Test Equipment and the whole game

[noobiedoobie]

I am pretty new to the world of buying TE and I obviously I find it appalling and provocative when I look at how  T&M equipment companies run their business and oh, obviously their prices.

Here are a few questions:

1. Why on earth and in this day and age do T&M companies(R&S, Keysight, Tek etc.) have this whole policy of selling only through their distributors? Its silly, what value are those schmuks adding to the process? Nil. When smartphone companies can sell millions of smartphones like vegetables online and honour warranty and customer greivances why can't these guys who sell utmost few 10,000s of gear at best in each country want to be in bed with distributors?
Next time when the Siglent CEO or some other top guy from such companies comes visiting maybe Dave can suggest this?

2. How does one negotiate with distributor schmuks? I guess that can only happen when we what their margins on the gear are? Can anyone add something here? also what is discount one can expect on the quotes they give 5%? 10? 1%?

I recently asked for quotes from few schmuks for an SA and it was ridiculous. For one brand, I could easily import the same from the country of origin, pay customs duties and still save enough money to buy a bench power supply but because there is only one distributor in the city for that company he doesn't bother about cutting some slack and he thinks the company exists solely because of his dealership.

3. I don't know why companies like RS, Digikey, Mouser etc exist. Seriously everytime I see their price I get a feeling that they think the world never recovered from the world wars and there is a global components/equipment shortage. Atleast this the case in my country. I ask this because I see a lot of people here using there companies and almost (just almost) everything they sell is available in the local market for a lot less. Oh! and I searched for a SA there and whom am I kidding Prices are transparently 30%-60% more than company quotes.

4. So where does this leave us? Amazon is still waking up to selling such gear and few are others are trying... What do the mavericks here do? How do go about buying new test gear when you have to? What are your SOPs?

I am just sore because I believe scientific equipment in general are tools of innovation and when they get very expensive or out of reach for people it just doesn't hinder innovation it hinders humanity's progress. That is precisely why biological stuff is out of reach. The reagents and stuff are so expensive that there is no such thing as 'hobby biology'(not counting collecting dead animals and drawing them).

Despite all the China bashing that keeps happening here I think only China can stick it to all these cocky companies.

Edit: While its been an interesting discussion so far, I wish someone could answer the above questions. Seriously, what are the distributors' margins on scopes like?

[tautech]

How can you expect a civil answer when you won't even disclose where you are ? 
Just a clue in your profile would be enough ....flag, region, district......

[purpose]

I'm guessing he's in Antarctica.

[noobiedoobie]

ok sure Antarctica. None of my questions are region specific. Fire away... answer questions 2&4 atleast?

[tautech]

None of my questions are region specific.

So you think.

[purpose]

Who pissed in your cornflakes?

[Fungus]

It's worse than that, sometimes even the distributors won't sell you one: 



https://www.batronix.com/shop/oscilloscopes/Keysight-DSOX1202G.html

[nctnico]

It's worse than that, sometimes even the distributors won't sell you one: 

Register a company and deduct the investment from tax.

[Fungus]

I am just sore because I believe scientific equipment in general are tools of innovation and when they get very expensive or out of reach for people it just doesn't hinder innovation it hinders humanity's progress. That is precisely why biological stuff is out of reach. The reagents and stuff are so expensive that there is no such thing as 'hobby biology'(not counting collecting dead animals and drawing them).

Then there's companies like Fluke who are so entrenched that they can't even produce a meter that could be attractive to a hobbyist because it might upset their corporate accounts.

(and it seems Fluke can't even improve their existing products because the institutions don't want it - they'll be making the 87V forever!)

Luckily we have Brymen in the EU.

[Fungus]

It's worse than that, sometimes even the distributors won't sell you one: 

Register a company and deduct the investment from tax.

For a one-off purchase by an individual? That's a long delay, lots of paperwork, and probably more expensive after you've paid all the notaries and accountants.

[noobiedoobie]

How can you expect a civil answer when you won't even disclose where you are ? 
Just a clue in your profile would be enough ....flag, region, district......

You are a distributor, you have an 'interest', sorry  for everything I have said but from where I stand that the way things look. Its got nothing to do with region isnt it globally true?

