Distributor Shrinking Pains

It is interesting to see how some distributors of components are re-positioning themselves as they struggle to keep all of their franchises satisfied in a shrinking market. Specialist suppliers who have a focussed core of products struggle to market themselves alongside broad line distributors. The big guys get earlier insight into new product development and slap on design registration as soon as they have knowledge of an application. It then becomes a self-fulfilling prophecy for the smaller distributor as fewer franchises means less market penetration, a decline in revenue and an increase in the burden of keeping sales and technical staff on the road.

This year's decline in manufacturing investment in the UK has seen a spectacular share price fall for components distributor Electrocomponents (RS to you and me). For the first time that I can remember their stock is now less than that of their historical rival Farnell. Over the last 20 years RS has always been around three times larger than Farnell, but now their market capitalisation is almost identical. Both companies are headlining 'massive' discounts on their websites but I sense this is alien to the RS mindset and they have much more work to do. RS may be the M+S of the component world so stick around for butchery or buyouts.

The Ideal Supplier

We, at Cope, consider the following four virtues as very important, which is why Cope Technology could be your Ideal Supplier....

Efficiency:

Influenced not only by pricing but also by technical expertise, reliability, flexibility and quality.

Communication:

Verbal, in person, and via the internet.

Quality:

Products that satisfy your customers' requirements.

Partnerships:

Long term partnerships help reduce costs, optimise quality and encourage new product introductions.