Author Topic: Test Equipment and the whole game  (Read 9711 times)

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Offline rstofer

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Re: Test Equipment and the whole game
« Reply #75 on: March 15, 2021, 05:58:12 pm »
It's the local distributor that is going to come to your company and put on a show.  It is unlikely that the manufacturer will have an employee in every market segment.  No big equipment purchase is going to happen without a show-and-tell.

Now, true, many manufacturers have a direct presence in Silicon Valley but that's a different dynamic.
 

Offline noobiedoobieTopic starter

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Re: Test Equipment and the whole game
« Reply #76 on: March 15, 2021, 06:08:09 pm »
Reducing the price? Are you in a business that manufactures specialist equipment? Do you know the margins and the overhead? Doubtful.

(Aside: this forum always baffles me. It claims to have a large audience of professional engineers -- that is, people whose work results in products sold. So these professionals understand things like "overhead" and "BOM cost" and what it takes to run a business, and all of that goes into their products' selling prices. Yet there are people on this forum saying "they need to reduce the price" (or worse, ask for hacks and workarounds for software licenses). And right away this is what tells me whether someone is a professional or a pretender/hobbyist. Yes, we all want products to cost less. But we also want the best performance out of those products, and we want the supplier to remain in business to support the product. So pick two.)

Selling through distributors is a separate issue. At least here in the US, they're already doing that. Right now in another browser tab I have the Keysight oscilloscope page open. I clicked on "BUY NOW" and it's in my cart and if I give them my credit card number they'll happily send me a nice 'scope. Tektronix is the same. Fluke, too.

I bought a Rigol power supply through distribution (Saelig) since Rigol does not sell direct. That's likely because they're not big enough to do their own worldwide distribution.


I am sorry you misunderstood or I didnt articulate that sentence properly. I didn't mean reduce prices of TE overall, please read it in context. I meant if you eliminate the distributor and and then reduce the price; atleast pass on some price benefit to the customer by selling direct... I even gave data on revenue and distributor margins.

Also, you can have it all and that can happen when businesses continuously eliminate inefficiencies and go for disruption, not by being complacent.

Also, this concern about hobbyists raising silly questions comes up again and again. I have considered this. The whole thing for questions and answers can be outsourced, companies can create forums, communities etc. there are 'n' number of ways to do it and cheaper and companies have done it like Mathworks, although software, it gets more questions. Also as I said earlier, these hobbyists asking questions come from sheer unfamiliarity with test equipment and which is again due to their expensive nature that universities/colleges etc used to buy analog stuff.

Also words about distributors 'stocking' product. Haven't any of you faced issues with lead times? Have distributors shipped the product you wanted in 48 hrs?

So which toolmakers deserve to make a living from their work, and which do not? This is the question you are asking.

I didn't raise that question at all. Again it seems you are skimming through and probably didn't get the context. Read my first post on this thread. My concern throughout has been the 'tools of innovation' being expensive and not that companies are making crazy money and they have to be stopped. I know R&D is expensive. I am equally concerned about success of business involved in niche stuff but I am also concerned that while those companies have been mastering their niche they have given little thought to other things like sales

 

Online tautech

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Re: Test Equipment and the whole game
« Reply #77 on: March 15, 2021, 06:14:04 pm »
Today it isnt. TE companies would sell a lot more equipment if they reduce the price. Educational institutions to enthusiasts to industry. This seems like a like a chicken or egg problem  but it isn't. Companies have to swallow their ego and bid adieu to distributors and focus on selling direct.

Reducing the price? Are you in a business that manufactures specialist equipment? Do you know the margins and the overhead? Doubtful.

(Aside: this forum always baffles me. It claims to have a large audience of professional engineers -- that is, people whose work results in products sold. So these professionals understand things like "overhead" and "BOM cost" and what it takes to run a business, and all of that goes into their products' selling prices. Yet there are people on this forum saying "they need to reduce the price" (or worse, ask for hacks and workarounds for software licenses). And right away this is what tells me whether someone is a professional or a pretender/hobbyist. Yes, we all want products to cost less. But we also want the best performance out of those products, and we want the supplier to remain in business to support the product. So pick two.)

Selling through distributors is a separate issue. At least here in the US, they're already doing that. Right now in another browser tab I have the Keysight oscilloscope page open. I clicked on "BUY NOW" and it's in my cart and if I give them my credit card number they'll happily send me a nice 'scope. Tektronix is the same. Fluke, too.

