September 14, 2021:
Your PCB supplier (broker) has been acquired.
Will this acquisition benefit you as a board buyer? Or will it lead to higher prices and a reduced level of service?
Most likely, you will not have as much leverage as you once did on pricing and service. What was 5% of that acquired supplier’s business may now be only 0.5% of the larger entity.
You’ll immediately become a smaller fish in a bigger pond.
Here’s what you should do in response:
- Ask the new entity what percentage your sales represent for them. It’s important to know where you stand. And prepare for price increases. In fact, sometimes newly enlarged suppliers will even raise prices just to politely shed customers no longer seen as desirable.
- Plan on personnel changes. Ask right away how the new vendor intends to ensure a smooth customer service transition. The support staff you’ve worked with for years may be laid off to avoid duplication of costly services. The supplier may also let go of sales representatives you’ve worked with because it already has a sales staff.
- Seek out alternative PCB vendors for quotes, especially if both vendors were supplying your company PCBs prior to the acquisition. Other suppliers may be eager to give you price breaks and offer a higher level of service, regardless of your annual PCB buy. At the very least, having an alternate source for your boards gives you more leverage with your new, larger vendor.
- If the acquisition experience is not a good one for your company, cut the acquired supplier loose by slowly migrating business elsewhere.
- If your supplier is a PCB broker, you can bypass the broker altogether and deal directly with offshore manufacturers. That is now easier than ever and you are likely to find vendors who are motivated to remain price-sensitive on your orders.
Need help moving your PCB business? Reach out to me at email@example.com.