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Google Is Electronics Supply Chain’s New Kid on the Block

Less than a year after Amazon shook up things in the business-to-business supply chain, here comes Google. The search giant has launched a beta version of Google Shopping for Suppliers, which right now is focused on the electrical and electronics industries.

Amazon Supply, which serves a host of different industries, now features more than 600,000 parts in areas such as industrial and test equipment. As Bolaji Ojo put it in a post last year when that venue was unveiled:

If you supply products to the electronics industry, the archrival you should be concerned about may no longer be the company you've competed against for decades. It's Amazon.

Why do we care that Google, which rarely treads softly, has also entered the fray? Forrester Research estimates the B2B e-commerce market at nearly $560 billion. By comparison, the worldwide semiconductor industry is worth nearly $300 billion, of which distribution accounts for about $75 billion, and a fraction of that rolls through e-commerce.

Google's approach is typically easy to use. When you're on Google Shopping for Suppliers, you can punch in a search for, say, “FPGA.” It returns a range of results, most not specifically about programmable logic devices but involving packages, DSPs, and other components that work with or in FPGA environments. Google-certified suppliers show up at the top in the paid results slot. In this case, that means US Digital (featuring a microstepping motor driver). Google has certified suppliers in the United States, China, and Germany.

Different approaches
The results are raw right now, but you should remember that this is beta. You can see where this story is headed.

Now, understand that the Google model — a search-centric one connecting searchers and sellers — is different from Amazon's (buy parts through Amazon). But Google's entry into the B2B e-commerce space is another disruptive milepost.

I know distribution executives are of two minds. Some sleep fitfully thinking about the Amazon/Google potential for encroachment. Others sleep like babies, knowing Amazon and Google would have to radically change their models to go head to head with electronics distributors. That said, there's near-term leverage potential for suppliers negotiating with distributors. In an EBN reader poll last year, more than 41 percent of respondents said they would buy or had already bought parts through the Amazon service. The interest is keen.

So, you're a semiconductor supplier. Are you hot to trot for this? Hot to cut out the distribution middle man? If you're in procurement, do you see the rise of Amazon and Google services such as these as a powerful potential cost saver?

What are your thoughts?

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15 comments on “Google Is Electronics Supply Chain’s New Kid on the Block

  1. Wale Bakare
    March 9, 2013

    >> do you see the rise of Amazon and Google services such as these as a powerful potential cost saver?<<

    Google coming to supply chain a big plus to the sector – is a popular internet giant worldwide be it in developing or developed world, the way its impacting on people can hardly be quantified. Meanwhile, its tentacles now spreading to e-commerce for me a big game changer. As we have been witnessing Google Android OS's disruption very much in progress, same could be predicted in supply chain – highly probable. What do you think?  Its searching tool remains the only slogan in the world and i believe it would make a great and postive impact to supply chain. Nevertheless, both Google and Amazon are the real things.

  2. Brian Fuller
    March 9, 2013

    Wale, good points here… ultimately I think Amazon is no threat to the classic electronics distribution model, at least for the vast majority in designs. It may find a find-and-fulfill role in consumer electronics to a certain degree because of the high volumes there, but to become a replacement for a traditional distributor or a rep is a non-starter. There's no way they'd invest in the required support infrastructure to chase a small market. 

    That e-commerce number $559 billion is nearly twice the entire worldwide semiconductor market. Much more attractive.

     

     

  3. SunitaT
    March 9, 2013

    The results are raw right now, but you should remember that this is beta.

    @Brian, thanks for the post. I am curious to know when will Google release the final version of this product ? And does Google verifies the products before giving them Google certification ?

  4. SunitaT
    March 9, 2013

    Forrester Research estimates the B2B e-commerce market at  nearly $560 billion

    Its also important to remember that in the next three years mobile commerce will constitute more than 25 percent of the total traffic in e-commerce. Hence companies should also provide mobile tools so that it can help end users to do e-commerce using their mobiles.


  5. SunitaT
    March 9, 2013

    Its searching tool remains the only slogan in the world and i believe it would make a great and postive impact to supply chain.

    @Wale, good point. But I think this will crete lot of monopoly because the outcome of the google search will give higher priority to google certified suppliers which may not be the criteria end user is looking for. Since google is the most search seach engine, I expect the results to be unbiased. 

  6. Brian Fuller
    March 10, 2013

    @tirlapur, thanks for your comment. They launched this in January and with most web offerings it'll be “beta” for a while.

    Google has a process for supplier certification, but this I need to explore more. Unsure what the criteria are.

     

  7. Wale Bakare
    March 10, 2013

    @tirlapur, you are right. The interesting thing – mobile e-commerce trend is not actually tilting to one side of the world as we have had in other technologies in the past. Also, the developing world is indeed ahead in mobile e-commerce as of today, thanks to liberalisation of telecommunication sector. But mobile tools are quite available may be other defficient areas. And what tools do you think companies need providing?

  8. Burnsy
    March 11, 2013

    We are one of the beta companies in Google's Supplier program.  The registration fee is to verify that you are who you say you are.

  9. Brian Fuller
    March 11, 2013

    @Burnsy, thanks for this! Can you tell us why your company decided to join the program, what you've learned so far and whether you'd recommend it to peers in this community?

     

  10. t.alex
    March 11, 2013

    When it comes to good search result, we tend to think that Google will do a good job.

    However, at the moment I tried the Advanced search, only 3 countries can be selected: USA, CHina and Germany. Probably  they should have more options like showing results nearby, or sorting by price. 

     

     

  11. Daniel
    March 12, 2013

    Brain, it seems that most of the corporate companies are trying to sell directly to customers without any third party interventions. Such direct selling offers may helpful to companies for selling the items with a better price and easiness. From customer point of view, they can have the quality product at a discounted price.

  12. Daniel
    March 12, 2013

    Alex, it seems that as of now they are listing the products available with US and neighbor hood countries. Once, if found success , hopefully they will expand the wings to addressing various local markets across the globe.

  13. t.alex
    March 12, 2013

    Jacob, 

    And of course from the viewpoint of purchasing managers, they would like also to search with detailed spec. For example, they can specify like mechanical spec, electrical spec, etc.

  14. Burnsy
    March 12, 2013

    Hey Brian, most leads from our website come from Google, so in that sense it seemed like a good fit.  We promote our company through a few different hosts, and track each month who comes in, and where do they come from.  This one is too new to tell.  We have only been with them a short time, and so far no leads have come from them.  I am curious to see what leads will come from them, and what kinds of leads, and if it will improve our search engine rankings with Google as well.

  15. Daniel
    March 14, 2013

    “And of course from the viewpoint of purchasing managers, they would like also to search with detailed spec. For example, they can specify like mechanical spec, electrical spec, etc.”

    Alex, I think later they will include advance searches with various fine parameters. As of now they are providing only simple search options.

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