Service Diversification Drives Arrow Electronics - Modern Distribution Management

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Service Diversification Drives Arrow Electronics

Arrow finds growth opportunities in services that didn't exist for the distributor a few years ago

Diversification is the key to success for many distributors in today's market. Take for example Englewood, CO-based Arrow Electronics. Much of the recent growth reported by the global electronics distributor and services provider, according to President and CEO Michael Long, has come from an area that Arrow didn’t even have in its portfolio five years ago: software services, storage and security.

"Today, well over half of our sales" come from these services, Long said in a conference call to discuss Arrow's second-quarter results.

Arrow's global sales increased 3 percent in the second quarter, driven by increases in its Enterprise Computing Solutions business.

"There's been a very good path toward diversifying this business into higher value spaces that require more than just shifting the product," Long said.

Earlier this year, I spoke with Tim Kolbus, vice president of global logistics for Arrow. In that interview, Kolbus emphasized that Arrow is "so much more than a distributor today." Growth for the company now comes from a variety of value-added services that it provides its customers, from design at the front end to secure electronic asset disposal at the end of the component's usable life.

"We want to help our customers and suppliers figure out where they want to be in five years," Kolbus said. "We focus on how we can help take their product to market, whether through design services, end-of-life services, or something else. We do a lot more as far as solution selling and services than people may realize."

As other areas of the market, such as the alternative energy sector, continue to struggle, this focus on diversification throughout the electronic component lifecycle has led to a positive outlook for Arrow, according to Long.

Read more from my interview with Kolbus, Arrow Electronics Plots a Global Course.

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