I bought a Rigol power supply through distribution (Saelig) since Rigol does not sell direct. That's likely because they're not big enough to do their own worldwide distribution.
It is often overlooked some larger buyers will only deal with local sellers in case support is required.
Down here in NZ none of the manufacturers have a physical presence other than their privately owned distributors.
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Offline nctnico

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Re: Test Equipment and the whole game
« Reply #78 on: March 15, 2021, 06:21:45 pm »
Just because Amazon lists a product and maybe even ships the product doesn't mean they sell the product.  Look at the ever-popular DS1054Z at Amazon. Sure, they warehouse it (maybe) and ship it but it is sold by TEquipment.

https://www.amazon.com/Rigol-DS1054Z-Digital-Oscilloscopes-Bandwidth/dp/B012938E76

Same story for Dave's version of the BM786.  His inventory is sitting in Amazon's warehouse.  Amazon will ship it but it's sold by EEVblog

https://www.amazon.com/EEVblog-BM235-Brymen-Multimeter/dp/B01JZ1ADCO
Still the Siglent listing posted earlier is shipped AND sold by Amazon. Amazon seems to be very transparant about that.

Down here in NZ none of the manufacturers have a physical presence other than their privately owned distributors.
That is because the only manufacturers of equipment for which it is worth having a local presence are those selling sheep supplies  :-DD For the rest the market in NZ is just too small.
« Last Edit: March 15, 2021, 06:27:14 pm by nctnico »
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Online tszaboo

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Re: Test Equipment and the whole game
« Reply #79 on: March 15, 2021, 06:30:41 pm »
@noobiedoobie: 10% margin is way to low. Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

Oh my holy FET! 50% to 60% that is ridiculous. I can't sleep now. What heavy lifting? TE is bought on very objective pros and cons whats the distributor have to do with it. 50% for making a few calls and possibly giving a demo of a product they themselves dont understand.
No. They have staff that goes on site to the end of the world. They have calibration services, that support 10-15-20 year old equipment. They buy back equipment with useful life and try to sell it to other customers. Often times you can buy a 5 year old something with new calibration for 40% the original price. You ask them that you want to measure 120 signals, they provide you with a bunch of equipment with switching, cabling, racks and so on, installed by them. There is enormous amount of work to set up a system like that.

It's not just an amazon drop shipping store for screwdrivers.
Yes, they dont have prices online, because 99% of the time a business customer (who knows what the hell they are doing) doesn't buy equipment like that. All the Rigols and Siglents understand this, they approach the TE business like selling equipment. Try connecting a Rigol signal generator to a scope to measure bode plot of something. The most basic stuff.
If all you need is a store, where you buy some TE that looks good on the bench, buy from them.
 
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Offline mansaxel

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Re: Test Equipment and the whole game
« Reply #80 on: March 15, 2021, 10:25:46 pm »
I bought components from Digi-Key and looked them up on Mouser and, at least in my country, they are comparable or even cheaper to those from the local distributor(s).

Around here I have to pay 15 Euros minimum shipping. I have to buy 100 Euros of anything to make it worth buying from them.

(which I almost never do...)

Here, in Sweden, I will get better stock, lower price, free shipping (for orders 50€ and up) from Mouser than from the only equivalent in Sweden, Elfa/Distrelec.  From TDM in Poland (so inside EU as far as trade goes even if not in terms of political climate and rule of law) I can get good prices but not free shipping.  Mouser has a reason to exist, in my book.

Offline wn1fju

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Re: Test Equipment and the whole game
« Reply #81 on: March 15, 2021, 11:55:34 pm »
When I wanted to buy TE at my job, our purchasing rules required that I get three quotes.  In addition to the normal distributors, I would get one directly from the manufacturer (Agilent, Rohde&Schwarz, Tektronix, etc.).  Quite a few times, the quote direct from the manufacturer was cheaper than any of the distributors.  Not by a whole lot, usually no more than 5%.  It almost seemed randomly implemented.

I always thought that quite odd.  It seemed like the manufacturers were undermining their own distributors.  Some of it might have been because we were usually able to convince the manufacturers that we were a quasi-government agency (we were) and deserved a government-contracted discount.  The distributors didn't seem to understand this (or figure out what to do with any paperwork we sent them). 

