Menu


Electronics distributors lose control as pressure to innovate increases

By Mark Zetter

The electronics distribution model is in disarray. Industry leaders are positioning to find secure footing and focus continues to shift for some as control of the electronics supply chain is changing. The dominant business model remains to be seen.

From our perspective combined with discussions with distribution insiders it appears electronics distributor Avnet is seeing retraction in penetration despite recent financial reporting; Arrow is seeing moderate (single digit) increases, Mouser and Digi-Key both are experiencing double-digit growth and so is TTI.

 

SEE ALSO
Why distribution is ripe for disruption
OEM RFP best practices for contract electronics services
Understanding the quote process for PCB assembly services
Tips how contract electronics quotes can help OEM program materials costs

 

Premier Farnell (acquired by Avnet) is becoming an anchor for Avnet, having still not figured out what to do with Premier and as one insider says, “Premier is pulling Avnet deeper into the pool.”

Allied Electronics, a leading distributor of industrial automation and control products, electronic components and electromechanical components, is showing double-digit, strong growth. The same with Master Electronics.

Then there’s Samtec, a leader in the electronics interconnects industry and manufacturer of connectors, cables, optics and RF systems with channel systems support from IC to PCB and beyond and, TE Connectivity, which designs and manufactures connectivity and sensor products for harsh environments in industries like automotive and industrial are also seeing healthy growth selling directly to OEMs, and doing so quickly with innovative platforms and transaction execution.

None of this is surprising given the growth VentureOutsource.com is seeing in the number of electronics OEM inquiries for contract electronics solutions in the industrial, robotics and automation markets.

Add to this there is continued consolidation and related activity such as distributor America II Electronics being acquired by private equity Wynnchurch Capital.

 

Find electronics design services
Go

In your search results you can further target other Industries and/or Services plus, you can add more geographies to your search.

 

Furthermore, non-competing, non-OEM components manufacturers like Texas Instruments are partnering up leaving distributors with near zero influence on the supply chain compared to years ago.

Distributors moving boxes

Not to be left out of the conversation, Amazon has thrown their hat into the ring helping push inventory for distrubutors like Future Electronics, currently with no less than 40,000 SKUs. Looking at Amazon’s history of disrupting industries know this is only the beginning of Amazon-distributor partnerships as distributors scramble to compete and gain a wider audience of buyers and replace buyers they are losing to more innovative distrubtion competitors. Electronics distributors are being reduced to buildings moving boxes driven by the fast and free mentality of buyers.

 

READ THIS
CPO strategy with AVL segmentation for better supply chain management
5 steps for better electronics supply chain AVLs
How to OEM request BOM quotes (RFQ) for EMS manufacturing
Why pricing for contract electronics services is not standardized

 

Buyers want ‘click-to-cart-to-door’ and they want it now. Most electronics distributors cannot get it out fast enough and nearly all electronics distributors have been slow to adapt.

This page is available to logged in electronics OEM users only. Please Register or Log In.





Private message OEM peers. Access all content.

For electronic OEM professionals working in OEM companies. Connect with OEM peers and access exclusive content.

View 2 comment

Comments

Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

TIP: Anyone can post article comments whether or not you are registered. But, if you register or log in you can attribute your posts to your user profile in GlobalNet Community.

Your email address will not be published. Required fields are marked *


*


*

https://www.ventureoutsource.com/contract-manufacturing/electronics-distributors-lose-control-as-pressure-to-innovate-increases/

Provider spotlight

About VentureOutsource.com

VentureOutsource.com is the leading online destination helping electronics OEM decision makers make more informed decisions and reduce risk. We offer educational Webinars, thousands of original articles and helpful tools, a community of influencers who understand the challenges facing your company today, and a comprehensive directory of electronics provider services.



Copyright Venture Outsource, LLC. All Rights Reserved
The material on this site is for informational purposes only and is not a substitute for legal, financial or professional advice. Distribution and use of this material are governed by our User Terms Agreement and by copyright law. By using our Website you agree to site Terms and Privacy policies. For questions please contact VentureOutsource.com at 1-888-860-1193 or visit www.ventureoutsource.com