Can a manufacturer ban us from using its products ? - Page 1
Forum section: electronics / projects

author: Throwaway-2
author_rank: Newbie
timestamp: June 23, 2016, 02:44:14 pm
content: Hey, obvious throwaway for this question, sorry. We would like to use a precise chipset from a manufacturer but they have been less than helpful. Their distribution network is terrible and all in all, it's the worst experience we've had. Still, the chip is nice.The local distributor has no stock, is not willing to help, does not provide samples and acts like he's doing us a massive favor by selling us 100 pieces for 14 USD a piece with 4-weeks leadtime. Communication is also terribly slow. Manufacturer insists on us going through this distributor.Meanwhile, a quick email to Shenzhen and we had samples in three days for 3 USD a piece. It works great.Now if we go ahead with the chipset, build a product including it and order reels in Shenzhen, can the manufacturer bother us in anyway ? ThanksEDIT: The chips aren't available through the usual big distributors like Mouser, Digikey, Farnell, Future and so on. It's the manufacturer distribution network or dozens of Shenzhen sourcers. Our local distributor is more of a man and his dog than a convenient platform. The chip isn't under any legal restrictions.

author: jitter
author_rank: Frequent Contributor
timestamp: June 23, 2016, 03:27:13 pm
content: The company I work for has been in a similar situation, and when we thought we had found a backdoor, that one was shut on us pretty quickly too.So yes, unfortunately, that could indeed happen. We can now only get some parts through a local distributor at a premium or not at all.

author: Len
author_rank: Frequent Contributor
timestamp: June 23, 2016, 03:51:43 pm
content: Jeri Ellsworth talked about this recentlyon the Embedded podcast. Her company was screwed over by a manufacturer that just decided to stop selling them chips.

author: razberik
author_rank: Frequent Contributor
timestamp: June 23, 2016, 03:58:16 pm
content: Why bother with somebody who think his customer is not worth his time ?Go for another solution and leave these ignorants.

author: nctnico
author_rank: Super Contributor
timestamp: June 23, 2016, 04:22:12 pm
content: Quote from: jitter on June 23, 2016, 03:27:13 pmI tend to agree. If it is for a one-off/limited run project you could use a backdoor route (and buy some extra) but if you need a steady supply then you have to make sure you can rely on it.

author: mikeselectricstuff
author_rank: Super Contributor
timestamp: June 23, 2016, 04:30:08 pm
content: Quote from: Throwaway-2 on June 23, 2016, 02:44:14 pmIf nothing else it would be worth telling the manufacturer how bad their distributor is.At least they'll sell you just 100.. 4 weeks leadtime isn't a big deal, and towards the low end of the range for non-stock parts.Have you tried talking to distributors in outher countries?QuoteAssuming they are genuine, they still could be surplus stock with a limited supply available, so risky to rely on unless you can order enough stock for the forseeable future.

author: ebclr
author_rank: Super Contributor
timestamp: June 23, 2016, 04:45:44 pm
content: It's not uncommon that backdoor's works much better that the direct way.I would maintain the backdoor, and be sure that are a loots of others backdoor available, if one closes just go to the next one.It's impossible to control ( except for very high quantity )

author: Marco
author_rank: Super Contributor
timestamp: June 23, 2016, 05:06:25 pm
content: Quote from: jitter on June 23, 2016, 03:27:13 pmHow could they prevent you from getting it somewhere else? Does every distributor for their parts insist on seeing plans for the product it's going into or something?

author: razberik
author_rank: Frequent Contributor
timestamp: June 23, 2016, 05:12:58 pm
content: Reminds me always crossing out Maxim from manufacturer list when choosing some product.

