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World Micro is a "Hybrid" Electronics Distribution company. Our business model is unique, and very different from traditional Franchised Distribution (Franchise), Independent Distribution, Brokers, and Manufacturer's Rep Firms.
We recognize that most electronics business (80%) is conducted factory direct, and only 20% of all business goes through Franchise.
The Franchise model is "supplier centric", which is centered on the supplier's needs and not the customers. Why? By getting suppliers to commit a certain percentage of their product through the distribution channel, they are guaranteed a certain rate of return on all products sold. Their Tier 1 Suppliers are their #1 Customers. What Franchise brings to electronic buyers and engineers is a limited linecard of options for their unique needs, and usually the most expensive brand options. The link in the gray box to the right highlights some of the issues around being trapped in the traditional distribution model.
World Micro's goal is to serve the customer's complete needs from Design, Prototype, Production, and through End-Of-Life Management. We do this differently than Franchise. We focus on the customer and their unique needs. We take the time to understand the project's "Complete" requirements, and source suppliers who are the "Best" solution: Form, Fit, Function and Price. Then we tailor our distribution / stocking services to meet the project's deadlines and delivery schedules.
"In-House Stores": Friend or Foe?
Franchise proudly offers "Advanced Supply Chain Services" called "In-House Stores" to facilitate instant access to product. Many OEMs and CMs have adopted these programs, but at a hidden cost seldom seen or understood. Most company goals are to lock a customer in to buy from them. Once locked, many "Back-End" activities take place to maximize profits. The Arrow CEO summarized this activity in a recent interview":
Delivering a Global Arrow: By Ed Sperling -- Electronic News, 11/19/2004
Bill Mitchell, president and CEO of Arrow Electronics
Electronic News: One last question. In the past, Arrow has made a big deal about services, but getting paid for them hasn't been easy. Has anything changed?
Mitchell: We do get paid for services. Sometimes we get a fee, sometimes we get an up-front retainer, and sometimes it's built into the cost of what they buy. And where we get into advanced supply chain engagements, we get a higher margin for services. That's more common in North America, where more than 70 percent of the customers have supply chain engagements.
Are you paying too much? Our "Virtual In-House" stores take advantage of an old fashioned approach to "Stocking Distribution". We actually purchase and stock on our shelves what you need, so that when you need it, it is here. Simple, but very effective. Call us and let us know how we can reduce your cost, and get you what you need when you need it.
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