Four Ways to Buy Electronic Components and the Pros and Cons of Each

Estimated reading time: 7 minutes

Sometimes brokers simply can’t be avoided. Although the risk can increase it’s not to say you should never use them, as often they are the only way to source components, especially older technology. But if you do need to use them, we recommend selecting a core group of brokers which you audit regularly in order to minimize the level of risk you expose your business to.

Pros:

• Specialize in sourcing hard to find/obsolete parts and usually have access to a wide (global) market.
• Can often deliver shorter lead times than authorized distributors or manufacturers.

Cons:

• Reduced technical and after sales support. Their main business is to buy and sell, technical support isn’t usually a core offering.
• Risk of substandard or counterfeit parts entering your supply chain increases. Parts can move very fast between brokers so keeping track of who has what, where and how the parts have been stored and who originally purchase the parts in the first place reduces with each transaction.
• Minimal pricing negotiation. If they have the parts and they know you need them desperately, you’ll probably struggle to get the best price.

Hopefully, this article has highlighted some of the different supplier types available when procuring electronic devices, along with the pros and cons of each. As mentioned already, it’s likely that the teams responsible for your material supply chain will need to access all of these at certain points during a particular project or product lifecycle.

It's also worth noting that the lines between supplier types continue to merge and blur. For example, a number of authorized distributors now offer cut down/small batch quantities in an attempt to compete with the catalog suppliers. And likewise, some catalog suppliers will now happily sell full reels of components and pack sizes to attract larger clients. 

Although some risks can increase the further down the supply chain you go, having robust supplier selection strategies and audits in place can significantly reduce these. If you currently build your own products in house then you should be aware of these policies. However, if you are outsourcing, or considering it, we recommend you focus a significant amount of time in this area to make sure you have confidence in your assembly partner's process.

This article originally appeared on the JJS Manufacturing blog, which can be found here.

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