Stocking the right inventory and providing that to customers on time is what a good component distributor specialises in. With the gradual increase in the number of startups, the demand for components has skyrocketed in recent years. At this juncture, how are traditional players keeping up with the digital world?
Vaibhav Shah, proprietor of Heet Electro Devices, in an interaction with Baishakhi Dutta, discusses the company’s strategy for keeping up with the tough competition from online sales platforms.
EB: What unique aspect of your firm benefits customers that do business with you?
We have been into the distribution of active and passive components since 2006. We cater to almost all major segments in the electronics industry. We basically focus on the customers’ requirement and support them with kits, which enables them to get materials on time and in a single lot. This is cost-effective for the customer.
We develop a partnership programme with our customers, and provide almost 75 per cent
of the customer’s bill of materials at an advance schedule of three months. We can accommodate price changes of +/-3 per cent, and +/-10 per cent of quantity changes
per month, if required. We ensure that we promptly offer our feedback and quotations against customers’ enquiries.
EB: What’s your strategy with respect to keeping ready stocks of in-demand products for your customers?
In order to ensure ready stock of products, we focus on the advance scheduling of products, based on the schedules of our customer. We keep sufficient inventory and supply components in kits. Our specialty is that we manage to support our customers even for
their in-demand requirements, as we hold sufficient stock of all components.
EB: Do you cater to startups that may not have orders that match your MoQs?
We support startup OEMs as well. We help them, but with a small quantity to start with. We break some items out of our standard packing quantities (SPQ) and supply to startups for pilot projects.
EB: Which are the cities that you have offices in? How do you cater to or servic ecustomers who are located outside the cities your offices are in?
We have a presence all across India, including representatives in the east, i.e., in Kolkata, for sales and marketing. Every alternate month, we visit our outstation customers to understand their new projects as well as any new requirements and then act accordingly.
EB: What’s your strategy for providing samples to customers who may want to try them in their designs?
We offer support for all kinds of samples that may be required by customers, free of cost, for their approval.
EB: Do you have a team to help customers in designing their products? If so, what role does this team play in building relationships with customers?
We do not have a team specifically for that purpose, but if the situation arises, then I personally get involved and work very closely with our principals to help customers with
the ‘design in/design win’ concept. This begins right from selecting a device based on its application, supporting the customer with the ‘application note’, as well as with
samples and full tech support, until the final approval. We have a good success rate in applying the ‘design in/design win’ concept with OEMs, with the help of our principals
EB: What are the top three qualities you believe customers should look for when choosing a sourcing partner?
Having the right sourcing partner is very important. Hence, customers should take into
consideration the following, to ensure they are partnering with the right distributor:
- A professional way of working
- The supplier’s readiness to play an active and responsible role at every stage of the
business process - Competitiveness of the supplier – having the capability to continuously introduce new products without compromising on the quality of the material
EB: How do you see the role of online sales affecting the component distribution
business? Have you started tapping this segment?
It has definitely affected sales to a certain extent, particularly in cases when the order quantity is low and for just-in-time requirements. However, we are not active online, as of now, and going forward, too, we do not intend to tap this domain.
EB: How has your organisation grown in the last two years? And how do you see things evolving in this financial year?
In 2017 and 2018, our firm achieved about 22 per cent and 43 per cent sales growth, respectively. We grew by almost 50 per cent in 2019.
EB: What’s your leadership style? What are the best management practices that
you’ve adopted?
Sincerity, transparency, no false commitments and honesty with the customer are some of the principles that we bank on heavily in our line of business. I emphasise on the ‘We win together’ concept, and so consider every customer a partner because that will help us excel
together.
EB: Any major initiatives taken in the last financial year that you would like to share with our readers?
In the last year, we have managed to improve our cost of purchase by exploring and partnering with three new principals since we are aiming to provide more cost-effective products to OEMs. So, currently, we are offering the products of 17 principals.
EB: What are your key focus areas for this financial year?
We are primarily focusing on three things:
- Continuously lowering the cost of products
- Exploring more segments for us to enter
- Penetrating deeper into the industry in order to increase our customer base
EB: Any views on current government policies related to import-export, GST and
electronics manufacturing?
There has to be more support from the government for the SMEs, along with simplifying
policies for startups and providing them with basic necessities like good infrastructure, electricity and communication facilities.