Anyway, in such cases, we were forced to buy direct.
 

Online jonpaul

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Re: Test Equipment and the whole game
« Reply #82 on: March 16, 2021, 12:19:57 am »
OP: You are free to shop anywhere:

We find the best bargains at Ham Radio Fleas and ebay, but sometime CraigList or ordinary flea markets.

I have bought directly from HP decades ago and never had any issues.

In general a disty is expected to have local stock, deal with importing, freight, customs etc. as well as facilitate any service or cal.

Its the difference between buying a new car from a dealer with a warranty, vs a used one from an individual.

Decades ago the disty had catalogs and local reps, but that tijme has passed.

Enjoy and good luck,

Jon

Jean-Paul  the Internet Dinosaur
 

Online tautech

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Re: Test Equipment and the whole game
« Reply #83 on: March 16, 2021, 12:27:52 am »
When I wanted to buy TE at my job, our purchasing rules required that I get three quotes.  In addition to the normal distributors, I would get one directly from the manufacturer (Agilent, Rohde&Schwarz, Tektronix, etc.).  Quite a few times, the quote direct from the manufacturer was cheaper than any of the distributors.  Not by a whole lot, usually no more than 5%.  It almost seemed randomly implemented.

I always thought that quite odd.  It seemed like the manufacturers were undermining their own distributors.  Some of it might have been because we were usually able to convince the manufacturers that we were a quasi-government agency (we were) and deserved a government-contracted discount.  The distributors didn't seem to understand this (or figure out what to do with any paperwork we sent them). 

Anyway, in such cases, we were forced to buy direct.
2 words: Import costs.
For single units in todays CV climate with reduced airfreight available it's a cost that must be passed onto the customer should they want products in a hurry.
Sea freight rates have trebled in 1 year and they're just another cost that needs be recovered.

Seems like most here can't see 'the whole game'.
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Offline rstofer

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Re: Test Equipment and the whole game
« Reply #84 on: March 16, 2021, 02:43:53 am »
Of course quasi-government organizations get a discount.  It's in the Blanket Purchase Agreement.  Buy in volume, you expect a better price!

Here's a true story:  One company I worked for had manufacturing all the way down to retail.  Highly integrated, top to bottom.  Except:  The retail organization was forbidden from selling to any government organization at any level whatsoever.  Why?  Because every government contract has a clause that the government will receive the lowest price of any customer.  So, some shmuck, somewhere, makes a mistake on an invoice and inadvertently charges a price below the contract price.  Now every government  organization at every level is entitled to that price and a refund on their purchases back to <forever>.  Let the lawsuits roll...

One subsidiary had a sign on the wall that said, in effect, you will be fired on the spot if you work on any proposal for a government contract.

Selling to the government is not without risk.  It has to be handled centrally and very carefully.
 

Offline THDplusN_bad

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Re: Test Equipment and the whole game
« Reply #85 on: March 16, 2021, 08:43:23 am »
By the way here are the numbers people:
(I took pain to dig into these figures)
Revenues of TE Companies:

[...]
Rohde and Schwarz: $307 Billion

Those are company revenues. [..]


Good Day,

sorry, but this is grossly incorrect and way off reality.
R&S's annual revenue was 2.58 Billion € in their FY2019/2020
https://www.rohde-schwarz.com/uk/about/overview/company-profile/company-profile_229412.html?change_c=true

Cheers,

THDPlusN_bad
 
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Offline m k

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Re: Test Equipment and the whole game
« Reply #86 on: March 16, 2021, 09:50:50 am »
Operating a business is pretty simple.
You just need enough income in sufficient time.
But even if your stuff is selling like no other it's still the overall income that counts.

For example selling 1s from brick and mortar compared to online.
People come in and buy few, same with online where p&p is added.
One could guess that doubling the price at brick and mortar would be fine, since it's still less than average online with p&p.

