Online business booming for catalog distributors

Online sales may still be a small percentage of total distribution sales, but it’s a growing opportunity, especially for catalog distributors.

According to Mark Larson, president of Digi-Key Corp, Internet sales accounted for 62% of the distributor’s total sales in 2007, compared with 54% in 2006. Larson expects that Digi-Key will derive 70% of its sales through the Internet in 2008.

“As a distributor with a catalog background, sales via our Web site seemed like a natural extension of what we were already doing—a better way of reaching customers,” he says.

According to EDN’s May Top 25 North American Electronic Component Distributors ranking, total 2007 sales at Digi-Key were $941.1 million. The company showed a 14% increase over its reported 2006 revenue.

The story is a similar one at Newark, part of the global Premier Farnell Group. “While Newark is a multichannel distributor with branches, call centers, and an outside-sales team, we’re quickly emerging as a dynamic Web business,” says Barry Litwin (photo), senior vice president of marketing. “As such, one of our target goals for the decade is to more than double our Web sales, so that 50 to 70% of our entire sales come through that channel. Our market research suggests that both electronic-design engineers and buyers prefer to use the Web to find, quote, and order online.”

Newark’s total sales in 2007 were $627.5 million, according to EDN’s Top 25 North American Electronic Component Distributors ranking. The company showed a 3% year-over-year gain in its reported 2007 revenue.