On a very objective, impersonal note do distributors really add any value in this sector which the company by itself cannot? Even on the B2B front none of them contact distributors, we contact the company(manufacturer) explain our requirements and they suggest a product and they bill it through a distributor and we couldn't care less whom it's coming from.

I think in whole scheme of evolution and disruption of markets, T&M segment has never evolved. A 10-25% overhead just for the sake of the distributor pinches for a lot of small business and startups, forget hobbyists

You know why China progressed so fast precisely because of this reason, because the 'tools of innovation' are cheap and they dont care about patents(that's another discussion altogether) and they then use them to make so many other things in many variations and that has become their business culture also. NO FORMALITIES. I remember a few years ago I was talking to one chinese Manufacturer for some parts, I could not satisfy their MOQ but after some negotiation they made the sale 'direct' and the price was marginally higher. Try that with any of the German or American companies.

Evolution doesn't wipe out the weak only the ones that refuse to change.
Again, no offence intended.

[noobiedoobie]

It's worse than that, sometimes even the distributors won't sell you one: 

Register a company and deduct the investment from tax.

That is one way but in most countries investment is not tax deductible as it is capital expense, only revenue expenses are tax dedcutible.
Large companies can game the system as its hard to assess which is revenue and which is capital in their case

[noobiedoobie]

It's worse than that, sometimes even the distributors won't sell you one: 

https://www.batronix.com/shop/oscilloscopes/Keysight-DSOX1202G.html

I know! Like its some sensitive military tech.

[iainwhite]

It's worse than that, sometimes even the distributors won't sell you one: 

https://www.batronix.com/shop/oscilloscopes/Keysight-DSOX1202G.html

I know! Like its some sensitive military tech.

Most likely due to EU consumer protection laws, which do not apply to purchases by businesses.   
I am guessing that Keysight has decided that providing things like a mandatory 14 day return period just makes it not worth selling to consumers.

[tautech]

How can you expect a civil answer when you won't even disclose where you are ? 
Just a clue in your profile would be enough ....flag, region, district......

You are a distributor, you have an 'interest', sorry  for everything I have said but from where I stand that the way things look. Its got nothing to do with region isnt it globally true?

From where I stand I see a quite different picture. 

On a very objective, impersonal note do distributors really add any value in this sector which the company by itself cannot? Even on the B2B from none of contact distributors, we contact the company explain our requirements and they suggest a product and they bill it through a distributor.

Of course we do.....timely support in the local language and time zone. Spare/accessories if required.
Additionally territorial marketing agreements have been signed....inquiry to manufacturer results in notification to regional distributor to follow up on a likely sale and this is a process that works.

I think in whole scheme of evolution and disruption of markets, T&M segment has never evolved. A 10-25% overhead just for the sake of the distributor pinches for a lot of small business and startups, forget hobbyists

No, only at your peril.
Old companies maybe as they have long forgotten their roots and prefer to focus on $ instruments where the markup is higher.....1 sale profit = 10x profit of a cheap instrument for much less work.

[nctnico]

It's worse than that, sometimes even the distributors won't sell you one: 

https://www.batronix.com/shop/oscilloscopes/Keysight-DSOX1202G.html

I know! Like its some sensitive military tech.

Most likely due to EU consumer protection laws, which do not apply to purchases by businesses.   
I am guessing that Keysight has decided that providing things like a mandatory 14 day return period just makes it not worth selling to consumers.

I doubt that. EU consumer protection laws apply to the 'contract' between a consumer and the supplier / distributor. Not the manufacturer. Besides that, as a business user I can order test equipment from Farnell and return it -no questions asked- within two weeks (or even longer; forgot the precise time period). On top of that Farnell's pricing on test equipment is pretty good.

[noobiedoobie]

Of course we do.....timely support in the local language and time zone. Spare/accessories if required.
Additionally territorial marketing agreements have been signed....inquiry to manufacturer results in notification to regional distributor to follow up on a likely sale and this is a process that works.

Trust me I know how the process works.
Local language support, Spares etc Again none of which the company cannot do by itself directly on a platform like Amazon.
' Territorial Marketing agreements' - Thanks for proving my point! Its just another way of creating 'territorial monopolies' where none should exist. These agreements are great for cement and fuel business not the tech business.

