Official Newsletter for Flip Electronics Customers, Suppliers and Vendors
August 2020
Flip Electronics Introduction Video
Flip Electronics
Flip Celebrating 5 Years and Counting
An Interview with CEO Jason Murphy
How did Flip get started?
Back in July of 2015, I was an industry veteran who wanted to get back into the business after leaving to pursue a software opportunity. I noticed that there were a lot of supply chain issues and problems in the electronic and technology world. The electronic/technology curve moves fast, and many manufacturers do not need to incorporate all the latest technology features into their products. For example, medical devices, defense/aerospace applications, or even standard industrial equipment are products designed with the intention of being produced for many years. Their current product is just fine, and they want it to last for 10 or 20 years, not 3 to 4 years.
For these industries, it can be very costly to redesign their products, which may include recertifying their products. However, no company has ever made solving these problems the focus of their business. Since I had experience in both independent and franchised channels, my vision was to help these companies with a solution for these very painful and disruptive supply chain issues.
So like many others, one day sitting at the kitchen table with my wife, we came up with the idea to create Flip.
What was the environment you wanted to create for Flip?
Since most of my friends and family were the ones encouraging me to get back into the business, I realized that the people were one of the things I missed most about the industry. That’s why I made sure to create an environment that has the “feel” of a family. We are not only business associates but friends. We enjoy each other’s company. Everyone understands their role and contribution to the bigger goals. Everyone’s input and ideas are valued, and we have created an atmosphere where ideas get heard. All individuals are treated with equal respect. While we might not always agree, all ideas are heard. At the end of the day, we are all rowing in the same direction. Lastly, we have fun! It is not just about the end goals; the journey has to be fun each and every day.
What values does Flip bring to the industry that others do not?
Our value proposition is even more true today than it was in the beginning. Flip enables OEM’s to support production of products far past the normal EOL product life cycle. We also provide an “authorized” sourcing model that alleviates quality and counterfeit risk and uncertainty. We help these end users avoid the grey market, which eliminates unnecessary costs. This evolution was made possible by gaining more partnerships and credibility over the years.
On one side, we are protecting people from uncertainty in the quality of their components. On the flip side of things, we are adding value to the component manufacturers, as they did not even recognize the value of this material before us.
What would you like to say to your clients and support throughout these past five years?
On behalf of myself and everyone in the Flip family, we would love to thank every customer, partner, and client who has made the past five years the success story it has been! Without the support of every one of you, we wouldn’t be where we are today. I am looking forward to many more years to come.
Jason Murphy CEO
From one employee at the kitchen table, to now dozens. 5 years in the making!
Gray Markets: Causes and Cures
by Frank V. Cespedes, E. Raymond Corey and V Kasturi Rangan
An estimated $7 billion to $10 billion worth of products are sold every year in the United States outside manufacturers’ authorized distribution channels. For these producers, controlling gray market distribution presents a serious problem. Or does it? Is it always a problem? When is it a symptom of more fundamental marketing issues? Can it also be an opportunity for a manufacturer?
Let’s look at one situation. Some customers of a leading disk drive maker buy the computer component at volume discounts. But instead of “adding technical value to the products” (as the purchase agreement requires), the customers resell “raw” drives to major computer dealers, systems houses, OEMs, and end users. The manufacturer calls these customers “pseudo-OEMs” because they buy on OEM volume discount terms, operate on low gross margins, and undercut prices set by its authorized distributors.
In interviews, people at several levels in the company voiced concerns about the gray market, but often for different reasons. One person doing liaison work with distributors said, “When one of our distributors loses a sale to a pseudo-OEM, two things happen. First, the branch manager lets me know about it in seven different languages. Second, that distributor loses motivation to push our product.”
A district manager expressed another viewpoint: “I get different stories from salespeople about pseudo-OEMs because some salespeople depend on them for a big portion of their quotas, and some do not. The result is tension in the office, often between people who share the same cubicle.