Tab Electronics Guide to Understanding Electricity ... - Sciences Club

24 Chapter One
Buying from Surplus Dealers
Before proceeding, let’s define the word surplus as it applies to electronic
parts. Surplus means “extra stock.” Surplus electronic components and
equipment are not substandard or defective, they’re just extra stuff that
has to be moved out to make room for new. To understand the surplus
market, here’s how a hypothetical electronic item might get there. Most
modern electronic printed circuit boards are manufactured in mass
quantities by automated processes. Small “runs” of electronic equipment
are not cost-competitive in today’s market. If a medium-to-large-size electronic
manufacturing firm wants to market a new product, they might
start out by making 10,000 pieces. If the marketing idea goes sour, or if
the product is improved and redesigned, or if the company goes out of
business, thousands of these pieces might be left over and sold to a surplus
dealership at below manufacturing cost. The surplus dealership can
then sell these items far below retail cost and still make a profit.
A typical surplus dealership will sell more than just manufacturers’
overruns and excess stock. Because all of the branches of the armed
services use considerable electronic equipment (much of it specialized),
many surplus dealerships sell government surplus equipment as well.
Usually, government surplus equipment is used and obsolete, but that
doesn’t mean it’s not valuable. Many surplus dealerships sell factory
returns or factory-refurbished items. Factory returns are defective items
sent back to the manufacturer for repair or replacement. Factory-refurbished
items are factory returns that have been repaired by the manufacturer.
Surplus dealerships often buy industrial salvage for resale. The
surplus dealership might sell industrial subassemblies (control panels,
circuit board assemblies, etc.) by listing all of the “goodies” the buyer
can get out of it, or they might salvage the subassemblies themselves,
and sell the individual components for a greater profit.
Electronic surplus dealerships are great places to buy electronic components.
With few exceptions, the components will be new and in
“prime” condition. Besides offering low prices on specific components,
the grab-bag specials are an excellent way to stock up your general
inventory.
If you are lucky, you might have one or more electronics surplus
stores in your local area. Because these stores do not cater to the general
public, you might have to do a little investigative work to find the ones
nearest you, but it will be worth the effort. If you live in a rural area,