buying components from manufacturers

Buying Electronic Components Directly From a Manufacturer: Pros and Cons

by Nicolette Emmino

Typically, there are three main ways organizations can purchase electronic components: through a manufacturer, a distributor, or an agent/broker.

Let’s explore the pros and cons of each. Here we will dive into the route of buying directly from a manufacturer, but be sure to follow this series for a dive into the other procurement methods, as well.

Each method comes along with its own risks. For example, if you’re buying directly from a manufacturer, you may reduce the risk of counterfeit components, even though that’s a risk that is never eliminated completely.

Electronic manufacturers handle the design and branding of their devices. They thoroughly understand the market and release new products and eliminate others after examining demand. This process of phasing out products requires good communication with the Original Equipment Manufacturers (OEMs) since they can encounter significant obsolescence issues.

Manufacturers sell components either directly to end-users or through authorized distributors. Buying directly from the manufacturer is the most direct option, but it’s not always feasible because manufacturers sometimes require bulk purchases and spend. If you cannot purchase directly because of this hurdle, your next option would be to purchase via an authorized distributor.

However, if the circumstances allow you to deal with a manufacturer directly, you will reap the benefits of shorter supply routes, some technical support, and a lower risk of counterfeiting since manufacturers can trace the parts back.

One last note worth mentioning about purchasing directly, though. If you are a smaller company, you may risk delays and disruptions since distributors may take precedence over your company in terms of allocation.

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