The Quest For A Piece Of Online Distribution

Electronic News, Sept 21, 1998 by Ann Steffora

austin, texas -- With more than $1 billion in inventory available online, and partnerships with leading distributors and semiconductor vendors, QuestLink Technology may be poised to grab a chunk of the online opportunities that companies such as DigiKey and NetBuy and others have already leveraged.

The Internet as an enabling mechanism holds the potential to revolutionize not only the way products are developed, but also the way users receive them. For years now, designers have been able to access technical and support data on certain parts, but over the past few years, the pace has picked up to broaden and deepen what the web can deliver.

As the search continues for ways to manage geographically dispersed design teams, the Internet and the technology behind it, has begun to play an increasingly important role.

One of the most common ways that designers use the Web today is to quickly access technical information and to check the availability of particular electronic components, but what about being able to purchase those components in prototype quantities. QuestLink asserts that its services save companies money by allowing engineers to find information quicker and estimates that there are 1.4 million designers working on systems with integrated circuits. If the approximate annual salary of each designer is $100,000, and if just 1% of the person's time could be saved with services such as QuestLink, that amounts to $1 billion a year, claims Mike Shultz, QuestLink CEO.

The Austin, Texas-based company, launched in 1995 as an online resource for technical data, recently teamed with Avnet and Reptron, two of the largest electronic component distributors, as well as Motorola and Atmel on the supplier side, as the first companies to partner on QuestLink's Engineer's SuperStore. The online store contains more than 165,000 parts worth more $1 billion from over 45 manufacturers. As well, EN learned at the Wescon/IC Expo last week in Anaheim, Calif. that Wyle Electronics is also signing up with QuestLink, according to a QuestLink sales executive.

Components available for purchase include ICs, transistors, development kits, boards, diodes, discrete components and passives.

Mr. Shultz expects sales through the Engineer's SuperStore to total between $2 and $3 million during 1999.

For distributors, online distribution is another way to broaden its sales channel and potentially increase profits.

"QuestLink is a good partner and we have been pleased in the activity on the page....we have seen orders come through already," noted Lloyd Kaplan, executive VP of marketing and supplier business management for Avnet Electronics Marketing.

Another recent online startup in much of the same space is NetBuy, which specializes in online spot market component distribution. As of July, NetBuy had seen more orders during that month than in all other months it has been open for business combined. Although the service was formally launched in early July, it has been up and running, selling parts since last fall.

NetBuy was created in 1996 to establish a "spot market" for standard electronic components on the Internet, by tying together combined inventories of franchised distributors and offering the products for sale on the NetBuy web site.

Updated daily, NetBuy's inventory is currently valued at more than $352,000,000, composed of more than 131,000 unique part numbers from over 660 manufacturers. With more than 20 distributor partners, and another 25 in the queue, the company is optimistic about the future of NetBuy, said CEO Jim Wittry. Some of the largest partners currently are Bell Microproducts, CAPSCO, and Integrated Electronics Corp., and Mr. Wittry hopes to work with some of the top five distributors as well. NetBuy has partners with tens of millions of dollars in inventory, as well as some with inventory below one million dollars.

The Internet as a medium for doing business more efficiently, more cost-effectively and more quickly is not a new concept. Marshall Industries' president and CEO Robert Rodin has been talking about this for years. Marshall, along with other distributors have elaborate websites that allow customers to obtain quotes, check order status, purchase online, and a number of other options. As well, in Marshall's case, the company has an integrated system whereby Marshall salespeople, suppliers and customers interact to streamline the business process.

With the amount of traffic already seen by such Internet sites, more and more distributors are expected to sign on as another method of