Brokers vs independent distributors image showing facts vs myths

Brokers vs independent distributors – dispelling the myths

Are the terms “broker” and “independent distributor” actually interchangeable? Let’s dispel this myth.

Brokers vs independent distributors: are they the same thing or not? This is a long-debated issue in the electronic components distribution channel. Brokers are in the numbers game and try to exploit any opportunity that presents itself – they are not concerned with building long-term business relationships, but are always looking for the next quick deal with the opportunity for good margins.

"On the other hand, professional independent distributors (also called wholesalers) are experts in the electronic components industry".

Often erroneously called brokers, they are the higher evolution of brokers and are committed to securing regular and reliable sources of authentic supplies to fulfill their customers’ requirements and to collaborating with their customers over the long term.

Twin spike in demand

The Covid-19 pandemic triggered an unusually high surge in demand for top-end electronic components as people scrambled to buy phones and computers to enable them to work remotely, or smart TVs to help them while away the hours at home that would otherwise have been spent socializing.

At the same time, large-scale consumers of older tried-and-tested components, like the automotive sector, stopped their standing orders and halted their just-in-time production lines as the world locked down, only to find that their chip suppliers then pivoted their own production lines to meet the mushrooming demand for newer, more profitable components.

As a result, these sectors then had to scramble to source these older, and even obsolete models of electronic components, which are nonetheless an essential part of today’s creature-comforts or security features in modern cars.

This twin spike in demand triggered a wild expansion of the industry with the introduction of many new players onto the market who, motivated by thoughts of quick and easy profit, began to supply refurbished, rebadged and even fake or counterfeit components. For example, many Chinese operators begin trying to win business by offering lower-priced microchips, transistors and transformers that were frequently entirely counterfeit.

"We also saw the sudden appearance of myriads of fly-by-night brokers and dealers, trying to cash in on the desperation of manufacturers as they scrambled to source the components they needed to complete their products and get them off the shop floors".

Since their regular suppliers were unable to meet their demand they were forced to consider the question: Do we turn to brokers vs independent distributors to solve our problems?

Avoid being swindled by choosing a partner with a proven track record

Many manufacturers found themselves dealing with brokers and dealers and independent distributors for the first time and, unfortunately, a great number of them got badly burnt. The only way to avoid being swindled when buying products in an industry as competitive as electronics is to work with a reputable and trustworthy independent distributor with a proven track record.

In the event of any problems, a professional independent distributor supports the customer and helps resolve the problem. In addition, at Electronic Partner, we make it a practice to provide our customers with all the latest market intelligence to enable you to negotiate a better deal with your existing suppliers if we cannot satisfy your requirements: in this way, you are never left without assistance.

Would you like to establish a solid and long-term partnership of trust with us – or would you rather go it alone?

Contact us and put us to the test!

Partner with us

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