News / Electricals shipper cuts out forwarders in new B2B sales and distribution platform

© Abhipol Suruwatari

Forwarders? No need. Inventory management? No need. There is a new model in town.

An electronics shipper has set up a platform for its B2B network that allows customers and traders to track supply, buy excess inventory and book logistics and distribution – all without a ‘middleman’.

Houston-based Smith, the 11th-largest global distributor of electronic components and semiconductors, has an online platform that allows verified customers to trade products, with the associated logistics being managed by the shipper.

SmithTrade matches excess inventory from approved sellers with customers to trade thousands of components, all funnelled through Smith’s warehouses for evaluation and testing before being shipped.

The platform offers visibility into the distributor’s global supplier network, inventory levels and customer base. It allows sellers to set their own prices, sell when it suits them and update excess lists, while buyers can use the auction-style platform to look for bargains or buy direct to save time.

The platform also provides market intelligence and allows users to create watchlists to track demand and products in transit, and monitor inventory and key components.

While Smith caters for a broad customer base, from multinationals to small players, the new platform is aimed primarily at smaller clients that do not have access to advanced inventory management, said Todd Snow, VP of global purchasing.

Smith sources, manages, tests and ships billions of components to clients in every industry. It leverages a global footprint of ore than 20 locations across four continents, with four major distribution centres, located at its home base in Houston, and in Amsterdam, Hong Kong and Singapore.

Transactions conducted over the SmithTrade platform can involve inventory stored at Smith locations as well as customer facilities, but Mr Snow expects nearly all of it will be moved from customer locations.

“It’s almost a B2B with us in the middle. We help facilitate the transaction,” he said.

He explained that historically, the company’s focus had been on helping customers find products they need, but over the past 8-12 months there hadbeen a growing need for help in managing excess inventory. This has brought greater attention to solutions like vendor-managed inventory, consignment programmes, sale of non-consigned inventory and customer matching.

And, rather than employ 3PLs or forwarders, Smith runs its own logistics programmes, working directly with carriers.

“Everything is handled in-house,” said Mr Snow, adding that the bulk of the international traffic moved by air. Shipment by container vessel or surface transport (except for local delivery) is the exception. The decision on what transport mode is used is up to the customer.

Smith also emphasises the importance of vetting vendors and carriers. In the wake of the pandemic and amid the war in Ukraine, new players have emerged, particularly on the vendor side, that claim expertise in supply chain matters and an ability to get hold of products, said Mr Snow.

“We’re more conservative. We do our due diligence, and probably run some trials first,” he added.

Initial reactions to the launch of SmithTrade have been lively, he reported, and emphasised that, on top of the ability to manage inventory better and save money, the platform also had a sustainability dimension.

If one company has a million pieces of excess inventory and another is looking for the same volume, historically the latter would order production of one million units, while that excess inventory would be scrapped and end up as landfill, he said.