While Avnet’s and Premier Farnell’s business models and their methods of going to market are very different, the discussion wasn’t about Avnet looking to achieve cost savings though greater efficiency of the combined operation, but rather about gaining access to an area of the market which it hadn’t been able to address previously – design engineers and the growing Maker Market.
“We want to build an ecosystem that spans the maker market, prototyping and mass scale production,” said Gerry Fay, global president, Avnet Electronics Marketing. “We want to help customers at every stage of the product lifecycle.”
It could be seen as a return to the demand creation model of 10 years ago and the importance of ‘getting down and dirty’ with your customers to better understand them.
Others saw the move as Avnet trying to gain greater traction in the European market at a time when larger Asian based authorised distributors are beginning to eye the West.
So, while most distributors were talking about the two extremes of electronics distribution – Tiers 1s and design engineers – another, America II, believes it is addressing successfully a part of the market that appears to have been overlooked.
“Our target is the mid-tier,” explains Brian Ellison, the company’s president. “We saw at electronica a real desire for better levels of service from suppliers and manufacturers who operate in this space. We believe the mid-tier is seriously underserved; when working with larger distributors, manufacturers often find themselves lower down the linecard and their products not being promoted.
“We had more than 400 visitors to our stand at electronica and that suggests to me that there’s big gap to be filled. It’s not without its challenges, but I don’t feel that, at the moment, there’s a real sense of competition. Eventually, the industry will wake up and see its potential, but that’s yet to happen.”
Even specialist distributors aren’t addressing the mid-tiers, Ellison believes. “Specialist distributors tend to focus on two, maybe three, sectors and on aerospace and military in particular. We rarely compete directly with them and, if we do, we focus on our broader offer and the suite of products and services we can provide.”
Over the past two years, America II has looked to evolve and now offers a radically expanded portfolio of programmes and services.
“Our approach looks to address the needs of the middle tier,” Ellison explains. “Alongside our core distribution business, we are now offering product design services, custom product manufacturing, factory level failure analysis and PCB design and manufacturing. We’ve certainly added to our global franchise and manufacturer lines, which now features more than 400.”
Distribution is evolving and the competitors of the past are no longer around in many cases, Ellison says.
“A list of the top 10 distributors looks very different today than it did 10 years ago. There’s been consolidation, although I’m not sure how much more we’ll see in the years ahead. Competitors who have been squeezed out of the market are those that have failed to adapt or respond to changes in the broader market,” he concludes.
