Maker movement will mean more business for distributors

James Carbone, contributing editor
James Carbone, contributing editor

Distributors can help develop a maker’s “big idea” into an actual product that can be produced in volumes and taken to market, by James Carbone.

For some distributors the maker movement is resulting in more customers and sales as distributors tweak their business models to better service the requirements of makers.

Using open source development platforms and crowd funding such as Indiegogo and Kickstarter, many makers have been able to create products and take them to production. Often makers will seek out distributors, not just for components, but for their design and supply chain expertise. Once a product is developed, distributors often continue to supply parts for the product when it goes into volume production.

Distributors that specialize in selling small volumes and parts are often the obvious choice for makers, but larger global distributors are also working with makers helping them develop products and bring them to market.

“We see the maker movement as a growing segment of our customer base,” said Raymond Yin, director of technical content for Mouser Electronics, based in Mansfield, Texas.

Many makers are engineers who may have day jobs working at electronics OEMs. They may have an idea for a new product and are trying to develop it and will ask for advice about parts and technology.

“We’ve seen data that shows about one third of makers are degreed engineers, either software or hardware engineers. On top of that another third or so have some sort type of education in electronics, software or programming,”
said Yin.

Some makers are looking to create a product, but not necessarily to bring it to market. But other makers want to “productize” their idea, take it to market and build in large volumes, he said.  “That’s the audience we hope to do more business with, the maker that’s developing a product that’s going to take off,” said Yin. Semiconductor manufacturers are also looking for such makers, he said.

Mouser’s business model is a good fit for makers, according to Yin. He notes that Mouser sells small volumes of parts “anywhere from a quantity of one, which helps a lot of makers because they are not building thousands of anything.” The maker may be building initial prototypes so they may need to buy a small number of parts, said Yin. “Small quantities is our business model,” he said.

Mouser also stocks a lot of development kits, boards and “platforms that makers are creating their devices around such as Arduino and BeagleBoard,” Yin said.

“We also have an entire tech support organization that is knowledgeable” about the platforms and parts that makers need,” said Yin.  The tech organization guides makers and “engineers in general, anyone looking to do embedded design. We also have web resources that are available to makers,” he said.

Yin noted the requirements of the makers are similar to the requirements of small OEMs bringing a new product to market. “The design process is the design process,” he said. Both need to create a design, prototype it, test it and bring it to production.

“The resources that we provide the OEM carry over to the makers, said Yin. A lot of makers develop Internet of Things (IoT) products. “A significant percentage of new IoT devices are going to be coming out from makers,” said Yin

More resources
To meet the requirements of the maker community, Mouser has not changed its business model but has added some resources to the website that are more maker focused, including open source platforms that makers like to use, he said.

“We are also adding more finished product projects which is geared towards the maker community,” said Yin. “The makers like to see finished products and to build them, modify them and use bits and pieces of them in their own design.”

He said they like to see projects with available software to download with schematics.  “We are offering more and more of those types of resources on our website,” said Yin.

While Mouser and other small volume distributors service makers, so do larger distributors. The maker movement is having an impact on Arrow’s business model, said Alan Bird, president of Arrow’s Americas Components business, based in Inglewood, Colo.

“Over the last several years we have pivoted our business model to meet their unique needs.” said Bird. He said Arrow has made investments in a user-friendly repository of on line data sheets, reference designs, schematic capture and design tools used by makers. The technical information and tools help makers take their idea for a new product to create a prototype and then to production of small quantities of the product. Arrow also provides engineering expertise, prototype services and manufacturing expertise to makers.
Bird said to support makers, Arrow has formed an alliance with crowd funder Indiegogo to create a crowdfund-to-production platform. Arrow has integrated its design and production platform into Indiegogo’s crowd-funding engine. The program provides Indiegogo entrepreneurs direct online access to Arrow’s design tools, engineering experts, prototype services, manufacturing support and supply chain management.

Assessing projects
With the alliance, Arrow assesses select Indiegogo projects for their technical feasibility, manufacturability and overall impact. The idea of the alliance is to help crowd-funded companies bring their products to market fast, said Bird.

“It is obviously good for us to partner with makers just as they are starting out and being exposed to a lot of exciting ideas. It allows us to guide them hopefully to the best technology area” for their product, said Bird.

Bird said Arrow often gets involved when a maker has an idea for a product, but little else. When a maker calls Arrow, a lot of them “don’t have a design yet. They’re just starting out and they might say ‘hey I got a great idea but am not sure how to get there,” said Bird. The maker will be looking for help to design a product, find funding for it to build a prototype and find a manufacturer to produce it.

In some cases, a maker may have a design and a prototype, but the product may not be manufacturable at a price point that it needs to be and the maker is looking for ways to reduce the cost of the product, said Bird.

Arrow has helped many makers bring products to market, said Bird. For instance, it provided product support to company called Solar Roadways, which has developed durable solar panels for roads, parking lots and sidewalks that create energy the same way that solar panels for homes do. Energy generated power streetlights and signs. The company is funded by Indiegogo and received government grants to develop its technology and products.

Arrow has also helped an agricultural startup called Bella Ag develop a product that developed a product so ranchers can identify sick animals in a herd and treat them without having to give the entire herd antibiotics.

The company with Arrow’s help developed a small device using sensor technology that is ingested by animals. The device monitors their movements.

“We were able to help them with defining, designing and producing a solution that can determine which cow was ill because of the animal’s movements,” according to Bird. “My understanding is that when you have an animal that is ill, but not exhibiting any outside physical signs, they actually move differently than when they are healthy,” he said.

So when a sick cow is identified, it can be removed from the herd and treated. The rancher does not have to give antibiotics to all the animals in the herd and by removing the sick animal, it prevents the sickness from spreading to other animals.

Whether it is IoT or agricultural products, wearable devices or consumer products, distributors say that the maker movement will continue to grow and result in more customers and sales for distributors.

“The fact of the matter is it is easier today than ever for a lone individual, a maker who has an idea, to commercialize it,” said Michael Knight, senior vice president of TTI Americas, based in Fort Worth, Texas.

“There are crowd funding and incubator programs. There is a whole infrastructure out there that will do prototyping, packaging and distribution,” said Knight. “You can have an idea and turn it into a business and scale it. I think the influence of the maker movement is greater than any of us realized. It is so pervasive,” said Knight.

The continued growth of maker movement is good news for distributors because distributors have demonstrated they play an integral role helping makers.

“We are the Sherpas,” said Bird. “We are the ones who guide them and get them to market,” he said.