Franchised / Authorized Distributors Vs. Brokers
The Semi Dice SENTINEL Information for the Microelectronics Industry Spring 2002 Volume 11 Number 2
Spring 2002 We would like to share a couple of situations that have come to light. Both true stories, told by two different sources.
One of our customers had a DESC auditor in-house conducting an audit for class “K” certification. The customer received a “ding” for purchasing product from a “non-franchised/non-authorized distributor.”
Another situation involves one of our major suppliers. They said a customer called them recently and wanted to return product for a quality reasons. Initially, the supplier said, “Fine, but you should be dealing with the die distributor. Who did you purchase the product from?” After the customer gave the name, our supplier’s response was, “That’s not one of our authorized distributors. We can’t take that product back. You bought it from an unauthorized source. We have no idea where the broker got it from, how it was stored or if it’s even our product.
Some component manufacturers have very strict rules and guidelines regarding franchised/authorized distributors. They will not knowingly sell to brokers. These are the types of manufacturers that make up the majority of our line card. Yet, other manufacturers will sell to any and all comers.
The lines that Semi Dice are franchised/authorized to handle have confidence that we know how to handle, store, test and promote their products. It is not easy to get the major lines. The process in securing a line can take years. The longest it took for us to win a major line was over seven years!
The manufacturers place trust and confidence in us to handle their products. They (and we) back the quality of the product, so that you can rest easy. But there is another reason to buy through legitimate channels.
Factory sales/local reps are compensated on distributor sales. Legitimate distributors supply monthly POS (Point of Sales) reports to the manufacturers every month. By doing so, the sales rep responsible for the sales gets the credit. Remember the sales person/engineer who helped your engineers with the design-in?
Those are the guys. They get compensated on POS information supplied by the distributor.
Brokers, on the other hand, are not authorized and do not supply POS information to the manufacturer. This means, the sales person/engineer who helped with the design-in does not get compensates for the sale. If that doesn’t seem right, that’s because it’s not.
If your company is using brokers and not legitimate distributors, your company could be taking unnecessary risks with product quality and denying compensation to the proper salesperson.
If you ask a broker if they are franchised or authorized to supply product from a particular manufacturer, most likely they will say “yes.” That is not always true. If you are in doubt, there are two things you can do. The first is to call and ask the manufacturer. The second is to call Semi Dice. If the manufacturer is on our line card, we are either franchised or authorized to handle that manufacturer’s product. We will be happy to tell which of our legitimate competitors is also franchised/authorized for a particular line. We continue to strive towards being a good, helpful supplier.