Arrow Electronics is planning its biggest move into the online distribution business.
“Our goal is that wherever electronic components are being purchased then we want to be there,” Mike Long, Arrow CEO told Electronics Weekly.
Long was speaking on the same day that Arrow launched a bid to acquire Japan-based online small order component distributor, Chip One Stop.
Chip One Stop has more than 100,000 web customers in Japan from more than 36,600 companies and 99% of its orders are received via the Internet.
This would represent Arrow’s most direct move into the online sales business, but Long believes the distributor has the skills to expand its own business into this area.
“We already have a majority of the skills needed to move in that direction,” said Long.
“Now is the time to put skills into operation,” said Long.
Long’s plans for Arrow’s Internet business are growing fast in scale and importance.
“We still need a better build-out on the sales side of the Internet, we need an expansion of sales through the Internet,” said Long.
What about the threat from existing online distributors? “Well, it is easier for us to cross over into their business than for them to cross over into our business,” said Long.
“We have the warehouses and the inventory and all we need to do is equip warehouses to ship smaller quantities and still make money,” said Long.
Long says the scale of Arrow’s traditional order fulfilment business will always be bigger than Internet-based sales.
“I believe that Internet will be a sales tool but not on the scale of the products business,” said Long.
“It has a different customer base. What it has done is aggregate the small home user up to the small business user in a way not done before,” said Long
Long is a strong believer in the power of online engineering communities to drive component sales, and the company has made strategic acquisitions in this area already.
“Anything that affects how electronic components are purchased is something we would want to participate in,” said Long.
“The learning environment feeds the ideas which leads to products and leads to revenues, it all fits together,” said Long.