Avnet, the world’s third largest electronics distributor, runs several online communities where electronics engineers can give each other advice on everything from prototyping to manufacturing hardware. The Phoenix, Arizona-based company said that the services—Element14 and Hackster—have added almost half a million members over the last two years, pushing the population over a million users.
Avnet is trying to take advantage of the recent resurgence in hardware. Two years ago, the company invested around $840 million to buy rival distributor Premier Farnell, which runs Element14, where users work together to solve each other’s design challenges. The company also acquired Hackster Incorporated, which operated a smaller community focused on teaching programming and hardware design.
The acquisitions are aimed at reinforcing Avnet’s component business. The company is betting that electronics engineers will prototype new products using assistance from other Element14 members and parts ordered from Premier Farnell. When the product takes off, they can order production volumes from Avnet, which offers manufacturing and other services to companies lacking in the supply chain department.
“Everyone wants to find the next GoPro,” said Ralf Buehler, Premier Farnell’s senior vice president of sales and marketing.
The company has declined to say how many community members are converted into paying customers. The main challenge for Premier Farnell is keeping its warehouses stocked to handle smaller orders for smaller customers. The average order placed with of Premier Farnell is less than $500, and so the company has been making major inventory investments over the last year.
The company has pumped up its inventory from $350 million to $444 million over the last year, replenishing its most popular products and adding 77,000 new components. Premier Farnell is focused on covering more of the average customer’s bill of materials. It is also attempting to hold enough inventory to support more and more online orders not only among entrepreneurs but also what Buehler calls professional makers.
“They may not be registering with their company email but over time we learn that they’re professional engineers as well as makers,” Buehler said. But targeting these customers requires restraint from Premier Farnell, which launched its online community in 2009. “We want people to get unbiased opinions,” he told Source Today. “We don’t moderate the community or censor what happens on it.”
Avnet has targeted other phases of product development. Last year, the company acquired Dragon Innovation, which offers software that can predict production costs and refine products for manufacturing. The company also connects customers with Chinese factories. In addition, Avnet has partnered with Kickstarter to offer startups engineering support as well as discounts on components and services.
“The Internet of Things is not only a hardware problem,” Buehler said in an interview at the EDS Summit conference last month. “Hardware is very often not the core of an idea. But customers need the hardware” – whether custom circuit boards or the tiny Raspberry Pi computer that Premier Farnell has shipped more than 14 million units of over the last half decade – “to bring their idea to life.”