There’s no fear of contradiction when I write that the past two days pieces on the “evolution” of the industry’s traditional two-step (manufacturer-distributor-retailer) model has caused more than a small amount of conversation.
Since we’re industry-focused, that’s generally what we’re here for. Often, we find that there’s very little conversation between interested parties, especially in the business side.
So we don’t mind when our readers pick up the conversation threads and build on them. Especially if they don’t mind when we share their observations with the rest of our readership in return.
Here’s a sampling of the observations:
From a retailer in Georgia:
“…as a larger firearm retailer, we have been absolutely abandoned by the distributors a long time ago- we saw the writing on the wall when True-Value stopped selling guns and Ashland Buckeye went out of business back in the 1990's.
I left the retail and went to the manufacturer side of the firearms business in the early 2000's..and realized that things get complicated.
As a store, we are transitioning to eliminate distributors as much as possible not only from a product standpoint, but from an information standpoint…many dealers simply do not trust distributors with knowing what we do. I don't trust most manufacturers either, after being on that side.
What it comes down to, if you're in business, you've just got to be savvy enough to surround yourself with the best people possible, and love them.”
One longtime industry player offered his observations - based on his more than four decades in the firearms industry.
“…I completely agree with Mike (Fifer, former Ruger CEO)…the distributors serve a very important role to the 20,000 dealers across the country. However, the changes that are taking place really do concern me. I don’t think some manufacturers are looking at the credit lines that are shrinking from the independent dealer.
Between Acusports (USC Ellett Brothers, Jerry’s sports centers, Simmons and Outdoor Sports), the industry has lost somewhere around $1.2 billion… with the others talking about closing, I believe we’re going to lose between $1.5 and $2 billion. That’s an industry shrink of about 20%.
…Credit lines the back bone of the independent dealer. Dealers buy from several different distributors and work off the credit lines to buy product to service their customers. This is a big hit to many Independent Dealers.”
As you can see, there are several factors influencing today’s business climate. Next week, we’re going to continue to take looks at the changes in the distribution model we may reasonably expect in the coming months, how the capital markets are evolving- or constricting- and we’ll take a stare into the tea leaves to see if we can get some idea what’s likely to impact the outdoor industry the most in 2020.
We’ll keep you posted.
—Jim Shepherd
