What’s the difference between an independent distributor and a broker?
In the electronic components industry, independent distributors and brokers are both instrumental in helping OEMs and manufacturers secure obsolete and end-of-life parts that franchise distributors cannot. While independent distributors and brokers both have the same goal in mind (or have the same essential function)—that is, to help buyers and sellers find each other—this is where the similarities end.
The value a broker offers is procuring electronic parts when needed, but they typically lack in providing other services, such as a comprehensive quality inspection process, discrepancy checks, and visibility to existing market conditions. However, an independent electronic components distributor’s scope of services extends far beyond just a commodity transaction.
Get to Know Your Supplier
A broker can be defined as a small firm or an individual with a limited supply of parts/inventory. A broker’s place of business can range anywhere from a garage/basement to a 5,000-square-foot facility, but this minor detail is not always readily disclosed or known to the manufacturer/customer buying the parts.
An independent distributor can also be defined as an established firm, but may offer a larger facility with additional resources such as a global network, quality control/inspection process, excess inventory management, and market intelligence to provide extended services prior, during, and immediately after the transaction. An independent distributor can invest in these additional resources, whereas a broker may not have the capital or real estate to offer them at all.
So what does an independent distributor have that a broker may not?
An independent distributor can provide valuable insight into what is going on in the marketplace. Whether the customer is facing a shortage, obsolescence or a needs to manage surplus inventory, commodity managers can assist the customer in making a long-term, educated decision based on changing market conditions. This decision can ultimately equal cost savings and reduced risk in the supply chain.
Q360 Quality Management
An independent distributor can offer a rigorous quality inspection process utilizing the latest state-of-the-art testing equipment, trained and certified component inspectors/engineers, and a vendor management program to ensure the authenticity of each component being received.
An independent distributor can have facilities strategically located around the world, with an established global logistics infrastructure and integrated systems that can provide a range of services—from warehousing to packing and shipping for customers.
High Industry Standards
Independent distributors are typically required or expected to adhere to more stringent industry standards. Therefore, most belong to some type of trade industry organization, such as the Independent Distributors of Electronics Association (IDEA), and hold certifications, such as AS6081, ISO 9001, OHSAS 18001, and ANSI ESD S20.20.
Since independent distributors offer more resources than brokers, they can also provide a higher degree of certainty for their customers that brokers cannot. An independent electronic components distributor will stand by the product or shipment if there ever is a problem or discrepancy and will be there to remedy the issue.