Hi Timothy:

Good question. The idea was that a distributor would buy and stock many parts 
from a manufacturer and would get an overall discount.  For example if the 
normal price for 1,000 parts was $1.00 the disty might pay $0.75 for them since 
they were also buying 1,000 of 100 other parts.

Now the disty can mark up those parts and sell them for more at lower 
quantities.  In exchange the manufacturer does not have the hassle of selling 
one or two parts.

But in today's world where the only labor involved in shipping an on line order 
is the shipping, manufacturer's are now selling direct.  I recently bought 26 
PIC uC direct from Microchip and including the shipping from Malaysia the cost 
was less than from any of the distys.

The advantage of a disty is that if you're building a product and can source 
most if not all of the BOM from one place you spend much less of your time in 
the ordering and follow up phase.  This time savings may be more valuable than 
saving a little on one part.

-- 
Have Fun,

Brooke Clarke
http://www.PRC68.com
http://www.precisionclock.com

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