Electronics Industry Thoughts and Ideas - Page 1
Forum section: electronics / beginners

author: tomknox
author_rank: Newbie
timestamp: November 07, 2014, 11:21:58 am
content: Hey Guys,I was wondering if anyone would be interested in helping. I'm currently writing an essay on the electronics industry with a focus on companies like Premier Farnell and Electrocomponents.I've been trying to work out what the future may look like for these companies and how they might be affected by trends in electronics engineering ('the internet of things' etc). I also can't work out how the little local suppliers manage to compete with these bigger guys.I'd be really interested to hear the opinions of some experts and enthusiasts in the field. Any more general thoughts or ideas would also be amazing.Thanks for all your help and time,Tom

author: Simon
author_rank: Unknown
timestamp: November 07, 2014, 11:26:53 am
content: as one of those small suppliers that competes I can try and give you some insights if you like. just pop me a pm

author: Wilksey
author_rank: Super Contributor
timestamp: November 07, 2014, 11:31:08 am
content: The trouble with the likes of Farnell is that they are a massive company selling lots of ranges thus competing with each other, i.e. they sell Microchip and Atmel microcontrollers.Smaller companies might get better / favourable discount from the manufacturer if they favour a particular part, also, I have found with smaller distribution firms the support is there with their field apps engineers (FAEs), Farnell offers limited support in these fields.Farnell is OK if you want to buy something "off the shelf" and have done.The smaller firms also have access to resources, such as PCB designers, EMC test houses and the like which they can discount you on (sometimes).With the IoT things can only get better for smaller and bigger distribution chains, unfortunately some smaller distributors ultimately lose out when companies buy out other companies and the distribution chain changes so that some distributors can no longer supply these products, this has been seen recently when UBLOX acquired ConnectBlue.Trends change constantly, if you are a focused enough small company then you will go with the trends and stay in business, larger companies have enough footfall to stay ahead of the game anyway. Don't forget that if you are a small company, you need perhaps only a handful of constant clients buying from you to stay in business.These are my thoughts, good luck with your essay!

author: tomknox
author_rank: Newbie
timestamp: November 07, 2014, 04:14:15 pm
content: That's amazing. Thanks very much indeed for your help.Obviously any other perspectives would still be amazing.Thanks guys.

author: Tandy
author_rank: Frequent Contributor
timestamp: November 07, 2014, 04:52:05 pm
content: The primary customer for large distributors like Farnell are professional engineers and operate efficient logistic systems to get millions of items quickly to their customers. Very few of the staff at a company like this know anything about the items they are selling, they could equally be selling tinned foods as their primary expertise is in moving large volumes of products through their distribution network.Some of the problems facing the smaller suppliers include..Large minimum orders: Most manufacturers won't deal with you if you can't place orders valued at least 10s often 100s of thousands of $.High Dealership Requirements: Manufacturers will often require that official distributors carry the full range of a manufacturers products. With concerns over fakes there is usually a contract that requires all components to be sourced direct so when stocks are not available it is not possible to buy from a second source. There are often audit requirements to make sure that no cheating is going on.Exclusive arrangments: The manufacturers often select one or two distributors for each country as their exclusive distributor, they don't want distributors competing with each other putting price pressure on their products.When you consider smaller distributors they have a very different approach and target customer. Generally their main customers are not professional engineers they are typically a niche market in a specific industry or quite often a particular hobby community such as Arduino hobbyists and model makers etc. They often know more about the particular field that they specialise in and stock a range of items that are specifically well suited for a particular purpose. Often they will produce specialist products themselves that meet a particular need. For example Adafrut who produce a range of small circuits that are useful for hobbyists.There are many what you might call micro-businesses that are typically one person businesses that typically the person has a day job and electronics is their hobby. They often buy their stock from the main distributors like Farnell in moderately large quantities to benefit from discounts offered when buying quantities and then sell them individually. It is not important for them to make enough money to earn a living but rather any money they do make is often used to help fund their hobby. This kind of micro-business is not unique to electronics, you just need to go to any craft fair or food fair to see that there are many individuals selling things they have made to earn some extra money to pay to support their hobby.

author: Simon
author_rank: Unknown
timestamp: November 07, 2014, 05:34:26 pm
content: Quote from: Tandy on November 07, 2014, 04:52:05 pmThat is sort of where I sit although I try to work to a slightly higher level where I'm designing stuff to sell but subcontract manufacture out and I don't stock a huge range but buy in sufficient quantity to get a good price so that I can remain competitive

author: janoc
author_rank: Super Contributor
timestamp: November 07, 2014, 06:23:49 pm
content: Don't forget the fact that the big distributors (Digikey, Farnell, Mouser, Arrow, etc.) usually don't want to hear from the small guys (hobbyists). Some don't sell to them at all, some do, but then tend to penalize small orders with huge s&h fees, minimum order limits and similar nonsense.

author: T3sl4co1l
author_rank: Super Contributor
timestamp: November 07, 2014, 08:24:35 pm
content: Actually, that list of major suppliers is pretty good on small purchases. After all, it would really burn them if small purchases, whether corporate (I need parts for testing / rush to fix a prototyping SNAFU) or hobbyist (what do you think the best engineers do in their spare time?), were overly impaired.There is a difference of course; and that's mainly that, Digikey for example is simply expensive across the board. For small orders, you can usually save 5-10% shopping at Mouser, if the same or similar parts are stocked. Their prices are geared towards large purchases, and actually are quite competitive when it comes to production: contract assemblers often purchase reels of resistors and capacitors from Digikey, because they actually give better quantity pricing than many others!Arrow and Avnet are geared towards production quantities, though.Allied is kind of a dinosaur among these, but they do offer some interesting components and brands, at reasonable prices. I'm fond of Illinois Capacitor PPBs for those occasions when I need a lot of reactive power. Still haven't managed to melt one.As for the industry as a whole, I see no sign of disruptive technology pushing out electronics -- not for the better part of the century, at least! There will be more and more development of chemical and biological systems, and integrating those with electronics first. Further in the future, I believe electronics will ultimately decline as complete biochemically engineered nanosystems (aka, artificial life, if you will) take over. But that's all very speculative; for now, electronics will only continue to integrate in daily life.Tim

author: Simon
author_rank: Unknown
timestamp: November 07, 2014, 08:36:50 pm
content: The nice thing about digikey is that you ring them on a free phone number and get an immediate answer and get passed straight to a technician