Component Supply Shortage: Using Non-Authorized Vendors

Worthington Assembly has always made a point to source electronic components from authorized distribution channels (the Digi-Key, Mouser, Arrow and Avnets of the world); however, recently many of our customers have begun to see notes referencing specific BOM lines being quoted from non-authorized vendors on quotes that we provide.

Due to the current global semiconductor shortage we have been needing to branch out our supply chain to be able to quote and secure the components required on almost every job that we are quoting these days. This means quoting components very often at high markup from "non-authorized" resellers. This designation simply means that these companies (Winsource Electronics, Quest Components, and LCSC being among the most common NA vendors we use) do not have the authorization of the manufacturer to resell these parts, and are not franchised distributors.

Very often these companies seek out high risk inventory and purchase large quantities either directly from the manufacturer or from authorized-vendors, and then resell the parts at a very high markup. They exploit the market conditions and make a lot of money doing it because very often they clean out the global inventory leaving our customers either facing a 52+ week lead time or a redesign.

In addition to non-authorized resellers, there are also brokers -- they are technically non-authorized as well, but they don't operate the same way. They mainly work on a component request basis to secure inventory for a given order for a customer. They might get an email from us asking if they have access to a given part and then contact another Contract Manufacturer to see if they have some of these on the shelf sitting unused that they could sell to the broker to in turn, markup and sell to us to fulfill our needs.

We list these for approval specifically on our quotes because we cannot warranty the parts themselves. They may not be traceable and they may not have CoC's -- the only thing that we can guarantee is the quality of the work that we perform (ie. the quality of the solder joints in accordance with IPC and the process by which we assemble the boards to spec in the prints or files provided).

That being said, in the last 6+ years, we can recall only a single instance of us getting a part that flat out didn't work and *may have* been fraudulent. If we ran into an issue where a customer believed the parts were the problem we would do everything we could to work with them to get the boards working, but we need to be honest in letting our customer base know that this would come at a cost, and that labor charges for rework would apply. Importantly, there may not be another source to get those parts anyhow.

If you receive a quote back from our quoting team and see a note referencing a non-authorized vendor and do not feel comfortable assuming that risk please let us know. We may request that you provide a suitable alternate that is available through authorized channels so that we can revise the BOM and quote accordingly, or if you have stock on hand that you have secured ahead of time always feel free to provide these parts to us on consignment and we will remove the cost associated with the parts from our quote.

If you have any further questions, please feel free to reach out to the author of this blog post at bbabilonia@worthingtonassembly.com