𝐍𝐚𝐯𝐢𝐠𝐚𝐭𝐢𝐧𝐠 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫 𝐀𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧𝐬: 𝐓𝐡𝐞 𝐒𝐡𝐚𝐫𝐤𝐬 𝐀𝐫𝐞 𝐂𝐢𝐫𝐜𝐥𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐏𝐂𝐁 𝐒𝐮𝐩𝐩𝐥𝐲 𝐂𝐡𝐚𝐢𝐧

Your PCB supplier has been acquired. The news is out, and your sales rep is suddenly using words like “synergy” and “seamless transition.”

In today’s bare board market, the sharks are circling. Big-box brokers and conglomerates are aggressively gobbling up smaller, independent PCB suppliers. 

But will this acquisition benefit you as a board buyer? Will you gain access to new capabilities and better pricing through these supposedly grand economies of scale?

Or will it lead to higher prices, a maze of corporate red tape and a drastically reduced level of service?

I’ve been in the bare board business for over 25 years. I’ve seen this cycle from every angle—as a salesman for fabricators, as the founder of a fast-growing distribution company and now as the co-founder of DirectPCB. 

The reality is that your relationship with the supplier and the level of service will almost certainly change. 

When a “shark” takes a bite out of the market, what was once an efficient, symbiotic relationship often becomes bloated and impersonal.

Here are some proactive steps you can take to protect your PCB supply chain when your supplier gets swallowed up:

1. Secure a Meeting Before They “Get Around” to You

Don’t wait for the new supplier’s transition team to schedule a courtesy call, especially if the acquired firm handled a significant portion of your PCB spend. Request a meeting immediately. 

Pay close attention to how receptive the new management is to your request. If they push you off, that’s your first red flag. When you do meet, be prepared to ask pointed questions to get the lay of the land. You need to know who is really running the show now.

2. Calculate Your New “Pond Size”

Try to ascertain exactly where your orders stand within the larger entity. What often happens when a massive broker or manufacturer swallows a smaller competitor is that loyal customers instantly become smaller fish in a much bigger, shark-infested pond.

What was 5% of your old supplier’s revenue before may now only be 0.5% of the new mega-broker’s revenue. Ask the new entity point-blank what percentage your sales represent for them. The larger the percentage of business you have with the acquired vendor, the better your leverage. If you fall below a certain threshold, expect to be treated like it.

3. Brace for Pricing Leverage Changes

Will you still be considered a target account for the larger vendor? Will the potential for “superior PCB buying power” of the larger entity offset your company’s reduced significance?

Spoiler alert: probably not. Be prepared that you will not have as much leverage as you once did on pricing and service. In fact, the newly enlarged supplier may even raise prices to politely shed customers they no longer deem desirable or profitable enough for their new corporate model.

4. Anticipate (and Question) Personnel Changes

Plan on personnel changes happening, usually sooner rather than later. Ask exactly how the new vendor intends to ensure a smooth customer service transition.

The dedicated support staff you’ve worked with for years may be laid off as the new parent company eliminates “duplication of services” to appease investors. Your reliable sales representatives may now operate under a different incentive structure that deprioritizes your low-to-medium volume, high-mix orders. Or they might be let go entirely because the acquiring company wants to feed its existing sales force.

5. Protect Your Strategic Manufacturing Locations

Review any written agreements you have with the supplier, as well as those you have with your own customers. Do they contain clauses about changing manufacturing locations or subcontractors?

When a broker is acquired, the new parent company is highly likely to try to consolidate manufacturing. They will want to move your business to PCB manufacturing locations that support their margins and operational efficiencies, not necessarily the locations that are best for your specific orders. 

Because of your customers’ specific quality or compliance requirements, you must let the new vendor know which orders cannot be moved and get it in writing that they will comply.

6. Audit the Fine Print

Update and review whether the new entity will honor your existing agreements:

• Can they maintain the nondisclosure agreements (NDAs) and hold-harmless agreements you require?
• Are the payment terms the same?
• Will delivery times change?
• What happens to the RMA process?
• Does the new entity have a different warranty policy?
• Who oversees quality control on the ground?

Crucially, be sure to give the new supplier a copy of your most recent PCB fabrication spec. And if you don’t have a solid fab spec, make it a priority to create one immediately. It is your best defense against unauthorized changes.

7. Develop a Plan B (and C)

This is vital, especially if both vendors involved in the acquisition were previously supplying PCBs to your company. Instead of two companies competing for your orders and keeping each other honest, you now have only one vendor. They will be significantly less motivated to remain price sensitive.

8. Test the Market

Reach out to alternative PCB vendors for quotes right now. Other suppliers are well aware of industry acquisitions and may be eager to rescue alienated customers. They will often offer aggressive price breaks and a higher level of service to win your business, regardless of your annual PCB spend. At the very least, having an alternate source for your PCBs gives you necessary leverage with your new, larger vendor.

9. Don’t Be Afraid to Walk Away

If the acquisition experience proves detrimental to your company—if lead times slip, quality drops or prices spike—cut the supplier loose by slowly migrating your business elsewhere.

10. Bypass the Bloat

If your acquired supplier is a broker, look closely at the value they are actually providing versus the cost they are adding. Some of today’s dedicated PCB brokers are massive operations that have become a business within a business, adding significant markup without adding proportional value.

If you need help managing that process without the bloat of a big-box broker, there are better, more cost-effective ways to manage your high-mix, low-to-medium volume PCB procurement.

Want more info? Reach out to us!