Marshall Industries

Dec. 1, 2003
From early in the life of World Wide Web, it has been clear that one day the Internet would make a considerable impact on the way the world in general,

>From early in the life of World Wide Web, it has been clear that one day the Internet would make a considerable impact on the way the world in general, and wholesale distributors in particular, conduct business. Now, a few years into the revolution, a handful of companies are distinguishing themselves as constant innovators whose early works may suggest a model on which other distributors can build.

>From the beginnings of the Web, Marshall Industries, Inc., an electronics distributor based in El Monte, Calif., has earned a reputation for consistently finding some of the best early uses of the technology. Marshall was one of the first distributors to dive into the Web, with a site at Having now made the Internet its own, Marshall continues to innovate.

Marshall Industries is one of the four largest electronics distributors in the country, in terms of sales volume. In 1996, Marshall sold approximately $1.16 billion worth of semiconductor products, connectors, capacitors, computer systems and peripherals, production supplies, tool kits, instrumentation and workstations-all the nuts and bolts of the computerized, networked world. Its customer list includes companies on the cutting edge of technology-original equipment manufacturers making computer mainframes and peripherals, office equipment, communications, control and medical equipment and instrumentation, and aerospace systems.

Given the nature of its business, one might expect online transactions to be the norm in Marshall's market. Yet a 1996 report by the National Electronic Distributors Association (NEDA), Chicago, Ill., showed that electronics distributors' participation in real electronic commerce remains low-most of NEDA's members had a presence on the Internet, but few were actually doing any business there-and an update earlier this year found that distributors have more interest in EDI than Internet-based electronic commerce. This gives Marshall an edge.

The Marshall site fairly bristles with electronic commerce functions. It offers users the ability to search a catalog for product information, to order products using account numbers or electronic cash accounts. Users can also expedite their orders online via the site, download code from the engineering design lab or link to freight forwarders and other suppliers and view demonstrations of combined Internet voice-data-video broadcasts.

The site has some creative twists as well, such as a live help feature that offers an online chat room where users can discuss products and applications in real time with a staff engineer. There is even a page where you can watch the action in Marshall's warehouse in El Monte via a live video feed.

The company is working on a new offering called MACRO Link, an acronym for Marshall's Agreement to Coordinate Resources and Organizations. The product, according to a report in Electronic Buyer's News, will use intranets and data warehousing to link a supply chain around the world, including engineering, forecasting, production and distribution.

Taking a dominant position in Internet-based transactions gives Marshall an edge with companies that want to do all their business online, but that lead may be short-lived, say some observers. To date, even in the highly technical electronics industry, the volume of sales flowing across the Internet is small as a percentage of total sales. Once sales move in that direction, the ability to capitalize on that shift and make incremental sales will probably bring a transient surge in sales, and the cost advantages will be quickly competed away.

This is not to say that dominance on the Web is not worth the effort, or that it won't pay for itself. Visibility is a definite benefit. Robert Damron, an equity analyst who tracks Marshall for Cleary Gull, Milwaukee, Wis., views Marshall's Web efforts as more of an advantage in terms of visibility, branding and building customer loyalty than in the operational efficiency of handling orders via the Web.

Marshall's site has won a bunch of "Best Site" awards from various organizations and is recognized far outside its own market as a leader in Internet marketing. The recognition that comes from these efforts could pay handsomely down the road.

Top executive: Rob Rodin, president Founded: 1954 1996 sales: $1.16 billion Employees: 1,600 Headquarters: El Monte, Calif. Products: Semiconductor products, components, connectors and interconnect products, computer systems and peripherals made up about 94% of the company's 1996 sales. (Semiconductor products alone accounted for 76%.) The other 6% came from industrial MRO supplies for electronics manufacturers. Primary markets: Marshall sells to approximately 30,000 customers, the majority of which are small and medium-sized companies in the computer, communications, capital and office equipment, industrial control and equipment, and systems integration businesses.