The largest electronic components distributors reported a solid 2014, and many are optimistic that 2015 will bring much of the same, according to Global Purchasing’s newest Top 50 Electronics Distributors report. The optimism is driven by improving global markets and the proliferation of electronics in all aspects of daily life.
Although the traditional rapid pace of electronics industry growth has slowed considerably in recent years, many distributors are heartened by customers’ demand for more—and better—ways to connect, sense, and automate everything from cars and medical equipment to factories and home security systems. Helping design engineers access the latest components and information to achieve that goal remains distributors’ most important task—and one they say is increasingly driven by the need for better information technology systems, faster access to information, and the ability to “touch” customers in more and more locations around the world.s
This file includes: For Top Companies, It’s Full Steam Ahead, Wireless-Power Market to Surge in 2015, The Methodology Behind Our Survey, Technology Drives Growth at Avnet, and the Complete 1-50 List of the Top Distributors.
“Smart technology—it can’t be an afterthought,” said Zach Ceiley, vice president of sales and marketing for Bisco Industries, a California-based distributor that came in at No. 20 on this year’s Top 50, with sales of $136.8 million. Ceiley points to the proliferation of e-commerce and customers’ growing desire to transact business online as an important part of any distributor’s business strategy. “Making sure we’re ready to service that sector of the business community that chooses to interact with their suppliers that way—that’s important to us.”
View The 2015 Top 50 Distributors Full List Here
Bisco Industries is one of many companies in the Top 50 that are focused on making smart investments in business technology. As one example, Mouser Electronics, No. 10 on this year’s list with $907 million in sales, continues to develop its online presence by adding to its Applications and Technologies pages. These online resources are an important part of Mouser’s efforts to offer design engineers access to the latest product information, design resources, and application assistance. Mouser has 32 Applications and Technologies sites, three of which—Robotics Technology, Security Applications, and Open Source Hardware—were added in the last year.
Avnet, No. 1 on the 2015 Top 50 with $28.12 billion in sales, is also a leader in technology investment. In an interview earlier this year, Gerry Fay, president of Avnet Electronics Marketing Global, told Global Purchasing that the distributor continues to make investments to become a “world-class digitized business.” Chief among those efforts is targeted marketing and making it easier for customers to do any business they do with Avnet live, online as well. The distributor also plans to make more engineering resources available online in the future.
Technology also plays a key role at America II Electronics, which came in at No. 14 on this year’s list, with $250 million in sales. America II is undergoing a key strategy shift, adding franchised distribution lines to its traditional business of supplying obsolete and hard-to-find parts. The expansion is part of an effort to become an even more service-oriented business, with the ability to meet customers’ wide-ranging inventory needs. America II has added franchised lines at a fast clip in the last few years, and technology has been at the forefront of this business shift, according to company President Brian Ellison.
“All in all, our focus is on systems capability, process flows, sourcing capabilities, and personnel so that we can create a platform to add franchised lines and have the ability to adequately support customers,” Ellison explained, adding that the company needed the right technology in place to support its growth plan. “Being able to increase the ability for the warehouse, logistics, sales, and purchasing [teams] to do their jobs [required an] across-the-board approach to new systems and software. We were ready to grow, we knew how to do it—we just needed the systems that could accommodate it.”
Such plans have translated into steady business increases for the top distributors despite today’s challenging marketplace. Of the top 10 companies that returned to the list this year, the average sales increase over 2014 is about 7.5%. Some of the largest increases include N.F. Smith, at No. 12 with $747 million in sales, which reported a 27% sales increase over 2014. The growth is not due to acquisition, but to organic increases driven by a commitment to customer service, Smith’s leaders say. TTI Inc., No. 7 with $1.95 billion in sales, saw a 16% increase, while Digi-Key, No. 8 with $1.76 billion in sales, saw a 13% increase over 2014. The top three distributors on our list—Avnet, Arrow, and WPG Holdings—saw an average 7% sales increase over last year.
