Catalog Distributors
Catalog distributors growfaster than other distributors in 2010
These high-service distributors are focused onmaking sure they have the inventory in stock any time a customer needs a part By Gina Roos
Catalog distributors, which have long outgrown their nomenclature as catalog distributors, experienced tremendous growth in 2010, growing 37 percent thanks to a recovery across all industry sectors, after a downturn that started in the fourth quarter of 2008.
While catalog distributors still find tremendous value in their
catalogs, whether in print or online, over the years they have morphed into high-service andmulti-channel distributors. These distributors - Digi-Key, Newark element14 (renamed as part of a new global branding effort), Allied andMouser - grew faster than most leading franchised distributors last year, reaching $2.4 billion in sales for North America, up from$1.7 billion in 2009.
Catalog distributor sales rise by 37% ($billions, North America)
Mark Larson, president, Digi-Key Corp., Thief River Falls,Minn. "The devastation in Japan [due to the quake and tsunami inMarch] will probably have a negative impact that will be felt in the third and fourth quarters, but it will not be devastating. Itmightmean that it may be difficult to see that 20 percent growth, but we should be able to attain between 15 to 20 percent growth."
Larson believes theremight be spot shortages in several areas as a
result of some lost production in Japan, but currently the distributor is not facing a lot of shortages and ismeeting its fill rate goal.
Other distributors agree, although there is still some uncertainty in terms of the full impact fromthe Japan disaster.
internet sales continue to grow (% of total sales in 2010)
Source: ESNA
Source: ESNA
Leading the pack is Digi-Key, which posted a sales increase of 47.5
percent in North
America.Mouser Electronics followed closely, tallying 47.4 percent growth. Allied Electronics grew its sales by 30.7 percent, while Newark element14 increased sales by 20.7 percent.
Catalog distributors also expect double-digit growth this year.
"Even in North America we're still experiencing double-digit growth," said Kevin Hess, vice president of technicalmarketing, Mouser Electronics,Mansfield, Tex. "We don't expect sales to grow as fast as last year but we expect to grow slow and steady."
Mouser has opened up several sales offices in Europe and Asia,
which has allowed the company to grow by a larger percentage globally. In addition to growth fromthe sales branches,Mouser is also garnering higher growth fromthe Internet in those regions.
Digi-Key says it's on track to grow 20 percent in 2011. "For the first fourmonths of this year, our sales were up 28 percent," said
40 | June 2011
"We haven't seen a tremendous disruption in the supply chain,
but like a lot of others we are reacting ahead of that tomake sure we don't have any issues," said DavidWenger, vice president, customer experience, Newark element14, Chicago, Ill.
One of the things that Newark element14 did was to launch a
microsite to provide information about what's happening in the supply chain as a result of the Japan quake and tsunami. "It's been one of ourmost active discussion groups," saidWenger.
inventory is number one
The biggest challenge last year was keeping up with increased demand and providing the same high level of service and inventory levels, agreed distributors.
"The biggest challenge last year wasmanaging the supply chain
www.electronics-sourcing.com
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