In the world of electronics manufacturing and distribution, electronic component brokers play a crucial role in connecting manufacturers with the right components they need to bring their products to market. These brokers are experts in sourcing and supplying hard-to-find or obsolete electronic components, and they have access to a vast network of suppliers and manufacturers around the world. Due to the sometimes opaque nature of how they operate, though, they can be difficult to work with – and the broker market is a minefield of counterfeit and poor-quality parts.
Whether you're a small startup looking for components in small quantities or a large manufacturer in need of a steady supply of parts, an electronic component broker can help you navigate the complex supply chain and find the components you need to keep your production lines running smoothly. In this blog post, we'll explore the role of electronic component brokers and provide advice for how to get the most out of the secondary market while avoiding its pitfalls.
First, a quick word about Amplio – our PartSecure service specializes in finding out-of-stock parts for manufacturers by navigating brokers on our clients’ behalf. If you’ve struggled with brokers in the past, leave the headaches behind and let us handle it.
What is a broker for electronics components?
An electronic component broker is a specialized middleman that connects manufacturers and buyers with the electronic components they need. They step in to fill gaps in the market, and they’re most used when authorized distributors are out of stock of a certain component. When that happens, brokers often either will have the part available, or will be able to connect buyers with non-authorized sellers that have excess inventory.
They work with a variety of suppliers and manufacturers to ensure that their clients get the best possible deal on the components they need – but given that the component in question is often hard to find, the price is much higher than the price through authorized channels. Additionally, brokers can also help to mitigate the risks associated with supply chain disruptions by providing access to a wide range of alternative sources for components. By leveraging their expertise and extensive network of contacts, electronic component brokers offer a valuable service to the electronics industry that can help to ensure the success of both small and large-scale manufacturing operations.
What’s the best site to buy electronic components in the USA?
When you’re looking to buy electronic components, you’ll likely start with authorized distributors. Big ones in the United States include Digi-Key, Mouser, Newark, and Arrow Electronics. Whenever you can buy from authorized distributors, we recommend that you do so – but if you’re looking to learn more about brokers, then you’re likely facing a shortage and can’t buy from where you normally do.
There are a huge number of electronic component brokers, and they tend to be smaller than the authorized distributors. They all build their own supply networks, so they have access to different inventory. You can’t just rely on one to get the job done for you; often, you’ll need to contact many in order to find the right part.
A few examples of brokers are Winsource, Utmel, and A2 Global. When you need hard-to-find components, they’re good places to start. We recommend that you read the next section, though, for advice on how to navigate electronic component brokers. Or better yet, work with our PartSecure service. We know the tips and tricks because working with brokers is one of our core services. Don’t leave your production schedule to chance; work with us, and you’ll get the out-of-stock components you need at a trusted quality and transparent price.
Advice on how to navigate electronic component brokers
It’s not easy to work with brokers, and procurement teams have more to worry about than dramatically increased costs. It can be difficult to figure out where exactly the components are coming from, which raises questions about their age, quality, and even whether they’re counterfeits. It can be incredibly frustrating to see that a broker has inventory at a certain price on a search tool like Octopart, only to get in touch with them to learn that they don’t have the amount of inventory listed or that they’re quoting you double the price. It’s enough to drive a procurement team crazy.
Here are a few tips that we’ve learned from our extensive experience navigating the secondary market on behalf of our clients:
1. Don’t rush to the lowest-cost option
The better the deal seems, the more likely it is that there’s a catch. Often, the best-priced broker inventory will be for old parts, parts that aren’t quality-controlled, or counterfeits. While you occasionally can find parts at prices that aren’t too inflated from what you’d pay from an authorized distributor, you need to recognize that good deals from brokers are few and far between.
Prepare to pay a premium to resolve a difficult shortage. You’ll do so because keeping the business moving is much more important than never paying a high price for components. Looking for deals from brokers can often lead to worse problems than a shortage, like defective components that lead to defective finished goods.
2. Expect listed price and inventory levels to be wrong
Brokers often don’t keep inventory on their own shelves; they instead know where inventory is and can connect you to the source, acting as a middleman. Because of this, they can’t provide exact quantity and price information to the market – they don’t have the inventory, after all. They have some level of access and insight, which feeds their claim that they can supply the component, but exact data is uncertain.
You should treat quantity and price information from brokers as a “Yes/No” field that indicates that they have inventory. If they report quantity and price information, then they can likely fulfill an order, but you need to reach out directly to the broker for a quote for the quantity you need. Nine times out of ten, the price for an exact quantity at a quote will be far off what they originally listed.
When you see that a broker has inventory, that’s the start of the process, not the end – you should reach out immediately for a quote for the quantity that you need.
3. Act decisively
Don’t wait to reach out for a quote from brokers – they sometimes all have access to the same pool of inventory, and thus the quantity you might think exists in the market is an order of magnitude larger than what actually exists. Finding components in shortage situations is a zero-sum game, and you don’t want to be beaten to the punch by another manufacturer. As soon as you locate potential inventory, reach out for a quote from the broker.
Be careful not to reach out to too many brokers at once, though. Since they’re often all accessing the same source of inventory, if multiple brokers all are in on the same deal, they might bid against one another, driving up the price. If you’re the only buyer, then you’ve essentially engaged in a price war against yourself. It’s better to work with a few trusted brokers than to approach many of them at once.
The most critical part is what happens next: if you receive a satisfactory quote for trusted parts, execute it immediately. Prices change extremely quickly in the secondary market, and usually for the worse.
Buyers that wait a day or two to approve a PO from a broker might be surprised to see the price double in the intervening time period. They can still resolve the shortage, but depending on the quantity of components procured, the total cost is tens or even hundreds of thousands of dollars more expensive than it could have been.
When you make the decision to go into the secondary market, be mentally prepared for quotes to come in high and to execute on them quickly. Broker prices are high, but the price of indecision is even higher.
4. Build a list of trusted brokers
Ideally, procurement teams don’t have to go to the secondary market often enough to build trusted relationships with brokers. Since COVID hit, though, shortages and delays are up to the point where many purchasing teams have had to tap brokers repeatedly to resolve shortages.
There’s a wide variety of brokers in the market, and some have earned the trust of electronics manufacturers. Here’s what to look for: your broker should openly report the date codes of the components, offer quality tests, and guarantee functionality. With this information and guarantees in hand, you can make decisions on components from the secondary market more confidently.
At Amplio, we solve component shortages for a wide array of clients. The upshot is that since we do it day in and day out, we’ve had the opportunity to build strong relationships with the best brokers in the electronics market. Our individual clients don’t need to resolve shortages enough to warrant getting to know brokers, but it’s one of our core competencies. We only work with brokers that provide us with quality-tested, date-assured, guaranteed parts.
Get out-of-stock parts without the hassle of electronic component brokers
Navigating the secondary market of brokers is a minefield of opaque pricing, vanishing inventory, poor quality, counterfeits, and headaches.
Instead of trying to do it yourself, let Amplio’s PartSecure service find components like for you.
We’re the first VC-backed electronic marketplace specializing in hard-to-find parts. With 200+ vetted suppliers & OEMs, quality & counterfeit protection, and price transparency, you can rest easy when we’re on the case.
We’ll get you a quote in 24 hours and keep production running. Contact us today.
