Independent Distribution—The Past 30 Years
I remember my first broker deal, it was more than thirty years ago. I met my supplier in 1976 at the Trenton Computer Festival (view slide show) in Ewing, New Jersey. He was standing on the pavement of the "outdoor flea market" section in the Trenton State College parking lot. Eight fold-up tables were arranged in the shape of the letter U with a tent-style canvas roof stretching from poles surrounding the tables to a white 1975 Dodge van. It seemed like hundreds of boxes, each filled with different electronic components, were neatly arranged on the table as if they were pieces to a jigsaw puzzle. There was everything from ICs to connectors. Connectors! I noticed a connector made by a company named AMP that I knew very well. I knew someone who was looking for this very same connector since they were discontinued by the manufacturer. I picked it up to examine more closely.
A smiling light-haired man, wearing glasses, blue jeans, tennis shoes, and a beard approached and asked if he could render assistance. He explained that he has a relationship with a local OEM who sells him excess inventory. The connector appeared to be in perfect condition so I put the entire box inside my backpack, paid the man, and then walked away. My customer was delighted that he would not need to redesign his product, reordered several times, and I had found my first “open market” supplier.
My little blue book of suppliers continued to grow as I attended events each year where surplus dealers would gather. Las Vegas became a favorite place to find new suppliers as many of the electronics surplus dealers of the time would meet to set up a table at the ASD/AMD show. Many of the dealers wanted to meet before the show so they started meeting at a bar described as a “horseshoe shaped” bar at the Las Vegas Hilton. Although the bar wasn't’t really shaped like a horseshoe at all, and employees of the Hilton only knew it as the Crystal Bar, to this day you’ll hear old-timers talk about meeting in the Hilton at the “Horseshoe Bar”.
The ASD show, as it was called, was primarily sponsored by the American Surplus Dealers. It wasn't’t a show for electronic components at all, but every year it seemed that at least a handful of suppliers managed to attend. I remember walking through the Sands Convention Center and finding guys selling electronic components between the army boots and 14 karat gold jewelry! Many would hang samples of components that they wanted to sell from hooks in a pegboard in small plastic bags. A number was usually written on each bag to tell how many pieces the surplus dealer had in stock. Quality Control, as we know it today, was virtually non-existent. There were however, smiling faces and familiar company names there year after year. This face-to-face contact promoted “mostly” ethical behavior as the industry was small. They were called “the Surplus Dealers” and “the Electronics Guys”, but these were the pioneers of what today we call the independent distribution industry.
That was thirty years ago and this is today, and dramatic changes have swept through our industry since the first TCF computer show and outdoor flea market. Companies who once worked out of vans in parking lots now deploy cutting-edge inspection processes and techniques that set quality and leadership standards for the entire industry. The electronic manufacturing industry recognizes that Independent Distributors play a vital role in the supply channel. Many Independent Distributors are recognized as excellent companies who can be depended upon to ship authentic and reliable product that can be trusted to provide components used in the critical flight system of an aircraft or to launch a spacecraft into orbit.
The popularity of the Internet, however, and the rise of Internet Part Search Engines (IPSEs), has changed the dynamics of the open market. These IPSEs provide a means for companies to advertise inventory to thousands of buyers without the face-to-face contact that promotes moral behavior. Seemingly overnight, a new age of companies was born, but unfortunately, many were not quality or ethically oriented. Others simply didn't’t have the knowledge or the experience to handle and store components properly.
Buyers searching these IPSEs have little trouble finding companies advertising inventory, but often there was no way to tell which companies could be trusted. There were so many new companies and all the names started to sound the same. Bad companies would provide used and abused, or counterfeit product, and then disappear when you tried to get your money back. The industry greatly needed a way to distinguish the quality and ethical supplier from the rest.
I first joined the Independent Distributors of Electronics Association (IDEA) more than five years ago. At that time IDEA was not much more than a group of quality and ethically minded companies with ISO certifications. While founding members represented some of the better companies in the industry there were still many very good companies who had not yet become members. I knew it would take time for the industry to distinguish IDEA companies from the rest of the pack.
Today, I’m proud to say that time has come, and that PC Components has been actively involved in IDEA since the early days of its development. The industry understands that IDEA is an organization that takes much more than the willingness to pay a membership fee to join. To become a member a company needs to have the systems in place to handle, store, and sell electronic components in the way that OEM and EMS providers expect.
Times have changed and a new age of distribution, the IDEA channel of distribution, has arrived. There’s no doubt that there are many good companies who are still not IDEA members, but when you see that a company is a member of IDEA you’ll know that the company is within the cream of the crop.
P. Steve Calabria
President of PC Components