Comment by mhb | Hacker News Reader

Comment by mhb | Hacker News Reader

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It didn't seem like all that much more evidence was required to refute your one piece of evidence that Digi-Key is evil because they don't want Octopart to list their prices.

Even if I had no evidence, my default assumption would be that they were good until confronted with significant evidence that they were evil. And between good and evil there's a nice-sized neutral middle area which it appears you have transited in one fell swoop based on your sole piece of evidence.

I'm not sure what other evidence of goodness you seek than customers' experiences with them. I have found their prices competitive - as another poster said - lower on some items and higher on others. They have treated me fairly. I don't believe that they are engaged in any immoral enterprises. I agree it would be nice if they cooperated with Octopart but to say that makes them evil is absurdly hyperbolic.

I can immediately think of some (non-evil) reasons for Digi-Key to prefer not to have Octopart include its pricing. It has invested in a web site which provides an excellent user experience and they would prefer not to make it easier for customers to use Digi-Key's web site as a reference manual for lower cost competitors (whether or not you believe this is inevitable). They would like to avoid doing business with customers who are concerned solely about price. They would like customers to purchase their higher-margin items based on past experience purchasing lower-margin items even though the higher-margin items might be cheaper elsewhere.

The problem was not so much how little evidence you supplied as how irrelevant it was. I expect Philip Morris has good customer service too. When convenience stores order cigarettes from them, they probably deliver reliably. Would you argue that that makes Philip Morris a good company, ethically?

Your theories about why Digi-Key wouldn't want their prices to be publicly known are very inventive, but Occam's razor suggests the explanation is what is usually is in such situations: They are trying to suppress competition.

I really don't want to make any more comments, because I'm sure they are equally irrelevant. However, since I grew up in the town where Digi-Key is located and once dated the daughter of a bodega owner, I must proceed.

First, bodega and convenience store owners don't order smokes from Philip Morris, they get all their stuff from various distributors. The stores themselves are usually locked into one distributor for junk food/smokes and another for liquor. Depending on how low you go on the convenience store food chain, often times the "distributor" is just a guy with a truck. Thus I'm not sure a good online business could be made aggregating the various prices of cigarette distributors. A useful startup idea would be a location-based mobile app that would tell you which bodega nearest you carries the cheapest cigarettes. You could make it non-evil by selling ads for nicotine replacement therapy that you would have to click through before getting the price for a hardpack.

As far as Digi-Key goes, they aren't the biggest distributor of electronic components... maybe in the top 20, or maybe top 10. However,they probably ARE the biggest distributor that will sell small lots to hobbyists. They are also one of the major employers in a small town in a rural area that has had a flat economy for decades. The only other employer of note is the snowmobile factory. Most of the money in the area is made by landowners who are paid your tax dollars to not farm their land, or else grow sugarbeets, one of the least efficient ways of obtaining sugar. Since they would have had to pay the most, those same farmers voted against school improvement bonds every year I lived there...so I'm going to have to go with "evil" on stupid farm subsidies but now I'm really digressing...

I'm going to have to vote "not evil" for Digi-Key. They know they are competing on price and are doing what they can to avoid losing business. If sales go south, they have to lay people off. Most of the employees don't have anywhere else to go find work. From my limited personal experience, there isn't a CEO caste at Digi-Key with golden parachutes who all stay rich whether or not the company does well. If they lose business, everyone gets fucked. I'm guessing they are cockblocking Octopart out of fear. This sucks for Octopart and is inconvenient for people prototyping electronics, but is it evil?

EDIT: what's really evil is that unknown or expired link error!

Digi-Key is the largest small-volume distributor of electronic parts in the US. They do $1.2Bn per year in revenue of which $700M is done online. Their gross margins are about 50% and their business is growing at 20% per year.

When Microsoft accused Linux of violating 50 software patents, most people thought they were pretty evil. The claims were frivolous and their aim was to preserve their market share at the expense of consumers. Likewise, Digi-Key makes the frivolous claim that by displaying their public information and linking to their webpage, Octopart is acting illegally.

This is not a debate about whether Digi-Key is good for the town of Thief River Falls or if Digi-Key should be making money. They have as much right to make money and keep their employees happy as Microsoft does, but when they use their muscle to wrongfully stifle innovation at the expense of consumers, it shouldn't be surprising that some people would call them 'evil'.

wow! Digi-Key FTW! They're doing about 1000 times better than they were when I was in town. I had no idea.

_by displaying their public information_

What is public about it?

This information is freely available on their website (not to mention their widely distributed paper catalogs). Google has crawled much of Digi-Key's website and has this information on their servers. However, Digi-Key is specifically targeting Octopart (actually, I'm not sure if they're threatening Google, my uninformed guess is no though). The only thing we're doing differently than Google is distilling the information in a way that allows part buyers to compare prices readily. There are other part information websites also crawling Digi-Key, but Octopart is one of the only ones doing price comparison - again, I'm just guessing, but I doubt Digi-Key is threatening any of these other websites.

Also note that courts have generally held that pricing information is not protectable by copyright (prior to publication it might be a trade secret, but once you publish it, it essentially becomes a fact in the public domain). This has not stopped large retailers from using novel legal theories (or carefully timed DMCA takedown requests) to stop or chill 'Black Friday' websites, of course, but the law is actually reasonably clear in this area.

No, but a priori I would assume Philip Morris is a good company. Knowing what their product is, I revise that opinion.

It looks like there is a larger back story to this than was originally obvious to me from your essay and that has loomed very large in your estimation of Digikey's character. Framing it as a David and Goliath morality play is good marketing but I think a more nuanced view is reasonable - they're somewhat less good than I originally believed.

The reason Paul is calling Digi-Key evil is because they are actively trying to kill Octopart in order to preserve their monopoly pricing, not because they won't cooperate. Octopart needs as much cooperation from Digi-Key as Google needs from Wikipedia.

Monopoly is a misnomer here. Is Wal-Mart a monopoly?

The parts supply industry is not an industry of monopolies. There are a few large names--Grainger, McMaster-Carr, MSC, Digi-Key--that probably account for 25% of the market, and then a very, very, very long list of names most people have never heard of.

Ironically, Ma & Pa Electronics are frequently the ones with the highest prices. Large distributors like Digi-Key are often less expensive than small local shops.

Monopoly isn't the most technically accurate word, but behaviorally I'd say that Digi-Key is acting like a monopoly. Typically monopolies like to hold on to existing business practices rather than adapt to changing market economies. Regardless of 'good', 'evil' or 'monopoly', it seems to me that it is inevitable that online price comparison will start to become the norm for most markets. Digi-Key's reaction to this is very monopoly-like (in another world, they could choose to work with us and make sure they get the lion's share of traffic from our site).

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