From the other end.
Back in the day it was a known fact that no manufacturer does a profit from hardware service.
Now we don't have that kind of service and hardware integration level has skyrocketed.
Whole departments are closed and workforce is somewhat hobbying between burger flips.
Advance-Aneng-Appa-AVO-Data Tech-Fluke-General Radio-H. W. Sullivan-Heathkit-HP-Kaise-Kyoritsu-Leeds & Northrup-Mastech-REO-Simpson-Sinclair-Tektronix-Triplett-YFE
(plus lesser brands from the work shop of the world)
 

Offline noobiedoobieTopic starter

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Re: Test Equipment and the whole game
« Reply #87 on: March 16, 2021, 02:07:32 pm »

sorry, but this is grossly incorrect and way off reality.
R&S's annual revenue was 2.58 Billion € in their FY2019/2020
https://www.rohde-schwarz.com/uk/about/overview/company-profile/company-profile_229412.html?change_c=true

Yes sorry it must be $2.83bn I think I made a mistake when converting from euro to dollar
 

Offline TheUnnamedNewbie

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Re: Test Equipment and the whole game
« Reply #88 on: March 16, 2021, 02:45:16 pm »
It's the local distributor that is going to come to your company and put on a show.  It is unlikely that the manufacturer will have an employee in every market segment.

I don't think we have bought anything significant without Keysight, R&S or Anritsu visiting us. Not a distributor, but a person from the company.
And maybe this comes from me working in a big group, but buy everything but stuff like supplies direct. Small stuff (for us) we buy from distributors because the hassle of buying direct is not worth us just having it delivered next day.

EG: I need one supply? I go to Farnel and order it. We are restocking the lab with new supplies? We send a list of requirements to Keysight, Keithley and R&S and see what they offer and what we end up going for.
« Last Edit: March 16, 2021, 02:50:21 pm by TheUnnamedNewbie »
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Offline Tomorokoshi

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Re: Test Equipment and the whole game
« Reply #89 on: March 16, 2021, 03:43:34 pm »
Where do distributors add value? Not sure.

Do distributors save money for manufacturers? Yes. Here's how it works:

Even though you can buy things online, the different distributors have territory agreements with the manufacturers. Now, cross-territory sales certainly occur, but implied with territory is that they also support customers within the territory. If a distributor sells outside of territory, they might have some travel liability to deal with.

Anyway, let's say a manufacturer sells enough to support an inside sales staff of 10 people for North America. That might cover 10 regions: two in California, one in New York, one for Canada, one for Mexico, and 6 more for everywhere else. The inside sales regions might be roughly equal in yearly sales volume.

Now we have to business options: Sell direct, or sell through distribution.

Selling through Distribution
Each of the 10 inside sales managers works with maybe 3 distributors. Each has a franchised territory. Each has maybe 5 sales and support people. They take care of direct customer issues, whether it's drawing up a quotation, providing training, or making a warranty claim. In effect 3 * 5 * 10 = 150 people are working part-time to support the manufacturer.

Now, while this manufacturer has these regional deals, those distributors have deals with other manufacturers. So they might also sell Keysight, Extech, and some automation equipment. They have diversification by carrying multiple manufacturers across different target price points, industries, etc. This allows their staff to be generally busy to ride out business sales cycles.

Selling Direct
For same same coverage compared to the distributor model, in addition to the 10 inside sales people the manufacturer has their own group of outside sales and technical support. Instead of the equivalent of 150 part-time people, to balance coverage and cost they might need 50 regional sales and support people. Their sales come and go with business cycles, and they don't have diversification across other manufacturers and industries. Now add to this the macroeconomic problem of duplicating this across all the manufacturers that were represented by the distributors. The overall expense is higher, and they will likely face higher overhead and turnover.

They takeaway is that a manufacturer pays the distributor on commission only when a sale is made. If a manufacturer has their own staff, they have to pay all the time, not to mention paying for all the buildings.
 

Offline ElektroHS

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Re: Test Equipment and the whole game
« Reply #90 on: March 16, 2021, 05:08:12 pm »
the end-cost of a product will be higher for end-user in many cases... based on stages that should be completed.
the main problem - sometimes a product is "duplicated"...  and it's importantly to support original manufacturer who did R&D of this product... but don't support "duplicators"
In order to create good product - manufacturer should spend much time for R&D... as a result it's costly... so final product will need to cover all aspects for "product life"
 

Offline james_s

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Re: Test Equipment and the whole game
« Reply #91 on: April 18, 2021, 04:07:40 am »
ok sure Antarctica. None of my questions are region specific. Fire away... answer questions 2&4 atleast?

They're ALL region specific.
 


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