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How to screen an independent distributor

Evaluating whether to work with an independent distributor that is new to you and determining how to screen them are becoming increasingly common considerations in the electronics sector.

Until a few decades ago, buyers and their suppliers were linked by both business and friendship. As a result and once consolidated, these relationships went beyond decisions being based on purchase prices because there was trust between the parties.

In the electronics sector today, this situation has changed. The large number of distributors crowding the market on the one hand and the presence of independent distributors alongside official ones on the other, has motivated many purchasing departments to try new acquisition strategies in the hope of securing better prices, guaranteed supply or reliable delivery dates.

What steps should you follow when trying a new independent distributor?

The first step is to interview him and request the details of references from its customers and suppliers. You should then interview a number of these references.

The interviews allow you to understand more about the distributor’s abilities, values, methods and approach to its customers and its suppliers.

If you receive satisfactory reports from these references, you can move onto requesting a proof of supply. For instance, you could ask the independent distributor for a quantity of a specific electronic component, such as the  Amphenol FCi 55510 and then measure their performance on the request. It is essential, however, to inform the distributor that the delivery of these components will function as proof of supply – this advises the distributor that you are actively testing the relationship.

Adopting a proof of supply approach with independent distributors for a quantity of electronic components is an important test case that allows you to further understand their abilities, values, methods and approach. Together with the interviews, the test case allows you to assess in advance the areas in which the distributor forms best, and those in which it performs least in order to conduct a thorough supplier screening process.

Payment terms: how should you pay for the test case supply?

Paying the independent distributor for the delivery of the ordered quantity of FCi 55510 (Amphenol) is a telling moment. The best solution is obviously always to aim for payment post delivery, however, if that is not feasible it may be necessary to find an intermediary to protect both parties.

Using intermediaries – such as escrow agencies – for payment provides both parties with a guarantor of their money. In addition, the use of such a guarantor means that the customer need only settle the invoice after effectively verifying the quality of the delivered goods while the supplier has certainty that the merchandise will either be returned unopened, or will be paid for as initially agreed.

Testing an independent distributor can allow companies to save costs thereby obtaining an economic advantage, while also allowing them a low risk way to discover a new trustworthy supplier that may indeed offer greater guarantees in the long term.

The team at Electronic Partner is ready and available to respond to any requests – we invite you to view testimonials we have already received. We are also ready and willing to advise you and to participate in a test case with a view to establishing a long and mutually rewarding relationship with you.

If you are ready to evaluate new partners, we are ready to welcome you among our clients.

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