Editor at Large Industry Interview
The Internet is not the only way to do business
In an interview with Solid States Supplies, Michelle Winny, Editor of Electronics speaks with the company’s MD, John Macmichael to find out how niche distributors are still well placed against major broadliners and how e-commerce has yet to replace good fashioned business practises
ifferentiating yourself when you are a niche distributor in an industry that often appears over shadowed by larger broad- liners can seem tough for smaller oper- ations. However the role of the smaller distributor sits squarely beside that of the larger broadliners, as John Macmichael, Managing Director of Solid State Supplies explains: “Life for niche distributors has never been easy within the UK electronics market. “However estimates suggest there is close to some 400 smaller distributors operating in the UK versus a handful of large broadliners. This alone indicates the fact that there is still a major role to be played by the niche distributor.” This is particularly so when quality of cus- tomer service and a superior level of technical expertise is at the forefront of business objectives.
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Solid State Supplies is a franchised distributor that primarily services the UK OEM market. The company specialises in semiconductors, related components and modules for embedded processing, control and communica- tions, power management, and LED lighting. John advises: “As we focus on products from a limited number of suppliers, we understand their products in depth and so can offer customers outstanding levels of commercial and technical support.”
The distributor believes, excellent customer service is achieved through maintaining personnel with very high levels of technical expertise. This enables the company to offer a tailored service, achieved through closer business relationships and by truly understanding customer needs, which is not always possible with bigger broadliners. “By their very nature the larger broadline distributors with the best will in the world can’t hope to employ experts in all areas of electronics, nor can they give detailed attention to the thousands of UK electronics compa- nies”, Macmichael said.
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There are many companies out there who often require very small order quantities or a service that is bespoke. Often such small order requirements are not attractive to larger broadliners or they cannot facilitate the extra cus- tomer service. In responses to this Macmichael advises: “A need arises therefore at two levels: first and fore- most customers that don’t have the large spend necessary to justify the attention of the broadliners still need support; secondly suppliers that don’t fall into the top 20 or so in the world need a sales channel that will actively promote and support their products. This leaves a very large proportion of the market available to the niche dis- tributor.”
The age of doing business online For many companies across the indus- trial spectrum, the Internet and online sales are paramount to business, if not increasingly making up the greater pro- portion of business. However not for Solid State Supplies, who has yet to enter into the field of online commerce. Perhaps nowadays this would appear somewhat out of place with the rest of the industry but not necessarily so as Macmichael advises: “As broad- liners are forced to battle it out over the Internet responding to major inno- vations from their overseas competitors and to lower cost models being operated elsewhere in the world, the niche distributor is left to do what it does best – add value.
“No amount of web-based innova- tion will, for example, ever truly replace the need to hold dedicated stock or replace face-to-face, hands-on, skilled engineering support.” Macmichael explains: “The NHS 111 service has adequately demon- strated what happens when support is passed to staff following scripts from a computer program, whilst Internet- based FAQ centres frequently serve only to prove that the question that
needs resolving is in fact not one that is frequently asked. Howerver, Macmichael suggests a solution: “The answer of course is field- based application support provided by highly skilled engineers from niche dis- tributors. Some niche distributors, like Solid State Supplies, take this one stage further by not only employing highly trained application engineers alongside franchise specialists but also by partner- ing with expert companies.
John Macmichael, Managing Director of Solid State Supplies
“The broadliners through their immense Internet resources may be able to provide some of the biggest tools in the business but tools are of little use if you haven’t been trained in their use. Again specialists like us are able to provide a solution with regular, free, hands-on training for customers ensuring that their investment is kept current and both fully and efficiently utilised, Macmichael continued. Of course expectations of value go well beyond the ability to provide tech- nical and commercial support but again the niche distributor is able to respond as John explains: “The agile approach taken by Solid State Supplies means that their in-house secure programming facility, one of the very few certified to AS9100, can be utilised to provide 24 hour turn around on FPGA samples for customers, to tape and reel devices in quantities that would frankly be uneco- nomic for broadline distributors; or to bake customer products that would otherwise be unusable. For niche distributors the term service is used to encompass all of their customers not just the handful in the top 20 percent.” The distributor has experienced continued growth and success high- lighting how its business model is suc- cessfully working as John explains: “Solid State Supplies is one of the few companies that have managed to grow their business significantly throughout the market downturn and it has done this by investing heavily in the things that customers want.”
Solid State Supplies
www.sss.plc.com Enter 203
Macmichael summarises with a view to the future: “No niche distributor can afford to be complacent and web-based services will inevitably be a part of the way we do business but the reality is that people still do business with people whether that’s in engineering or purchasing. It’s still a people business.”
SEPTEMBER 2013 Electronics
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