Avnet Inc., a Phoenix-based worldwide distributor of electronics products, is on course to exceed $700 million in digital commerce sales in its current fiscal year ending July 1, 2017, CEO Bill Amelio says.

Amelio attributes that to “better than expected revenue at Premier Farnell,” a United Kingdom-based electronics distributor Avnet acquired six months ago for $1 billion.

Premier Farnell specializes in selling electronics components and systems to electronics engineers across an international network of 48 e-commerce sites under the brand names Newark.com and Farnell.com. It also operates element14.com as a social community where engineers can share information and learn about Premier Farnell’s products.

CEO, Avnet Inc.

Avnet is also undergoing other changes that are boosting its bottom line in some cases while cutting into it in others. On the plus side, it received $2.6 billion in cash and stock earlier this year when it sold its Technology Solutions division—which works with dozens of software vendors and other technology suppliers to deploy cloud technology and data center systems for corporate clients—to Tech Data Corp., a long-time competitor.

But it also recently took on $1 billion in costs related to changes it has implemented with purchasing agreements with its suppliers. The company is also deploying a new global enterprise planning, or ERP, system to help it better manage its information on sales, inventory and other operations worldwide. The new ERP system—it didn’t identify the supplier—is estimated to cost between $75 million and $125 million and take up to 24 months to complete, Amelio says.

Nonetheless, the changes afoot play into the long-range growth strategies of both Avnet and Tech Data, the companies say. Avnet, in addition to the newly acquired Premier Farnell, also operates Hacker.io and MakerSource.io, online communities where I.T engineers worldwide can share ideas and get information on technology. Going forward, Avnet will continue to develop digital tools for its customers to help them find the components and the assistance they need to build and maintain technology products and systems.

“We have accelerated investments in our digital tools and services to leverage our online community that we’ve developed with Hacker.io, MakerSource and Premier Farnell,” Amelio said on a recent conference call with stock analysts, according to a transcript of the call provided by Seeking Alpha. “From tools that provide engineering-proven block diagrams to online optimization tools to help with component selection, we are rolling out new services that will enhance our customers’ experience and improve their speed to market.”

For Tech Data, which operates the e-commerce site Shop.TechData.com and processes more than half of its customers’ orders electronically, the Technology Solutions business will help it increase revenue from providing electronic systems to corporations and consumers. “This transformative transaction will position us as a premier global I.T. distributor with the most diverse end-to-end solutions from the data center to the living room,” says Bob Dutkowsky, CEO of Tech Data.

Tech Data and Avnet say they also plan to cooperate on providing Internet of Things technology systems that embed internet sensors into machinery and other products and systems to monitor their usage and, in some cases, automatically trigger electronic orders for replacement parts and service.

Avnet says it has more than 110,000 customers and some 600 suppliers in 125 countries. The company says it expects to compile between $17.3 billion and $17.7 billion in revenue for the fiscal year ending July 1, 2017. (Its Technology Solutions unit would have contributed additional revenue of approximately $8 billion.)

For the third quarter ended April 1, Avnet reported (not counting Technology Solutions):

• Sales of 4.44 billion, up 8.8% from $4.08 billion a year earlier;
• Gross profit of $629.99 million, up 20.9% from $520.94 million;
• Net income of $271.77 million, up 120.1% from $123.46 million.

Tech Data says electronic sales accounted for more than half of the $26.235 billion in sales it reported for its fiscal year ended Jan. 31, 2017

Tech Data, No. 57 in the B2B E-Commerce 300, is a finalist in this year’s IR Excellence Awards for B2B website design and for overall B2B online operations. Premier Farnell was a finalist in 2015 and 2016 for the overall category

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