Value-added service continues to be one of distribution’s biggest sources of growth. About 37.3 % or $12.9 billion of the Top 75 electronic distributors’ sales were derived from value-added services last year. That’s up from $9.7 billion or 42.6%. Nearly all of the Top 75 distributors offer value-added services.

Distributors are optimistic that value-added services will drive growth in 2001. Nearly 50 of the Top 75 distributors report that value-added services will contribute to sales growth this year.

The survey also reveals that 18 distributors derive 50% or more of their sales from value-added services. That’s up from 14 last year. Eighteen distributors say value-added services account for 20% to 49% of sales. That’s down from 20 distributors in 1999. The remaining distributors derive 19% or less of their sales from value-added services.

While traditional value-added services such as product modification and IC programming will continue to add to distributors’ profitability, many electronics distributors are redirecting some of their focus on technical and engineering support.

To provide its sales force with greater technical competency, All American created its All American Technical Sales (ATS) program in 2000. The distributor also recently opened its All American Technical Center to serve as a 24/7 Virtual Design Center to support engineers.

Insight created account development managers who are put through rigorous technical training to better serve OEM customers.

Wyle Electronics, now part of Arrow Electronics, launched a RF Vision business unit about one year ago to support RF engineers. Avnet continues to add programming centers. The distributor currently has 16 programming centers worldwide.