For nearly a decade now, I’ve been in the electronic components industry searching the globe for obsolete & long lead-time parts on behalf of my clients. One common thread shared by every single one of my clients and prospects, no matter how big or small the company, what continent they are headquartered on, or how long they have been in business: they have all, at some point, been burned by a bad “broker.” (And, I personally hate the word “broker” for this very reason — it tends to have a stigma to it, which is totally deserved & also why my blog title says “Independent Distributor” -sounds better huh?!) I hear the horror stories all the time. It could be that they were promised delivery & then strung along for days or even weeks with little communication & without ever actually receiving the parts that their production team was so desperately relying on. Or, worse yet, they did receive some parts, which looked good enough to pass their internal QC inspection – only to go populate their boards & have massive failure rates. Sometimes these boards even make it out to the field which causes tens of thousands of dollars in damages (if not much more) & the immeasurable cost of lost clients & sullied reputation.
In a perfect world, my clients would be able to get all of their parts directly from the manufacturer or a franchised distributor. (Although, in this so-called “perfect” world, I would be out of a job, but that is besides the point!!) The real point is: due to the nature of the electronics manufacturing business & because of how projections are made by semiconductor manufacturers & the fact that technology becomes obsolete & superseded at the speed of light: procuring parts from outside these “authorized” distribution channels is a necessary evil!
What are some things that you, the buyer, can do to help protect your company & yourself from falling prey to one of these bad brokers? Well, I could save you the time & trouble of reading the rest of this post & just suggest you buy all your material from SolTec Electronics, but I guess that wouldn’t be very objective of me, huh? BUT, in all honestly, we truly care about or clients & practice due diligence to protect them from receiving sub-par materials. We also know you are going to be shopping around, as most buyers are required to & there will be some cases where we can’t find the parts you need. In these instances, we want to make sure you are protected!
So, without further ado, here are some of my top tips for picking a good independent/broker:
1) Ask lots of questions! Mainly, where are they procuring the parts from & what is their policy for accepting vendors onto the AVL? If they are unable or unwilling to share this information, that is a red flag!! Also, if they quote a 10 day lead-time, yet claim the parts are coming from a source in the US or Europe, I would ask more questions. While, in some instances, that could be the case, it would seem more likely they are coming from the high-counterfeit potential region of Shenzhen, China, which is also a huge red flag!! A lot of brokers will try to get away with “fast ones.” A buyer that asks a lot of questions & puts it right out there that they are the “no-nonsense” type & will not accept junk from China has a better chance of deterring these types of vendors right off the bat. Let them know that you will report them to government agencies if counterfeits are shipped. This will actually scare some bad vendors away & have them magically tell you “sorry, parts are sold.” This method is so easy & surprisingly effective.
2) Ask for a copy of their quality manual. Again, if they are unwilling to share this information, you should be very wary of sending any orders to them. A good quality manual will have a 40+ step inspection process that covers all the basics & includes inspection with high-powered microscope & a chemical permanency test. While the information contained in a QC manual is often considered “proprietary” information, as a potential client to that company, you have a right to know their procedures & should feel free to tell them so.
3) Ask about their return & warranty policy & try to get net terms . A reputable vendor will always stand behind their product. Most vendors only offer a 30 day warranty period, which seems to be industry standard. However, a good vendor will still support their client for far longer if there is evidence to support that they shipped bad parts. A bad broker will leave you high & dry on day 31 or fight with you about giving an RMA when there is clear evidence that they shipped bad parts. Or, they will demand payment in advance, no matter how good your company credit is. If they are not willing to offer some sort of guarantee or net terms, then run far away!! At the very least, try to get some sort of Escrow agreement so that you have an opportunity to inspect the parts prior to funds being released. Otherwise, you might never see that money again.
4) Ask for testimonials & references. If they can’t produce any, there is probably a very good reason!! Be extremely wary!! If they do send these, pick up the phone & follow up on them. Ask the reference how many orders they have placed with the vendor, if all of the parts were received on-time & authentic, and if they would do business with the vendor again. If their references only did one or two small deals and/or can’t give you a rave review, this should be a huge red flag!! They provided the names, after all. This means they have no clients that will rave about them because they are probably no good!!
5) A good broker will align themselves with agencies in the industry such as SMTA, IDEA, ERAI, etc. Ask about their affiliations. Beware that the ERAI will let just about anybody join, if they pay membership, BUT, you can also become a member & search their database to see if a particular broker has been reported for selling sub-par materials. The SMTA is a group of high-tech quality-minded individuals, and IDEA has very strict membership requirements, including audits of a vendors warehouse. All good ones to be aligned with.
6) Ask about certifications. As a minimum, a good independent will be ISO:9001 compliant, which means they have a well-documented quality control system in place & actually use it all the time. In addition, ESD20.20 is a good certification as it addresses electrostatic & proper-storage issues. Sensitive components that have not been stored properly can open you up to a world of trouble. For Aerospace clients, the AS9100 quality standardization is also very important. Ask to see copies of these certs.
7) Ask about what type of testing services they offer, in addition to just visual inspection. Counterfeiters are always evolving & visual test alone will not catch all bad parts. A good independent will have the ability to perform in-house decapsulation & electrical testing to confirm authenticity of parts. They might also have X-Ray machines, Sam, and other high-tech equipment that is highly effective in detecting counterfeits. The more equipment & testing capabilities they have in-house, the better shot you have of procuring high-quality materials from them. Beware that some brokers will list capabilities on their web-site, but do not actually offer them in-house, which is much more costly to the end-user & also takes a lot longer for test results. Plus, if they are misrepresenting themselves as having them in-house, that is obviously a sign of a questionable vendor.
8 ) If it sounds too good to be true, than it probably is!! For the most part, with some exceptions, most brokers have access to the same suppliers & parts. If your usual good vendors cannot find the parts & then somebody else miraculous finds them out of the blue – proceed with extreme caution! Chances are, they are no good.
9) Request some photos of the parts & the label. This is good for two reasons. One is that it will help determine if they actually have or can actually get the parts. If they really want & deserve your business, a good vendor will send somebody out to the warehouse or beg their vendor to send somebody out & get the photos you need. The second reason is you can possibly pick up some non-conformance issues in the photo & save the time & hassle of parts actually being shipped. Some things to look out for: correct part markings, correct packaging type, “orange-peel” texture on the surface of the part, which is a sign of sanding & remarking, and a authentic bar code, which you can determine with a very inexpensive scanner. Again – simple & effective.
10) Last, but not least: when you find a good vendor – hang on to them. The market is flooded with brokers that want to make a quick buck & good ones can be hard to find!
I am the CEO of SolTec Electronics, and we walk the talk! We are happy to share our AVL policy, copies of our quality procedures, a long list of client testimonials, certifications & group memberships. We offer in-house decapsulation & electrical testing & have an RMA rate less than 1%!
I hope this information has been helpful! Please feel free to share your stories and perspective with us via the comments section below!! Or, you can also feel free to reach out to me directly. Happy part hunting. Be careful out there & know we are here for you!
All the Best,
© 2011 SOLTEC ™ Electronics, LLC (a Florida Limited Liability Company). ALL RIGHTS RESERVED. This material may not be reproduced in any form whatsoever without express written consent of SOLTEC. SOLTEC monitors and vigorously enforces their rights to SOLTEC-owned intellectual property, including but not limited to the contents of this article.