Question about sourcing parts - Page 1
Forum section: electronics / beginners

author: derGoldstein
author_rank: Regular Contributor
timestamp: June 05, 2016, 10:41:54 pm
content: I'll occasionally buy electronics on e-bay just to see how they manage to get the price so low for the stated function (I'm guessing most people reading this have done that at least once). Let's assume for this post that the device functions as stated. Often I'll make a quick BOM and see that, if you were to buy the parts in the west, you'd end up with a higher price than the device itself, even if you bought the parts in 100k volumes.From what I've been reading and just from the teardowns I've seen on youtube, the shenzhen market keeps being brought up, and alibaba is often thought of as the online extension of it. My question is (finally) -- do western companies buy components from there as well? I mean a company that actually cares about the quality of its products, not the sort-by-cheapest products on amazon.Just browsing around for common parts on alibaba, I've seen the following parts being sold for as little as a 10th of a cent, or "worse case" 1 cent: LM393, LM1117 (at various voltages), LM358 (and other common op-amps), atmega128, attiny84, tp4056 (and other 1-cell linear chargers), TL494, TL431, and IRF540 (and other power mosfets). To get to 1 cent you usually have to order 1000, and to get lower prices you have to order around 10,000.Being a cynic I've never tried ordering electronic components from alibaba because I assume that I'd be getting, at best, production rejects or barely functioning knock-offs. However, those prices would be the only thing that explains the absurdly low prices of many of the products.Do any of you buy parts like these? Are there any particular categories of components that are actually safe to buy from sellers on alibaba?

author: N3xus
author_rank: Contributor
timestamp: June 06, 2016, 05:31:35 am
content: This was also my opinion. I do not trust sellers on alibaba either. Couple of weeks ago I was looking for a LiIon battery and found a huge amount of different, very cheap, batteries on Alibaba. As these things can get dangerous I did not dare to buy there. I am very interested in the different opinions here.What I can tell you is that wholesalers and distributors like Digi-key, Mouser, RS Components,... are sourcing parts directly from the manufacturers. There is no doubt for me.Gesendet von iPhone mit Tapatalk

author: Blastcap
author_rank: Regular Contributor
timestamp: June 06, 2016, 08:03:21 am
content: I buy small amounts of these parts (10-50 of each), they do feel dodgy and don't have the same mechanical quality as genuine parts. The pins are thinner, the casing has residue/dust on them and markings are sometimes almost unreadable.Electrically they seems to works well, but i'm not pushing them to their limits. If i was to make a production run using lager amounts of common cheap ICs i would rather buy genuine and not risk it. But for small things at home and keeping a little stock i'm fine with them.

author: Mastrofski
author_rank: Contributor
timestamp: June 06, 2016, 01:22:15 pm
content: I once interviewed for a position at an assembly/design house(they actually have a sister company that's fairly high profile for prototyping PCBs). They had a very close working relationship with HP, where something like 30% of their business came from HP and HP kept giving them tips as far as how to lean out their manufacturing process. I was informed that one of the HP tips was to put a person on the ground in Singapore to get better pricing of components, but also better assurance of real parts. I would assume this works the same with Shenzhen.

author: derGoldstein
author_rank: Regular Contributor
timestamp: June 06, 2016, 11:08:26 pm
content: Quote from: Blastcap on June 06, 2016, 08:03:21 amI'll occasionally buy parts from E-bay, to use for very simple, sometimes throw-away tests. What I get is exactly what you're describing -- noticeable mechanical differences. The leads are either thinner or are coated unevenly, and often slightly bent. If there's a tin-coated surface like on TO-220 packages it'll be dull, dirty, and sometimes bumpy. The plastic overmold will sometimes have slipped a bit onto the leads or other conductive surfaces.Thinner leads would almost certainly mean that they were intentionally manufactured cheaply, but the other characteristics could just be a manufacturing glitch, which won't effect the final performance too much.Knocking off a LM7805 fossil is one thing, but an entire MCU? Is it possible that they reverse-engineered it entirely and fabricated their own cheaper versions? If you have those capabilities, wouldn't be more profitable to lease an architecture and start a new brand? I'm just making assumptions here, maybe it is more profitable to manufacture and sell counterfeits, even if what you're copying is very complex...

