Electronics Update Distribution Outlook

Electronics Update

Your daily news room for the electronics industry

Distribution

Electronics Distribution News


The distribution business is an essential part of the electronics industry.

Distribution companies are often organized in various national and international distribution associations, such as IDEA. Distributors of electronic components are often used as an intermediary between the manufacturer of electronic components and the customer. This could be the case, if the customer’s order volume is too small to be handled by the manufacturer. But there are also other reasons.

In addition to component shipments, distributors often offer value added services, such as assistance in the customer’s design phase, or logistic services.

The service portfolio depends on the distributor’s strategic direction. There are distributors that concentrate on simple fulfillment. They buy components from the manufacturer in bulk and concentrate on re-selling. Others put their focus on value added services. These can be special design tools or design assistance through the distributor’s engineering staff. 

However, distributors can also be distinguished by their product portfolio. Companies that offer a big variety of components are often called “broadline distributors”. But this type of business model is not suitable for all market participants. Some have specialized on specific niche products. For example, there are distribution companies that focus specifically on electromechanic components. Since these are often smaller companies, it’s an often more suitable concept, than trying to compete against bigger distributors.

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