Stocking up the right inventory and reaching out with that to customers on time is what a component distributor bets high on. With the gradual increase in 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 of Electronicsforu.com shares his business strategy to keep up with the tough competition presented by the online sales.
Q. What’s unique about your team (or firm) that’s beneficial for customers to do business with you?
We are into distribution of active and passive components since 2006. We cater and supply to almost all major segments in the electronics industry. We basically focus on the customers’ requirement and support them as kits which enables them to get materials on time and in a single lot supply. In that manner, it is cost-effective for the customer.
We work on a partnership program with our customers. We provide almost 75 per cent of the customer’s bill of material at an advance schedule of three months. We can accommodate price changes of +- 3 per cent price, and +- 10 per cent of quantity change per month if required. We are confident that our feedback and quotation is prompt against customers inquiry so that customers do not have to wait much.
Q. What’s your strategy w.r.t. keeping ready stock of in-demand products for your customers?
In order to ensure the 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 them in kits. Our specialty is, we manage to even support the in-demand requirement as we hold sufficient stock of all components.
Q. Do you cater to startups who may not have orders matching your MoQs? If yes, how do you handle them?
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 quantity (SPQ) and supply to startups for pilot projects.
Q. In which all cities do you have offices? How do you cater to/service customers who are located outside the cities your offices are in?
We have our presence across all over India. We have our representatives in the east, i.e. in Kolkata for sales and marketing. In order to reach out to all our customers, every alternate month, we visit our outstation customers to understand their new projects along with new requirements and then act accordingly.
Q. What’s your strategy w.r.t. providing samples to customers who may want to try them out in their designs?
We support all kinds of samples required by customers, free of cost for their approvals.
Q. Do you have a team to help customers in designing their products? If yes, what role does this team play in building relationships with customers?
We do not have a team but if a situation arises, then I personally take interest and work very closely with our principles to help customers in design in – design win concept. This includes right from the selection of a device based on their application, supporting them with application note, samples and full tech support until it gets the final approval. We have a good success ratio in the design in – design win concept with OEMs with the help of our principles.
Q. What are the top 3 qualities you would advise to customers while choosing the right 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.
Professional way of working
Availability and responsibility of the supplier in each and every stage of business transaction
Competitiveness of the supplier with a continuous introduction to new products without compromising the quality aspect of the material
Q. How do you see the role of online sales affecting components distribution business? Have you started tapping this segment?
It has definitely affected sales to a certain extent where the quantum is a low and just-in-time requirement is also there. However, we are not active in online sales as of for now and going forward also we do not intend to tap this domain.
Q. How has been the growth of your organisation in the last 2 years? And, how do you see it for this financial year?
In 2017 and 2018, our firm has achieved almost 22 per cent and 43 per cent sells growth respectively. Going forward, we foresee a growth of almost 50 per cent jump in the current fiscal year.
Q. What’s your leadership style? What’re the best management practices that you’ve adopted?
Sincerity, transparency, no false commitment and honesty with the customer are some of the principles that we bank heavily on in our line of business. I emphasise strongly on the ‘We Win Together’ concept and so consider each and every customer as our ‘partner’ because that will help us excel together.
Q. Any major initiatives taken in the last financial year that you’d like to share with our audience?
In the last year, we have managed to improve our cost of purchase by exploring and partnering with three new principles since we are aiming to provide more cost-effective products to the OEMs. So currently, we are serving products of 17 principles.
Q. What are your key focus areas for the next financial year?
For the next financial year, we are majorly focusing on four things. They are:
Continuously improving on the cost of products
Explore more segments for us to enter
More penetration into the industry in order to increase customer base
Q. 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 ease of policies for startups and providing them with basic necessities like good infrastructure, electricity and communication facility.