author: rstofer
author_rank: Super Contributor
timestamp: June 07, 2016, 12:34:07 am
content: I have enough trouble getting my projects to work that I simply don't want to buy on the gray market, regardless of price. Seriously, I'm going to buy ONE ATMega128, not 1000. Why would I even consider going for questionable parts?I used to work at one of the large semiconductor companies. We would take our reject TO-3s and smash them up with a jack hammer (stomper blade) against a steel sheet. we wanted to recover the gold, sure, but we didn't want them out in the world where we would have to replace them. We already knew they were rejects, no point in paying to replace then.For the hobbyist, I don't see the allure of buying gray market components.

author: derGoldstein
author_rank: Regular Contributor
timestamp: June 07, 2016, 08:37:55 am
content: Quote from: rstofer on June 07, 2016, 12:34:07 amI was mainly wondering about what companies typically choose to do, and if there are any particular categories of parts that robust enough that even a non-branded part would do.Inductors come to mind. If the internal insulation is good enough, and they perform as advertised, there isn't too much that can go wrong (I think...). I wouldn't trust a low-quality capacitor to have a long life, but an inductor? They're often the most expensive passive component, especially the large SMT ones.I agree that for a hobbyist it mostly makes sense to get parts from reputable vendors, but even here I can think of exceptions. For example potentiometers -- they're very commonly used in hobby projects, and you can get them much cheaper from e-bay (I don't mean 1000 parts here, more like 50). Same goes for terminal blocks, some types of switches, some types of sockets, and low-current connectors/header (at least the ones that won't often be plugged/unplugged).Also assortment kits. I'm not going to have every value of resistor or capacitor at every SMT size, and you can get 50-value kits pretty cheaply. Even if it's just used to test a circuit until you order branded ones from mouser/digikey. I know they also sell branded kits (like kemet capacitor kits), but they're very expensive by comparison.So yeah, I think there are examples where the cheaper chinese parts would benefit the hobbyist as well.

author: Kjelt
author_rank: Super Contributor
timestamp: June 07, 2016, 09:34:30 am
content: I can only speak for the company I work for and we only buy wholesale with the big companies and deal on price with them directly, and this can be a long process.The only thing we do care about is, for instance, that we want to start production of 2 million pieces in week 44 to 46 and we will have all the components of the BOM in our warehouse in week 43.Missing one part of the BOM means no production and 50 people and equipment are doing nothing , you can calculate how much that costs.Even big supply companies that can not guarantee delivery of the needed amount or can not deliver on time are cut from the preferred suppliers list.It just makes no economical sense for instance to save 10 cents on any part (so $200.000 cost savings) if we have a problem a year later and we have to do a recall and replace all units because some part did not match the specification.On the market you speak off some parts might be good overstock/ production leftovers. On fets for instance if you buy 5 million from a company you pay a totally different price than anything you can see online, it can even be interesting to order 5 million instead of 3 million.If they are never used they get tossed, storage also costs money and the period where you can use them is limited.So where are the big pcb assembly fabs? In China, so where are the big spoils of that production, yep also in China, and where on a spool can you see which is the maximum usage date? Only on the sticker you do not get when your order your parts over there. So the jelly bean parts can be very very cheap and hugely available and would not doubt they are probably genuine, even the Chinese do not bother copying jelly bean parts, there is no money in it.

author: Kjelt
author_rank: Super Contributor
timestamp: June 07, 2016, 12:38:32 pm
content: Quote from: AcHmed99 on June 07, 2016, 12:07:57 pmYes the pins might oxydize, or moisture etc, a lot of semiconductors but also resistors and capacitors therefore have a maximum manufacturing date on the reel, a kind of guarantee that till that date everything is perfectly fine, after that date no guarantees. I even have vacuum sealed microcontrollers that have this date, they were thrown away because the date expired but they are still vacuum sealed so for hobbie use this is never a problem, but for professional use you don't want any problems during manufacturing because some stupid 0402 resistors were out of date

author: Blastcap
author_rank: Regular Contributor
timestamp: June 07, 2016, 12:58:40 pm
content: Regarding company purchasing policies i can only speak of where i work, i am NOT in the purchasing department whatsoever and have no influence on their decisions.But as far as i can tell we source our parts from the usual big distributors, like Farnell, Digikey and Mouser to get genuine parts and avoids other/unknown distributors even if their price is less.Its simply not worth the risk to us, when manufacturing small batches (<200) of custom boards.But even then it doesn't guarantee genuine in-spec parts.On a slightly related note, even the best suppliers mess up.

