Estimated reading time: 4 minutes

It's Only Common Sense: The Grey Market

Editor's Note: To listen to Dan's weekly column, as you've always done in the past, click here. For the written transcript, keep reading...Where are your boards coming from? Two circuit board markets now exist in this country: The traditional market--the one saturated with all kinds of clever exclusive barriers to doing business--filled with specs and qualifications, registrations and surveys, site visits and sample boards, and everything else, from NADCAP to 31032. In other words, everything designed to make it difficult for a normal board shop to do business the old-fashioned way. The right way.

And then there's the "grey market" or, as some call it, the "underground market." This is the nebulous world where rules don’t matter at all, where anything goes, where there're no specs, surveys, registrations, or site visits. There's also no normal RFQ and quoting process. No, none of that exists in the wonderful brave new world of the grey market.

Instead, all someone has to do is go online, find a PCB “no touch” vendor, click a few buttons, and use the company credit card to purchase the board they want, the way they want it--exactly when they want it. Just a few days later the boards arrive. In fact, if you’re part of one of those big companies with a limit on your credit card the web site will break down your purchases into manageable, timed amounts to meet your needs. Isn’t that neat?

These grey market vendors will even provide free design tools. Of course, if you use these design tools you are committed to buy the boards from them. If you use their design tools, they own the design, not you, and it has to stay there in your account so you can’t take it with you.

Are these website board vendors cheaper? Yes, initially they are if you don’t change anything on the board...if you build it their way (the cheap way). If you make the slightest change or addition or, heaven forbid, if you have to break your silence and actually talk to someone, the price will start rising faster than the June sun in Eastport Maine. And by the time you figure out you’re paying more than if you had bought your boards the traditional way, it’s too late. You are already up that creek without a paddle. There's no way out unless you want to start all over again, but by now you’ve lost all your buffer time and you have no choice but to move forward with your purchase.

Now I’m not saying there is anything wrong with these websites. They've been around for years…just check out the back of the trade magazines and you’ll see them all listed there. You can easily spot them as they’re the ones that look kind of like the Viagra adds in the back of Rolling Stone magazine. These sites offer a service that people want. In fact, they were initially designed to serve hobbyists, inventors, and the small business market and did a great job at that. 

But now the big guys are using them--the big defense and aerospace companies. The ones who've been in bed with IPC for years coming up with all of those fancy barrier-creating specs that we've had to live with. These are the specs, registrations, qualifications, and site surveys that we've had to spend millions of dollars on before they would even deem us worthy to darken their hallowed doors. Those guys are using the "no touch" websites now and superseding the expensive requirements they themselves put into place to make sure they had the “perfect” board vendors.

So, while you're spending millions of dollars complying with their specs and qualifications of the month club requirements, and your expensive sales people are spending weeks or months trying to get an appointment  with their buyers, their designers and engineers are buying millions of dollars worth of PCBs from companies they don’t even know, and don’t even talk to, who have none of the specs and qualifications and surveys that company policy states they need. In short, they're buying boards from unqualified suppliers.

I’m not sure what can be done about this. What I do know is that it sure as heck isn’t fair. It’s not fair to companies that have done everything by the book, those that have played by the rules because they believed the customer was right, those who've spent millions of dollars getting qualified to get approved by these large companies only to learn much too late that, for the most part, it was all for nothing.

I think there are only two options to making this right. The first is for these big companies to stop using unqualified suppliers for their circuit board requirements--whether it be proof of design, prototype, pre-production, or production. They've got to start following their own rules and use only qualified suppliers. Or, better yet, the second option, which is to level the playing field by removing all of their barriers and open up their circuit board acquisition process to everyone who builds boards. Which one is it going to be, big guys? You've got to make a choice...it’s only common sense.