Advancing technology has disrupted many businesses and industries. Not surprisingly, this includes the world of electronic components themselves. Advancing technology has made great changes to electronic component procurement, altering how we obtain parts, where we get them from, and increasing some risks, such as those posed by the proliferation of counterfeit parts.
The electronic components industry has transitioned to a more Internet-centric sales model. The change began with a transition from print catalogs to CD-ROM catalogs in the 90s and gradually moved to e-commerce sites where consumers of electronic components can buy parts online. The change has brought many benefits to purchasing departments, such as the opportunity to buy components from distributors all over the globe, lower prices caused by global competition, easy opportunities to research and compare products, and 24/7 purchasing. The rise of e-commerce in electronic component sales has also led to the proliferation of counterfeit electronics, plaguing buyers with substandard parts.
Despite concerns about product quality, e-commerce for electronic component procurement isn’t going away. According to industry experts, about 50 to 75 percent of new business and almost half of all sales of electronic components are occurring via e-commerce platforms, and the trend is expected to accelerate.
Changing Expectations
While the rise of e-commerce has greatly expanded sales opportunities and customer bases for electronics component distributors, it has also increased the expectations and requirements that professional buyers have of their electronics part suppliers.
One major hurdle distributors have had to overcome is compliance with regulations in different markets worldwide. Various countries that distributors do business in have differing regulations, and distributors often struggle to keep up with the rules in each of the countries where they are doing business. To do business on a global scale, distributors of electronic components need to keep abreast of regulatory schemes in each country where they are doing business and ensure that their products and practices comply with these rules.
Electronic component procurement professionals are also demanding greater sharing of information by distributors. Distributors who can provide accurate, reliable and complete information about the source of their components and other pertinent details enjoy an advantage over companies that cannot. Smart distributors are meeting this demand by creating accessible web sites that provide information centers about their products.
The Rise of 24/7 Support
Thanks to online commerce, parts distributors can make sales at any time of the day via their websites. This also means that consumers expect 24/7 customer support, necessitating a change in how distributors run their customer support operation. Distributors that can provide 24/7 support in the local language of their customers gain a significant advantage over those that do not.
Good support services are particularly important with regard to purchase of obsolete or EOL parts. Consumers of these parts need technical assistance finding the appropriate parts and reassurance that the parts they are purchasing are legitimate and not counterfeits.
One company that is doing well in handling product support for obsolete and EOL parts is Procure International. Procure International has implemented a top-flight customer service operation and also used specialized warehousing and processing controls to ensure it only sells legitimate components. Flexibility is a key advantage of doing business with Procure International, as the company gives consumers plenty of leeway with regard to order sizes, allowing them to order only the parts they need. Procure International also takes a global approach to sourcing parts by dealing with legitimate manufacturers all over the world.
Proliferation of Counterfeit Parts
As purchasing parts online has gained popularity, buyers have enjoyed a broader pool of suppliers. Unfortunately, this broader pool also includes purveyors of counterfeit parts. The Bureau of Industry and Security of the U.S. Department of Commerce estimates that one in 10 electronic components is a counterfeit. According to the department, bogus parts are a $100 million problem.
Not only do they rob legitimate companies of sales, they can also hurt those companies’ reputations if the counterfeit parts fail – which they frequently do. Counterfeit parts also can damage the reputation of the companies that purchase them; if the counterfeit parts cause those companies’ products to fail, consumers will be unhappy with those companies.
Online sales have made it very easy for bogus corporations to set up sales sites purporting to sell legitimate electronic components. Employees in charge of electronic component procurement can often be taken in by these very professional-looking sites and end up buying subpar, counterfeit parts. Bogus parts makers typically make their wares by scrounging disposal sites for discarded components, refurbishing and rebranding them, or by reverse-engineering parts.
Legitimate sales sites are beginning to find ways to use the Internet to curtail the proliferation of bogus electronic components. Distributors are offering better ways for consumers to trace parts and have also developed methods of tracking and halting the sale of counterfeit parts. Legitimate distributors are also encouraging customers to check their credentials to ensure that they are dealing with a genuine source of electronic parts.
Last Word
Changes in electronic parts distribution brought about by the rise of e-commerce have created opportunities and challenges alike for distributors and consumers of components. Online sales have broadened the market, giving distributors the opportunity to market their product to consumers all over the globe and providing consumers with the opportunity to source products from a more competitive marketplace. The problems posed by the proliferation of counterfeit components is very real, but increased efforts to give electronic component procurement professionals the chance to check the legitimacy of the distributors they’re dealing with and to research the background of individual parts will help to curtail this problem.
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Sources:
http://www.ihs.com/info/sc/a/combating-counterfeits/index.aspx
http://info.componentsdirect.com/blog/distribution-support-in-the-digital-world
http://info.componentsdirect.com/blog/the-e-changing-face-of-electronic-component-distribution
