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The Expanding Role of Distributors
The distributor's website has become the first place that many design engineers look for needed parts and products.
By Scott McLendon, Vice President of Marketing and Product Management, Allied Electronics, Ft. Worth, TX
The role of electronic component distributors in the industry has undoubtedly expanded over the years. While the overall function of distributors has not changed greatly, the way distributors conduct business and how they meet ever changing customer needs has evolved. Engineers and purchasers look to distributors for much more than just components and parts. Customers look for three areas of competence — inventory, convenience, and service.
The expanding role of distribution certainly applies to catalog distributors, such as Allied Electronics, which sells small volumes of parts for design, prototype builds and small production runs. Catalog distributors face the same challenges as the rest of the industry, along with other, highly specialized problems. However, their response to this expanding role has opened up opportunities for them to serve a broader customer base and grow their market share.
One major reason that engineers and purchasers turn to distributors for solutions is because their inventories include such a broad product range. Distributors offer one-stop shopping for customers across many different industries looking for a wide range of electronic component parts. Customers can access thousands of product solutions from multiple suppliers from a single source. Another key value that distributors offer customers is access to inventory. Most distributors are committed to inventory and can offer customers instant access. Catalog distributors like Allied go one step further and offer this access in the quantities desired, not just standard package sizes. For example, a customer can purchase three pieces or 100 pieces off of a reel of 5,000. Due to their broad product range and inventory, distributors deal with customers in a variety of markets, including energy, food and beverage, water/waste water, transportation and communications. As these industries grow, distributors must expand their product offering to offer the latest innovative technologies from leading suppliers to meet a wide range of market requirements.
Meeting Market Demands
Some new products and technologies are pushing distributors to strengthen their product offerings to meet market demands. For example, as demand for light-emitting diode (LED) technology grows in the commercial and industrial sectors, distributors have committed more resources to this emerging market. Wireless connectivity is another area that will continue to grow as more industries adopt this proven technology.
A sampling of the many wireless products available on the distributor's website.
As technology enables industry evolution, distributors will be challenged to enhance their product portfolio in order to keep pace with existing markets, and tap into new and emerging markets. In an effort to do this, Allied added 20,000 new products to its most recent catalog, and constantly updates its product offerings with the latest technologies on its website.
Engineers and purchasers have also grown to rely on distributors because of convenience and ease of doing business. In addition to finding a broad product range, customers can order most, if not all, of their product needs from a distributor, often with just the click of a mouse, saving them time and resources. Distributors have boosted sales in recent years by offering convenient web access and increased functionality to customers.
With online purchasing booming in so many other industries, many distributors have embraced the web as a means of reaching new customers and expanding their market share. After all, research has shown that engineers turn to the web today for everything from product datasheets to training and technical support. In addition, engineers and purchasers have begun to turn to distributor web sites for more than just product information, pricing and availability. Distributor web sites have evolved in recent years to include more e-commerce functionality, such as enhanced search engines, online purchasing capabilities and self-service options. Web customers can use parametric search functions to find specific products on many distributor web sites. They also have the ability to track shipping information, check order history and manage their accounts online.
Recognizing the convenience that the web offers, customers have become much more comfortable procuring their electronic component products online. With the transition to the web, customers are also beginning to demand more control of their online purchasing. For this reason, distributors have taken purchasing management to the next level with the use of technology and the web. For example, Allied offers a free online purchasing tool that allows purchasing managers to simplify their procurement process and can be customized to fit their business needs.
Online purchasing will be a key growth driver for those distributors who have embraced the web. One key to success for distributors will be to capitalize on the growing trend by keeping web content fresh and customers engaged.
Service, Product & Technical Support
In addition to inventory and convenience, engineers and purchasers also look to distributors for service. Customers expect distributors to do more than take their orders for electronic components. They expect distributors to be available to provide product and technical support before and after the sale.
Many distributors have met this growing demand by offering email or phone technical support to provide customers with answers quickly and efficiently. Customers often turn to distributors with design questions because distributors' broad product portfolios allow them to suggest a range of components that can best solve the customer's problem.
Distributors are also able to provide technical support across a variety of industries and applications, which opens up opportunities to assist many different types of customers. Technical support teams have broad engineering backgrounds that allow them to offer support in many different areas.
Another critical service that distributors provide to engineers and purchasers is assistance with immediate part requirements. Oftentimes, distributors are best able assist customers who are in a bind because of their established partnerships with manufacturers. Allied works closely with over 300 supplier partners. A customer finding himself in a line-down situation can rely on a local, dedicated sales rep and a centralized product management team to work with supplier partners to ensure that product needs are met. Looking ahead, distributors should expect to play an even greater role as customer needs continuously change in order for them to stay competitive in their markets. Customers will rely even more heavily on distributors to provide immediate access to inventory, information and services. Distributors will be challenged to stay on the cutting edge in each of these areas to remain competitive. Those that can evolve to meet the growing demands of today's customers in rapidly expanding industries should benefit from greater customer loyalty and new customer acquisition.
Contact: Allied Electronics, Inc. 7151 Jack Newell Blvd., South Fort Worth, TX 76118
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