author: AndyC_772
author_rank: Super Contributor
timestamp: June 23, 2016, 05:15:57 pm
content: This experience is commonplace when it comes to chips that are designed for high volume applications only. If you want to buy, say, anything that's normally found in a desktop PC, then you can expect the cold shoulder unless you want to buy hundreds of thousands.The manufacturer is unlikely to try and physically prevent you from using their part, but know that you're not worth their time. If you can get the parts through an overseas source, then fine, go ahead if that's an option for you. If not, don't say you weren't warned.(Mildly amusing story: some years ago I was working for a company that made products based on PC motherboards. We bought dozens of them through a distributor, who in practice were just a box shifter. One day I called the manufacturer for some technical information on the board, but the first question they asked was where I'd bought the board from. Turns out they simply wouldn't even talk to me until I went out and bought a single, identical board through a retail channel, on the basis that it would include manufacturer support instead of the distributor-only support that the wholesale boards came with. I'm so glad I'm not in that crappy business any more).

author: jitter
author_rank: Frequent Contributor
timestamp: June 23, 2016, 06:06:18 pm
content: Quote from: blueskull on June 23, 2016, 03:37:40 pmBecause the manufacturer of the boards we need will not sell it to us directly, only through the local distributor.The backdoor we found was through our German plant, they ordered it for us and then sent the boards to us. Even that construction was deemed not OK by the manufacturer. Dutch plant buys of Dutch distributor. End of story.

author: jitter
author_rank: Frequent Contributor
timestamp: June 23, 2016, 06:13:27 pm
content: Quote from: Marco on June 23, 2016, 05:06:25 pmThe Dutch distributor must have contacted the German manufacturer, and that manufacturer was willing to stop the supply to our German plant, or something like that.It may be the case that the distributor helped our custimer a bit with the development of the product that particular board went into, but AFAIK no contractual obligations to buy from that distributor were signed.We need a steady supply, but paying a premium of several tens of Euros per board seemed a bit unfair to us. The backdoor lasted a year, so luckily we did profit from the construction reasonably well.

author: Marco
author_rank: Super Contributor
timestamp: June 23, 2016, 06:18:03 pm
content: Do you have to sign a contract which forbids resale of the unused components?

author: Throwaway-2
author_rank: Newbie
timestamp: June 23, 2016, 09:11:16 pm
content: Thank you all.Quote from: razberik on June 23, 2016, 03:58:16 pmIt's a convenient chip with regards to the other parts we have on board.Quote from: mikeselectricstuff on June 23, 2016, 04:30:08 pmThey are doing us a "favour" by selling 100, after weeks of useless phone calls about the project, its uses, our goals, my pet names and so on. And at 5 times the price of Shenzhen. I haven't tried other distributors, Shenzhen was an email away and it got done in three days. The chips are genuine, we already order other chips from this Shenzhen distributor and at this price, we could stock a few. A few chinese companies resell these in their own products and surely a lot more get assembled there which is probably the reason so many distributors there have it on display in their catalog. Honestly, I can't see any austrian company ordering reels from this local distributor as they'd probably have it assembled in and sourced from China anyway. The distributor's salesperson had no clue about the product, couldn't bother to escalate my few questions to someone knowledgeable and their inventory is nothing related. It looks like an historical relationship, let's say they sell soldering irons and power/electrical parts most.Quote from: Marco on June 23, 2016, 05:06:25 pmI have no experience with this which is the reason for this post.Quote from: blueskull on June 23, 2016, 05:08:17 pmIt's a specialized chip but we do have other options, although in much harder packages to assemble and we'd have to outsource it.Quote from: AndyC_772 on June 23, 2016, 05:15:57 pmWe received no support whatsoever from the manufacturer nor the distributor anyway. Which is sad as other much bigger companies have been of (literally) incredible help.

author: Kilrah
author_rank: Unknown
timestamp: June 23, 2016, 10:26:35 pm
content: Some manufacturers have BIG customers and regardless of how their product could be valuable to others they only look at the business side of things and couldn't care less about the drop in the ocean.Some of those BIG customers also sometimes use the fact they're so big to make it clear that they'd "appreciate" other companies not to have access to the cool part that clearly gives an edge to those who use it, or pay extra to make sure of it.Sometimes the manufacturer actually won't sell you the part unless you use their expensive engineering services to design your product around it.Of course nobody will admit that, officially the part is on offer and available, but you get in such a situation where everything is made to try and get you to go away.Envoyé de mon SM-G930F en utilisant Tapatalk

author: Cerebus
author_rank: Super Contributor
timestamp: June 23, 2016, 10:46:03 pm
content: Quote from: jitter on June 23, 2016, 06:06:18 pmSurely a direct violation of the rules on free movement of goods within the EU?

