How to Tell if a Electronic Parts Broker Actually Holds Inventory

We've all heard the terms broker, component dealer, reseller, and gray market dealer. All of these component sellers are non-authorized distributors, meaning they most likely did not obtain the parts they sell directly from a manufacturer. Authorized distributors play a very important role for supply chain participants as they provide assurance that parts are genuine and, in most cases, have been handled properly.

If you start looking on a component search engine, and you see an inventory number for a non-authorized distributor, take that particular inventory number with a grain of salt.

Parts dealers sometimes claim to hold inventory in order to engage with a potential customer and possibly upsell them. Sometimes, a parts dealer does not hold any inventory at all, and they are just acting as a middleman for a buyer. In the worst case, they are trying to offload a fake part, and they are fishing to see exactly what you are looking for.

Here's how to tell whether or not a non-authorized distributor actually holds inventory, and what you might expect once you submit a request to purchase.

Some Distributors Fake Their Inventories

Take a look at the search results shown in the window below. The inventory numbers are provided directly from each of the non-authorized distributors shown in the list. You will likely notice a few things from this inventory list:

• Some of the inventory numbers are duplicated across to distributors
• Even if the inventory number is not a duplicate, the numbers may be of similar magnitude
• Similar markups are seen compared to the authorized distributor entries

The entries in this list are provided by real companies, the problem is that some of these companies might not be truthful or genuine about the parts they hold. They could be duplicating their inventory across multiple companies in different countries, or one company could be copying inventory numbers from a different company.

If you click on one of these distributor results, you will of course be forwarded to a landing page on their website. Here's what could happen when you arrive on their site.

Submit an RFQ

Some of these non-authorized distributors will have a typical page where you can add the part to a cart and make a purchase directly through their site. Although they might apply a markup to the part cost (sometimes a huge markup of 10-20x), you are purchasing the part directly from them.

If you land on a page and are asked to submit an RFQ, then it is highly likely the non-authorized distributor does not actually hold this inventory. Instead, they are going to take your RFQ, go to another company, and source the part for you as a middleman. They will then apply some markup assuming they can get the number of parts you request. Once you pay the broker, they will ship the parts to you, but the parts may be repackaged and possibly mishandled in the transfer.

That's Not What I Requested!

Sometimes, when you are asked to submit an RFQ for parts a non-authorized distributor claims to hold, they will come back with a totally different quote than what you requested. Sometimes, the quote they provide has a ridiculous MOQ number relative to what you requested. For example, you might request a batch of 10 parts but they come back with a quote for 50,000 (this is not an exaggeration). This is because the distributor is purchasing a lot (probably left over parts) from a much larger company. You will have no visibility or assurances as to how the parts were handled prior to them being shipped to you.

Other Problems When Dealing With Distributors

These practices by non-authorized distributors are very common. Someone will set up a very basic web page, get API access to other distributors, and start copying inventory data over to a search engine. All of this is easy to automate, so it is very difficult to stop this kind of unethical practice.

There are two big problems that can arise when you make purchases through these kinds of brokers:

• Counterfeit parts
• Mishandled parts
• Reused parts

In the first case, the parts could be counterfeit, which could actually mean much more than just a part that is fake. The part could be a lower-grade part number, a totally different and remarked part, or in a different packaging than you expected. When this type of deception happens, don't expect the distributor to respond to your demands for a refund.

In the second case, the part could have simply been mishandled, which might not be the fault of the broker. The part could have been left out of its packaging in open air, exposed to humid or corrosive environments, exposed to thermal cycling, or repackaged without moisture and ESD protection.

In the third case, the part could have been de-soldered from an old board and cleaned up before repackaging. These parts could have plating materials on the leads removed, which would impact solderability, or the leads could be damaged in the de-soldering process.

In these instances, the broker is just trying to make a quick buck and will claim to have no liability or offer no guarantee as to the correct handling of the parts you order. Eliminate this risk by using the advanced search and filtration features in Octopart to find components and up-to-date distributor pricing data, parts inventory, and parts specifications.

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