More Feet on the Street
Although technology investment is key, so is personnel. Many of the Top 50 are also focused on expanding their sales and customer-service networks worldwide. This plays into the desire to serve customers in whatever way they want to be served, and to always have a local service option. As part of its expansion plans, America II has added to its sales, sourcing, and management teams around the world in the last year, for instance. The distributor moved to larger offices in the UK to allow for expansion, adding mostly salespeople to serve local customers as well as customers elsewhere in Europe. Ellison says the company added to its global sourcing team in China and increased its sales headcount in North America by 45%. In Latin America, the distributor has added about nine sales reps; based in Mexico, they will help develop business throughout the region.
“In the same time frame, we brought in a regional director for Latin America,” Ellison added, noting that long-term growth is the underlying reason for all the personnel investments. “We need to be able to have the resources in place so that we can touch more customers and be able to service more accounts.”
Bisco Industries has similar goals. Ceiley points to the balance required between technology and human resources, noting that Bisco focuses on maximizing its “face time” with customers as a way to differentiate itself in the marketplace. Vendor reduction is an ongoing trend among OEMs, prime contractors, and subcontractors, Ceiley explains, making it even more important for suppliers to develop strong relationships based on service.
“Relationships continue to be very key,” he explained, pointing to changes in purchasing behavior that are being driven by technology. “Ten years ago I could pick up the phone and get almost any buyer right away. Things have changed. There’s more of a disconnect now in the way that purchasing is done, with emerging technologies. We are leaning on traditional face-to-face contact to continue our growth.”
View The 2015 Top 50 Distributors Full List Here
It helps to have well-established vendor-managed inventory programs and other services those customers need. It also helps to have an expanded footprint across North America. Ceiley says Bisco is opening two new facilities per year, with plans to open a new distribution center as well.
“We have a local presence business model—and it’s stronger today than it has been,” Ceiley said. “That [increased] footprint has been a key for us to remain on a lot of customers’ approved vendor lists—because they do want local support, especially in terms of VMI.”
Like others in the Top 50, Ceiley said he expects 2015 to be another good year, with between 8% and 12% sales growth.
“There’s a lot of market out there,” he noted. “Just a huge amount of market for us to go after.”
This file includes: For Top Companies, It’s Full Steam Ahead, Wireless-Power Market to Surge in 2015, The Methodology Behind Our Survey, Technology Drives Growth at Avnet, and the Complete 1-50 List of the Top Distributors.
The Top 50 Electronics Distributors 2015:
1. Avnet Inc.
2. Arrow Electronics
3. WPG Holdings Ltd.
4. Future Electronics
5. Macnica Inc.
6. Electrocomponents Plc/allied Electronics
7. TTI Inc.
8. Digi-Key Corp.
9. Newark/element14
10. Mouser Electronics
11. Rutronik Elektronische Bauelemente Gmbh
12. N.F. Smith & Associates
13. DAC/Heilind
14. Fusion Worldwide
15. America Ii Electronics
16. Sager Electronics
17. PEI-Genesis
18. Master Electronics
19. Rebound Technology Group Holdings Ltd.
20. Bisco Industries Inc.
21. Powell Electronics
22. Classic Components Corp.
23. Flame Enterprises
24. Electro Enterprises Inc.
25. Steven Engineering Inc.
26. RFMW Ltd.
27. Beyond Components Inc.
28. Hughes Peters
29. Phoenics Electronics
30. Symmetry Electronics Corp.
31. Edge Electronics
32. Marsh Electronics
33. IBS Electronics Inc.
34. NRC Electronics
35. Crestwood Technology Group
36. Arco Inc.
37. Hammond Electronics Inc.
38. Air Electro Inc.
39. March Electronics
40. Diverse Electronics
41. PUI
42. House Of Batteries
43. Kensington Electronics
44. Gopher Electronics
45. Area 51 ESG
46. Cumberland Electronics Strategic Supply Solutions
47. CTrends
48. 4 Star Electronics
49. Components Center
50. Marine Air Supply
