America II Electronics Inc. says it is seeking more of a balance in selling both franchised and nonfranchised semiconductor and passive components. Independent distributors typically source parts from OEMs and other distributors. Authorized distributors source directly from suppliers. America II says it now buys directly from nearly 400 component makers.

Independent distribution has historically been viewed with skepticism by the electronics industry because of its sourcing practices. Sourcing components from OEMs and EMS providers increases the risk of picking up counterfeit parts the OEM or EMS has unwittingly purchased. In other cases, fly-by-night distributors will set themselves up strictly to market in counterfeit goods. Buying from sources other than suppliers is seen as a risky practice overall in the supply chain.

In recent years, however, such independents as America II have been increasing their diligence in inspecting for counterfeits and have secured direct ties with suppliers. “Over the past year, America II has been evolving,” said Dan Bisaillon, America II chief operating officer, in the company’s press release:

    We’re creating a completely unique experience for our customers by blending traits from the independent space with those from franchise distribution. We still have a team of commodity specialists who source the globe for components daily. But now, we also buy direct from almost 400 manufacturers. We’re truly combining the best of both worlds to effectively serve our worldwide customers.

“We call it the evolution of distribution,” Bisaillon added:

    We’re adapting to the needs of our customers. We still do all the things that made us a successful independent distributor, such as offering asset recovery through excess purchasing programs and supply chain management services. But we’re also buying direct from manufacturers and continuing to sign authorized distribution agreements. We’re finding the right balance between independent and franchise distribution to meet the needs of our customers.

America II stocks nearly 4 billion components. It also employs global component engineers and a 57-person team of quality control inspectors.

15 comments on “America II Moves Toward ‘Blended’ Distribution

  1. screenwriter
    June 6, 2012

    If the America II model worked so well, why would they become a hybrid? So, on the independent side they will gouge customers and ship counterfeit stock and on the ifranchised side, they will seek  normal margins, provide service and ship good stock? Makes no sense.

     

  2. Barbara Jorgensen
    June 6, 2012

    I think the short answer is they don't want to abandon the customers that have relied on the independent model.  In terms of pricing and other concerns: when disk drives were in short supply, prices went up at franchised distributors: this was discussed at length during analysts conference calls.

  3. elctrnx_lyf
    June 6, 2012

    Isn't there lot of distributors out in the market following the same methods? I really didn't get a clear picture of the speciality of America II.

  4. elctrnx_lyf
    June 6, 2012

    Isn't there lot of distributors out in the market following the same methods? I really didn't get a clear picture of the speciality of America II.

  5. Barbara Jorgensen
    June 6, 2012

    The distribution industry is pretty much divided up between franchised (authorized) distributors, which have the suppliers' blessing to sell their products; and independents, that aren't authorized. Independents buy inventory from OEMs and EMS companies and often, other distributors. They sell branded products but suppliers may not honor a warranty sold through an independent.

    The blending of the two is interesting and has a lot of implications, particularly the issue of cost. Open market buys are market-price driven (can spike upward or downward steeply); franchises have price guidelines. A distributor can't undercut price by too much with a franchise.

  6. Daniel
    June 7, 2012

    Barbara, most of the companies have a similar strategy. They have sales of both authorized components at front door and counterfeit at back doors. When we are looking for a component or device, they will show all the authorized items and finally some counterfeit items at a lesser price. That’s a business strategy, where most of the peoples are compromising for quality at a lower price.

  7. owen
    June 7, 2012

    Jacob, “authorized” v. “counterfeit”, may be a bit harsh. There are certainly many “non-authorized” independants that buy from OEM's, EMS, and other distributors that are ligit. I do agree though that there are higher risks which could be mediated through more rigorous QC, or perhaps a more reliable identification proceedure to verify a components provenance. There's nothing wrong with a lower price if it's the genuine article.

  8. DarkAngel
    June 7, 2012

    They're kind of late in the game, however it opens up a can of worms Barbara as to why you'd endorse a single broker, such as America II, which is a contradiction if you ask me to franchise distribution when Avnet has for years had an exclusive interest in America II as their inventory turns partner for slow and non-moving inventory.

    Personally- as Arrow acquired Converge in May of 2008 (Another contradiction), haven't seen stories about this or their “Blended distribution model.” So the question lies herein, how much is Avnet and or America II paying you on the side to endorse their business model?

  9. owen
    June 7, 2012

    DarkAngel, You're an ass. “So the question lies herein”, how much of your drivel must we endure?

  10. Barbara Jorgensen
    June 7, 2012

    hmmm…I re-read my article and faied to see how anyone could misinterpret a straight recitation of facts as an endorsement. As to the franchised distrbutors, do a search of our site for the names Arrow and Avnet and I think you will find far more mention of these companies than America II or other independents. EBN takes its cues from its readers and buyers, and this channel accounts for a significant portion of business. It would be a far worse thing to ignore that fact that these distributors exist.

  11. DarkAngel
    June 7, 2012

    Owen, it's nice to be able to speak in a public forum and be referred to as an “Ass.” As trite as it may seem, there are some that find (including component OEM's) a conflict to endorse brokers. I'm certain you could possibly be a nice guy however when you start swinging your manhood around in public, you kind sir – become the ass. Thank you however for your assessment, have a great weekend!

  12. bolaji ojo
    June 8, 2012

    Dark Angel, Owen, The substance of the discussion the two of you were having is very important to the future of the electronics industry. The dynamics and interplay in distribution and the impact of counterfeiting on electronics manufacturers' integrity make this a compelling subject and I appreciate the contributions. I would like us to keep it civil, please. We'll disagree, sometime strongly but we'll still respect each other's opinion and mental space.

    I was looking forward to hearing more from the two of you and I hope you won't hold back from expressing your opinions. The readership and your colleagues are benefitting from your experience and insight. Just retract the claws, please. 🙂

  13. owen
    June 8, 2012

    Bolajl, The substance of my reply was entirely based upon the scurrilous accusations of bribery against Barbara. I do understand your concern and will bite my tongue should it happen again. 

  14. Barbara Jorgensen
    June 8, 2012

    Thanks Owen, and we appreciate both your understanding and participation on our site/

  15. DarkAngel
    June 8, 2012

    Good morning Bolaji,

    Thank you for mitigating this minor skurmish. I agree that the opinions expressed are whole heartedly the opinions of the readers and not subject to scrutiny by any one individual who may take a comment out of context.

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