We priced an out-of-stock part with 27 distributors to navigate part sourcing during the chip shortage firsthand
If your experience is like most project managers, you needed your semiconductors yesterday.
And even with chip shortages easing, the distribution of newly manufactured parts isn’t always equal. Many OEMs initially shuttle chips to the largest manufacturers, forcing smaller CMs to source parts through other channels or delay, revise or even cancel projects.
We decided to source an out-of-stock part to experience part buying through non-authorized distributors directly and identify ways the process can be improved. For this exercise, we priced the out-of-stock NXP Semiconductors MP3V5050GP pressure sensor through companies listed on Octopart, including XScomponents.
Our experience was surprising, frustrating and, with few exceptions, incredibly inefficient. Below are a few takeaways from our experiment.
RFQs are a major pain point
We submitted RFQs to every company that didn’t offer an immediate, click-to-buy price for our component of interest. This left 24 distributors that required us to submit an RFQ for just basic pricing information.
Every distributor required our name and email address to send an RFQ, and many websites required us to submit a phone number, the name of our company, the number of pieces we were interested in purchasing and/or our target price to successfully submit the form.
In total, even if it only took us 2 minutes to auto-fill and submit an RFQ for a single distributor, this added up to a total of 48 minutes spent requesting basic pricing information. We also learned that giving these companies your contact information won’t necessarily guarantee you a quote, but it will open the floodgates for lots of new marketing emails and phone calls.
Prepare to wait for that quote (if you receive one at all)
As we mentioned previously, only three companies—XScomponents, Fly-Wing Technology and Utmel Electronics—offered immediate, click-to-buy purchasing options. Immediate purchase prices at both Fly-Wing Technology and Utmel Electronics were roughly 2x higher than XS ($15.30), which suggests buyers will be paying more to buy parts immediately through these vendors rather than requesting a quote.
The remaining 24 distributors listed on our Octopart search required us to submit an RFQ before we could buy parts. We waited between nine and 48 hours to receive quotes (see Chart 1 below), and we never received quotes from 16 of the 24 distributors we submitted RFQs to. Surprisingly, we received two quotes from distributors that we didn’t recognize. More on that later.
Listed prices on Octopart never match quotes… with one exception
The quoted prices we received from distributors varied from $14.87 to $50.00 per piece. Interestingly, the prices listed on Octopart searches, if they were listed at all, never matched the quoted prices we received from distributors. Some quoted prices were higher and others were lower than what was listed on Octopart (see Chart 2 below). Only the XS website listing matched its Octopart listing price.
Stock quantities may not be current
Two of the distributors that reported available stock on Octopart responded to our RFQ that they were out of stock. One of the companies also listed available stock on their website when parts were not available. Two distributors additionally emailed us to inform us of MOQs that were not listed on the Octopart search.
Different distributors may actually be a single company
We mentioned earlier that two of the quotes we received were from distributors we didn’t send an RFQ to. We additionally found that some companies had the same typos in their alert messaging after we submitted our forms. This evidence suggests that some of the non-authorized distributors listed on Octopart are actually the same company. Importantly, it may also explain the relatively small number of quotes we received after sending so many RFQs from distributors advertising available stock.
Experiment takeaways
Overall, our team found that sourcing parts through distributors that require RFQs is an inefficient and often frustrating process, especially for project managers on tight production schedules. Pricing and stock quantities are frequently incorrect, and the process of filling out RFQs and waiting for pricing information is arduous and time consuming. XScomponents was unique in this experiment by offering accurate, up-to-date pricing and stock information that allowed our buyers to purchase the required part without wasting time or money.
XScomponents is a peer-to-peer semiconductor marketplace designed to redistribute new, overstock electronic parts. Check out our Marketplace, sell your excess parts or send us your feedback at info@xscomponents.com.