There is no shortage of complexity in the firearms industry right now.
Demand is flat. Consumers have less discretionary income. Companies are still working through inventory issues. And everybody is waiting to see what the next election, regulatory change or unexpected market disruption will do to sales.
So, naturally, the answer is to develop an equally complex business strategy built around a new collection of buzzwords.
Or maybe not.
According to Chris DiCenso, the companies best positioned to grow are the ones doing the basics better than everybody else.
DiCenso has looked at the firearms industry from several angles. He most recently served as CEO of importer SDS Arms. Before that, he was president of distributor Camfour and founder of Growth Strategy Partners, where he advised manufacturers and other founder-led businesses on growth, profitability and operations.
From each of those vantage points, he found the same thing.
“Successful companies, regardless of the environment, apply the fundamentals and do them very well,” DiCenso told me during a recent interview for QA Outdoors.
Those fundamentals include building the right team, developing a sound strategic plan and executing it well.
That last one is important.
Good execution doesn’t simply keep a company moving forward. It also tells leadership when something isn’t working and when the plan needs to change.
That seems particularly relevant now that the firearms market may finally be reaching the bottom of its long post-COVID decline.
In his recent column for The Outdoor Wire Weekend Edition, "Demand Is Flat. In This Market, That’s Wicked Good News!," DiCenso made the case that flat demand could mean the market has finally stabilized after several years of contraction.
That’s the good news.
The less-good news is that a stable—or even growing—market doesn’t automatically make your company successful.
During the pandemic surge, a company could post 25% growth and still lose ground if the overall market grew 50%. If demand improves from here, it will lift a lot of boats. The question is whether your boat rises faster than the others.
Waiting for a stronger market, a favorable election or the next regulatory buying surge isn’t a growth strategy. It’s just waiting.
Companies looking to outperform the market also need something consumers can clearly distinguish from the sea of similar products already competing for their attention.
In other words, differentiation.
“You need to have a differentiated product and let people know you have a differentiated product,” DiCenso said. “Basically, create differentiation and articulate that differentiation.”
Sounds simple.
Apparently, it isn’t.
Some companies launch products that aren’t meaningfully different from competing offerings. Others may have a legitimate point of difference but never clearly explain it to distributors, dealers or consumers.
Product innovation can drive sales, but only when customers understand why your new product deserves their attention—and their money.
The same focus on fundamentals applies behind the scenes.
Companies need reliable data, accurate financial reporting and a clear understanding of which products actually generate gross-margin dollars. They also need to know how quickly inventory is moving and how often their key products should be in stock.
In "How to Reduce Your Inventory and Increase Your Fill Rates," DiCenso outlined the ABC inventory-classification system, which places greater attention and higher service levels on the products most important to sales and profitability.
It isn’t new. It isn’t sexy. And nobody is likely to build a keynote presentation around it for SHOT Show.
But it works.
And that’s really DiCenso’s larger point. Many companies don’t need another complicated theory. They need to use the proven tools already available to them—and use them consistently.
Leadership can’t control the broader market. It can control whether the team is aligned, whether the product is truly differentiated and whether the company executes its plan faster and better than the competition.
The market may have finally found its floor. Which companies rise from here will come down to the fundamentals.
– Paul Erhardt, Managing Editor, the Outdoor Wire Digital Network