No, only at your peril.
Old companies maybe as they have long forgotten their roots and prefer to focus on $ instruments where the markup is higher.....1 sale profit = 10x profit of a cheap instrument for much less work.

Thats solely due to the virtue of demand for the 'product' the distributor is irrelevant. So now when the margin is 10x some other cheap product dont you it makes more sense for the company to sell it directly? Lets say they reduce the price and keep only 25% of the distributor's margin for doing the little extra work of direct selling with that they can still cover direct servicing of warranty and support staff and still keeping their original margin intact

Look long story short - This whole traditional distribution chain was useful in an age where landline telephones where the fastest mode of communication. Today they are just inefficiencies.

[noobiedoobie]

I doubt that. EU consumer protection laws apply to the 'contract' between a consumer and the supplier / distributor. Not the manufacturer. Besides that, as a business user I can order test equipment from Farnell and return it -no questions asked- within two weeks (or even longer; forgot the precise time period). On top of that Farnell's pricing on test equipment is pretty good.

Oh nice! I haven't checked Farnell Till now I have found Batronix to be the most competitive for the products they sell

[tautech]

Of course we do.....timely support in the local language and time zone. Spare/accessories if required.
Additionally territorial marketing agreements have been signed....inquiry to manufacturer results in notification to regional distributor to follow up on a likely sale and this is a process that works.

Trust me I know how the process works.
Local language support, Spares etc Again none of which the company cannot do by itself directly on a platform like Amazon.
' Territorial Marketing agreements' - Thanks for proving my point! Its just another way of creating 'territorial monopolies' where none should exist. These agreements are great for cement and fuel business not the tech business.

Maybe you missed this or didn't comprehend it ? 
From where I stand I see a quite different picture.

Why would I invest $ in holding any company's physical stock without some degree of protection ?

[noobiedoobie]

No I got it, and I completely agree. It your bread and butter so you would only take up their business if you are protected. Thats fair enough.

But look at how flawed this model and what the casualty is. Inflated prices, no competition and also not all distributors are the same so quality of service is also suspect.
It defeats the very purpose it was supposed to fulfill.

[nctnico]

Why would I invest $ in holding any company's physical stock without some degree of protection ?

In the end that doesn't serve the manufacturer. Not all distributors are worth doing business with. I have come across my fair share of distributors which are just a bunch of lunatics (not just test equipment but other sorts of items as well). Also competition keeps the market healthy.

[tautech]

No I got it, and I completely agree. It your bread and butter so you would only take up their business if you are protected. Thats fair enough.

But look at how flawed this model and what the casualty is. Inflated prices, no competition and also not all distributors are the same so quality of service is also suspect.
It defeats the very purpose it was supposed to fulfill.

Judged by who's metric ?

Why would you imagine any manufacturer can offer worldwide sales and timely support from a single base ?

Anyways you're not seeing the full picture as some manufacturer's appointed resellers aren't bound by territorial agreements like some in USA and EU.
If it's all about lowest purchase cost there are often other options however the buyer need balance this against any need for local warranty or technical support.
Everyone wants a free lunch.............

[nctnico]

No I got it, and I completely agree. It your bread and butter so you would only take up their business if you are protected. Thats fair enough.

But look at how flawed this model and what the casualty is. Inflated prices, no competition and also not all distributors are the same so quality of service is also suspect.
It defeats the very purpose it was supposed to fulfill.

Judged by who's metric ?

Why would you imagine any manufacturer can offer worldwide sales and timely support from a single base ?

Anyways you're not seeing the full picture as some manufacturer's appointed resellers aren't bound by territorial agreements like some in USA and EU.
If it's all about lowest purchase cost there are often other options however the buyer need balance this against any need for local warranty or technical support.
Everyone wants a free lunch.............

It is not just that. Try to buy something from Lecroy in the Netherlands for example from the official distributor. If you ask for a good deal, they offer you equipment from Rigol. FFS! 

[tautech]

And you sent that reply to LeCroy ?

[nctnico]

And you sent that reply to LeCroy ?

Don't remember. It is a long time ago. Maybe I tried to contact the UK and German distributors but I don't recall them ever getting back to me or they might have referred back to the (useless) Dutch distributor. In the end I just gave up and moved on to a brand with a more responsive distributor / reseller.