Advantages of the open market for electronic components
Are you considering purchasing parts already in circulation on the open market for electronic components instead of waiting on component lead times? Are you afraid or concerned about quality, reliability, or compatibility with your application? In today's article, our founder, Annie Maples, will provide you with some good reasons for considering the global marketplace, whether you're an entrepreneur starting a new venture or a seasoned professional looking for opportunities in supply chain efficiency. Do you want to read what we've discussed together? Keep reading!
What is the open market for electronic components?
It refers to the global marketplace where electronic components are bought and sold outside of direct manufacturer channels or specialized distributors. It includes various channels such as independent stocking distributors, oem excess availabilities and overstocks. In this market, buyers and sellers can trade a wide range of electronic components, including integrated circuits (ICs), capacitors, resistors, diodes, transistors, connectors, and more.
The importance of the global market
This marketplace often leads to more competitive pricing, aiding in cost mitigation strategies.
We spoke to our founder, Annie Maples, about this important topic and gained valuable insights.
“The advantages associated with the open market are much more significant compared to the risks” – Annie Maples
Annie, a common question that many people ask is if buying outside direct manufacturer channels involves risks. What can you tell us about it?
Yes, you should keep in mind that the global market can pose risks, such as counterfeit components or unreliable suppliers. That's why at PCE all parts are inspected according to the IDEA Std-1010-B standard. We carry out rigorous testing in our laboratory to ensure that the parts you receive, whether electronic or electromechanical components, are reliable.
Before we even arrive at incoming inspections, all suppliers must go through and are continuously monitored by PCE'S rigorous Approved Vendor List (AVL) screening process.
We perform on-site audits of our suppliers and can provide photos pre-import as well as our own QC report.
Upon receiving, all parts are inspected against the IDEA Std-1010-B.
PCE works with the best and most reliable suppliers for more than 20 years.
However, the advantages associated with the open market are much more significant compared to the risks.
Are there cost savings in buying parts via independent distributors ?
Absolutely, yes. For example, parts with a date code older than 3 years usually have great cost savings advantages. This may not be the case in hard-to-find and/or obsolete components, but for excess market stock, it’s an excellent way to find cost savings.
It has become common for buyers to require that parts be produced within the last two years. What are the drawbacks of limiting a purchase based on the date code?
Well, first and foremost it should be noted that parts with older date codes work just fine as long as they have been maintained properly according to Jedec guidelines. At PCE we work to make sure that parts have been stored properly; MSL1 parts with proper shielding bags and MSL2+ with correct moisture barrier bags, dessicant, humidity indicator cards and vacuum sealed. And of course, when in doubt, parts can be tested and baked via a third-party test house.
In fact, at PCE the oldest working parts that we have sold were produced in 1977, the year I was born.
Furthermore, limiting purchases to recent date codes includes drawbacks such as: increased costs, supply chain vulnerabilities, missed sustainability opportunities, and reduced flexibility in procurement practices.
Which do you consider to be one of the greatest advantages of the open market?
Sustainability is one of the greatest advantages. Parts sitting on the shelf and not being used for production is a major cost and issue for nearly every Oem. Simply buying and trading these parts that are readily available in stock defines sustainability, which is perhaps most relevant in today’s world.
How does PCE aim to address the challenges associated?
At PCE, we want to provide our clients and future clients with access to cost savings and quality. We have an in-house testing laboratory and extensive experience in buying on the open market for over 20 years since 2001. We can walk you through the process and ensure you can sleep easy knowing we've got you covered.
Learn more about our in-house testing laboratory here.
Feel confident buying in the open market with PCE!
PCE offers you the option that best suits your requirements, whether it is buying parts back from OEM excessand taking advantage of parts that are in stock or ordering new parts with a lead time. The term OEM refers to "Original Equipment Manufacturer".
Contact us and one of our experts will be happy to assist you!