Top Independent Distributors
GeoGraphic expansions, investments in quality drive Growth
Leading independent distributors are positioning themselves as a vital part of the supply chain, as they continue to focus on quality assurance, counterfeit detection, and inventory management partnerships.
By Gina Roos
Global sales for the top 10 independent distributors grewby $172.2 million or 11%percent, reaching $1.75 billion in 2010, partly due to severe component shortages as the industry started to recover froma global downturn that began in the fourth quarter of 2008, according to Electronics Sourcing North America's (ESNA) survey of leading independent distributors.
In 2010, the supply chain struggled to keep up with demand, as
componentmanufacturers cautiously increased production capacity, resulting in extended lead times and allocations across virtually all product areas.
Nearly all of the top 10 independent distributors posted higher
revenues in 2010 with the exception of Smith & Associates, which attributes the decline to its exceptional sales in 2009. The distributor reported revenues of $437million in 2009, increasing sales 41 percent over the previous year. In 2009, five of the top distributors posted sales losses.
This year, you'll notice that Converge Inc., ranked number 3 in 2009, is
not included in the top 10 ranking. ArrowElectronics, a leading franchised global distributor acquired Converge in 2010, and reported the independent distributor's sales as part of its global revenues last year.
The top five independent distributors virtually remained the same in
2010. The top two distributors - Smith&Associates and AdvancedMP Technology - switched rankings this year. AdvancedMP, ranked number onewith $382million in sales,was followed closely by Smith& Associates,which posted $380million in revenues. With the loss of Converge, America II Electronics (rank 3), Fusion Trade
Rank Company
1 Advanced MP Technology 2 N.F. Smith & Associates, LP 3 America II Electronics Inc. 4 Fusion Trade Inc
5 Classic Components Corp. 6 Rand Technology 7 Horizon Technology
8 World Micro Components Inc. 9 Stealth Components Inc. 10 4 Star Electronics Inc. Source: ESNA
24 | June 2011
($millions) 382.0
380.0 300.0 250.0 205.0 100.0 60.0 30.0 23.0 18.0
Global Sales
2010
previous year
30%
-13% 26% 7% 4%
18% 15% 50%
207% 58%
Percent change from
(rank 4), and Classic (rank 5), allmoved up one position. Rand Technology joined the top 10 ranks at number 6with $100million in revenue. The largest share of sales for the top 10 independent distributorswas
derived fromsemiconductors at $1.1 billion, or 61 percent of global revenues. Sales of the top distributors for interconnects, passives and electromechanical (IP&E) reached $482.3million, or 28 percent of all sales. Top distributors posted computer product sales of $158.3million.
Thanks to overall strength in the electronics industry, several top
independent distributorsmade significant investments in geographic expansions in 2010.
AdvancedMP Technology expanded in France, Germany, China
(Shenzhen), Brazil andMexico. Fusion Trade doubled the size of its European office, tripled the size of its Hong Kongwarehouse/quality hub and established an on-site presence in Guadalajara,Mexico.
Classic Components expanded in India and Asia, and Rand Technology
expanded in Europe, Asia aswell as North and South America. Classic alsomade some sizeable investments in newinspection
capabilities that included purchases for in-house X-ray capabilities. 4 Star Electronics also investedmore than $200,000 in quality-related equipment and plans to continue investing in leading-edge technologies to improve the company's capabilities. Stealth Components focused on upgraded technology, implementing a newenterprise database system and newphone system.
Key challenges this year, say distributors, include product availability,
extended lead times, counterfeit components, and rawmaterial price increases. They also say quality/supply assurance is a big issue for 2011, citing "credibility concerns regarding quality of openmarket products."
top 10 independent distributors %of total sales
employees Components Components mechanical Interconnects Products 272
307 600 100 265 70
100 66 63 43
50 75 75 48 68
27 4
20 00 20 13
80 55 5 10 00 0 25
20
N/A 30
N/A 15 N/A
30 02 20 19 26
2 5
20 N/A
90 20
N/A 50 28 10 # of Active Passive Electro- Computer Other
10 90 0 1
5 0 0 3 0 0 0
N/A 0
www.electronics-sourcing.com
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