author: sarepairman2
author_rank: Frequent Contributor
timestamp: June 24, 2016, 12:55:43 am
content: no one will investigate that with out a complaint and you would likely get regional politicians involved (i.e. any governing bodies that could effect you would get autogreased for you because it is effecting jobs in the area because of retarded bullshit)this is the kind of thing that will end up getting handled through back channels.

author: xrunner
author_rank: Super Contributor
timestamp: June 24, 2016, 01:07:28 am
content: Quote from: Kilrah on June 23, 2016, 10:26:35 pmThanks for that explanation, I was going to ask a question along those lines, and now I don't have to.

author: jitter
author_rank: Frequent Contributor
timestamp: June 24, 2016, 04:42:07 am
content: Quote from: Cerebus on June 23, 2016, 10:46:03 pmThat's a good question.The fact that we were able to use a backdoor means that the rules weren't broken and that free trade is possible. But I don't think those rules say that a manufacturer cannot refuse to sell something to a certain party regardless of whether that party is foreign or domestic.We see a similar thing with medicines. Our government is trying to make medicines cheaper, and now we see that the big manufacturers just won't sell some of them anymore over here. They are getting away with it now, but eventually this might become a ticking timebomb...

author: helius
author_rank: Super Contributor
timestamp: June 24, 2016, 04:46:57 am
content: It seems to me that exclusive regional distribution agreements are in restraint of trade.

author: CatalinaWOW
author_rank: Super Contributor
timestamp: June 25, 2016, 12:05:54 am
content: This might not be a battle you want to win. If most of the manufacturers sales are outside the EU, the decision might be to stop bothering delivering to all of the EU. That way he is being totally fair, and doesn't have to deal with a bunch of regional people, none of whom are resulting in much business.

author: Marco
author_rank: Super Contributor
timestamp: June 25, 2016, 01:55:48 am
content: Quote from: jitter on June 24, 2016, 04:42:07 amObvious solution : void the patent, put in a tender for producers. If none can compete then I guess it was a good price.

author: Cerebus
author_rank: Super Contributor
timestamp: June 25, 2016, 03:13:18 pm
content: Quote from: CatalinaWOW on June 25, 2016, 12:05:54 amPeople constantly underestimate how big an economy the EU represents - the worlds biggest or second biggest depending whether you believe the World Bank or the IMF, accounting for 22 - 24% of the world's GDP. It is wildly unlikely that any company selling internationally could disregard the EU.

author: Prime
author_rank: Regular Contributor
timestamp: June 25, 2016, 03:14:26 pm
content: Quote from: Len on June 23, 2016, 03:51:43 pmHave had the same experience from a battery supplier. Won't import any of the lithium batteries that they are the agent for. Went so far as to lie to us that the problem is in Japan - but other teams across the world had no issues procuring the same parts.

author: RogerRowland
author_rank: Regular Contributor
timestamp: June 25, 2016, 03:16:00 pm
content: I'm intrigued.What exactlyisthis part/device/chipset?

author: CatalinaWOW
author_rank: Super Contributor
timestamp: June 25, 2016, 03:49:30 pm
content: EU is a huge market. But perhaps not for that chip or even that manufacturer. Different regions have different preferences, different rules and different suppliers leading to significant differences in products.To take the most obvious example - a vendor of 110 VAC outlets and switches could probably ignore the EU market without harming sales significantly.

author: TAMHAN
author_rank: Frequent Contributor
timestamp: July 27, 2016, 09:06:06 pm
content: Hello,if you are referring to a man and his dog - don't say it is a Slovak distributor.Tam