author: derGoldstein
author_rank: Regular Contributor
timestamp: June 07, 2016, 01:11:00 pm
content: Quote from: Kjelt on June 07, 2016, 09:34:30 amHow much cheaper? I imagine you can't give a specific example because these things are negotiated between companies, but can you give a ballpark?A power mosfet that costs around $1.4 for singles will drop to around $1 for 100, and maybe $0.55 for 10,000 units, so I'm wondering at what point you get diminishing returns on scaling up. I mean if you were to order 1 million directly from the manufacturer, would the price go down to 10 cents? Less?

author: Kjelt
author_rank: Super Contributor
timestamp: June 07, 2016, 01:47:54 pm
content: Quote from: derGoldstein on June 07, 2016, 01:11:00 pmI am not a member of that department and only saw some prices now and then for microcontrollers and remember they are usually made in a large package deal over a long period of time, so it is hard to call out such a quote. But think roughly 25% of an internet distributors lowest price (with highest quantity) should be not to hard, the distributor makes a lot of margin ofcourse but they are willing to keep the stock and sell in low quantities, have personell, buildings etc. so you can figure out the up % yourselfBuying directly from the manufacturer with those quantities as you named you have to have a longterm relationship and be a major player or you don't get invited at the table. If you are serious you just have to setup a meeting and negotiate. BTW negotiations can take weeks, depending on their stock and how much they need to sell.If it is a new product that is scarce than negotiations will be much tougher than if it are jellybean parts with millions in stock.I know from one story of a salesperson that by switching from manufacturer they offered their product at costprice, just so we would switch to them and use them in the future (as preferred supplier). This can happen if you talk about very large quantities. Then next negotiation round when you are a customer and have their product designed in, don't be surprised you have to pay extra, there is never a free lunch.

author: derGoldstein
author_rank: Regular Contributor
timestamp: June 09, 2016, 12:17:40 am
content: Quote from: Kjelt on June 07, 2016, 01:47:54 pmWow, that's lower than I would have thought... I was expecting something like 50% of the lowest distributor's price.I think I've been trying to "solve" the parts cost wrongheadedly. Counterfeits aren't necessary to get to prices as low as the typical chinese-bought e-bay products, it's more to do with creative use of common parts.(I'm just musing here, but I'd be interested if anyone could speculate on the likelihood of this theory)If you look at power electronics like LED drivers, MPPTs, battery chargers, vehicle 12V-24V converters, and DC amplifier power supplies, they're all just slightly different versions of DC-DC converters. They're going to have many common parts, specifically power mosfets, controllers like the TL494, op amps like the LM358, comparators like the LM393, and sometimes (for smaller circuits) just all-in-one ICs like the LM2596 or XL4015. Most of those are jellybean parts. Having as much overlap as possible in the BOMs of different products allows you to justify a one-time purchase of a million pieces of a particular chip.I was thinking of small production-runs of 2000 units for a specific product that may or may not sell well, when I should have looked one level above that, from a "what's in our warehouse" point of view. If you add passives to the short list of parts above, you can construct 90% of the circuit of a large swathe of power electronics products. Toss in transformer blocks and you can add AC/DC adapters and inverters to the list. You'd also need some mechanical components like sockets and switches, but they're often the same ones across the different products as well.If you shift focus a bit, like building audio amplifiers, the list doesn't expand by that much. The TPA3116D2 is shockingly good for its price, and just adding it to the list of power electronics you can design and build a dozen different audio amplifiers.I'm guessing what I just wrote is either a "no duh" or a "nonsense" situation... It would be interesting to know either way, however.