Last year was very bad for the Top 10 independent electronics distributors. In buyers' markets, marked with excess inventory and overcapacity, sales dive for independent distributors. In 2001, the Top 10 independent distributors had sales of $879.3 million compared to $2.37 billion in 2000.

Sales declines were so bad, in fact, that several independent distributors did not even participate in this year's survey.

In 2000, independent distributors benefited significantly because supply was tight and prices were high for many components including capacitors, memory and analog ICs. In contrast, huge excess inventories and weak demand from several key industry sectors including contract manufacturing, networking, telecommunications and wireless characterized 2001.

"Clearly independent distributors fill a big need when the market is expanding rapidly. In a situation like last year, when the market for computers and telecommunications was collapsing, there wasn't a lot of demand in the independent market," says Bob Ackerley, president of Smith & Associates, Houston, Texas.

"There was a lot of work being done for excess inventories, but clearly that is different from the environment in 1999 and 2000 when there was very strong demand for servers and telecommunications equipment. In a down cycle independents feel it pretty sharply but the converse is also true. When there is a big ramp up in technology the independents typically have good years," Ackerley says.

Although 2002 could be a pretty soft market, Ackerley does report a first-quarter pick up in business. "A lot of the excess inventories have been worked off," he says.