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Targeting 1998 ammo sales.

High Customer Interest In 21st Century Ammo Means Premium Sales For You!

Something interesting has happened to the ammunition market. While overall sales are down people are finding they have the time to shoot all those guns they bought in '94. Premium handgun and rifle ammunition sales are strong along with low-end plinking ammunition of all calibers. Smart, aggressive dealers are catering to these markets and watching their ammunition profits soar.

Perhaps the market is best summed up by Don Hacklander, one of the largest distributors of police ammunition in the country.

"Aggressive innovations in technology, like Federal's Personal Defense Ammunition and CCI's Gold Dot can add up to serious retail sales," Hacklander said. "Dealers should keep track of what police agencies are issuing, because many citizens like to emulate what the cops carry, or at least try to come as close to it as they can."

Hacklander stressed that high-end, high performance rifle and handgun ammunition is what sells in police and consumer markets. The recent purchase of Federal by Blount will be very advantageous for dealers, Hacklander predicted.

"This merging of cutting edge design and technology from what will be essentially one organization will give a Federal/Blount dealer a strong base to draw upon," he said.

This kind of unusual, creative business venture, as exemplified by Federal and Blount, is critical to keeping the industry viable in today's marketplace. The constant pushing of design ideas to the outer limits of today's technology keeps buyers interested.

Hunters and shooters, kept abreast of new products by the firearms press and advertising, appreciate the gain in performance and value represented by the ammunition on dealers' shelves today. It's nearly the 21st century and customers are looking for tomorrow's performance possibilities today.

Who's Buying?

Target shooters, hunters, plinkers and personal protection customers are all viable potential sales in today's market. Richard Carreon, vice president of sales for Federal Cartridge Corp. gave Shooting Industry some interesting statistics.

"While the numbers of hunters remain stable right now and growth in this segment of the industry is very slow, the numbers are still impressive." Carreon said. "It's important for dealers to remember the same 14 million hunters are their repeat customers. These are the people who local dealers see season after season as they shop for hunting and some target ammunition.

"About 46 percent of the hunters today are 35 to 54 years old and have relatively high disposable incomes coupled with a high degree of free time. This group is historically anxious to spend some of that time and money on their hobbies.

"Statistically, these medium- to high-end hunters have replaced their entire gear at least once over the past five years. Perhaps most importantly, they are not always shopping for the cheapest deal they can find. They don't necessarily want the best deal on .30-'06 hunting ammunition, for instance. They are often technology-oriented and are looking for anything that will give them an edge in the field. Hence the very strong sales of virtually every company's high-end, or premium hunting ammo lines."

This same interest in technology has driven manufacturers into pushing the performance of their self-defense ammunition to new highs. With the rapid expansion of concealed carry laws, customers want the best product, not necessarily the cheapest, to protect their families.

Federal's Premium Personal Defense ammunition is at the forefront of this market-specific line. Sales are very strong for all calibers offered and there doesn't seem to be an end in sight for this trend.

What's Hot

Rifles, shotguns and handguns purchased in the rush of 1994 are now being given a workout on the range. Shooters need inexpensive target and plinking ammunition, but demand quality and value at the same time. However, as Carreon said, not all of your customers are looking for the best price. They want quality and performance. Track your premium hunting and self-defense ammunition sales, and see what's been happening there. If the numbers seem low, feature them in prominent locations, use signage and highlight magazine articles that sing their praises.

Winchester's Supreme Hunting loads, Federal's Premium hunting ammunition, Black Hills and Norma's moly bulleted loads and even the current crop of dedicated cowboy action ammunition are all strong sellers.

Jeff Hoffman, owner of Black Hills, continues to lead the industry in the cowboy action shooting ammunition arena. His introduction of virtually all of the old loadings has lit a fire under the industry.

"Cowboy ammo is a strong part of my business and I wouldn't want to give it up for anything," said Hoffman. "Those shooters buy at least four guns to compete, and that means they will need plenty of ammo to feed them. Today's cowboy action participant is often a professional and as such, doesn't always have the time to reload. A dealer should take the time to cater to that shooter's needs."

Winchester, Ten-X, 3-D, Hornady and PMC all offer dedicated cowboy loads, which proves this market segment is serious business.

Also on the "hot list" are non-toxic Tungsten Waterfowl loads by Federal. These loads out-perform conventional steel shot, giving hunters a powerful tool for the field. By keeping ahead of the concerns of environmentalists, these kinds of innovations create a win-win situation for all concerned.

High-performance .22 rimfire loads in the guise of highly accurate target ammo and maximum performance .22 Magnum loads are very popular as well. Remington now has a line of .22 ammo and Federal's newest .22 Magnum featuring a Sierra bullet has shooters excited.

How To Sell It All

With the industry tabulating billions of dollars in sales yearly, there is plenty to go around. Some tips from manufacturers and successful dealers may help you keep your market share.

High employment levels mean people have more disposable income than they have seen in years, shifting the balance of power back to the dealer. When customers walk in today they more often than not want to buy. Make it easy for them.

Carreon offered these suggestions.

"We see dealers trying to stock too much," said Carreon. "For instance, a dealer might stock five kinds of low-end 9mm ammo that may vary by only a buck or so. A customer will naturally gravitate to the lowest price. Re-stock that shelf with only one low-end nine, price it right and the customer will pick that box.

"The same applies to rifle or shotgun ammo. Try stocking just two or three kinds of premium and mid-range rifle ammo. Why have 15 different .30-'06 loads when in reality three or four will probably accommodate the majority of your non-reloading customer's needs."

Of course, this may require your staff to gently educate your customers about the different loads and how they compare with others you may not have on hand.

For smaller dealers who have a tough time maintaining a large ammo inventory, consider buying close-out lots from distributors and dealing with mid-range manufacturers, like Black Hills. Dealers can often buy premium ammunition for up to 50 percent off the regular dealer price. If you're hesitant or can't afford five or 10 case lots from one manufacturer, the smaller ammo companies may be able to help.

Hoffman considers Black Hills at the upper range of what might be termed a "mid-range" manufacturer. Black Hills offers factory-new ammunition as well as re-manufactured.

"We will ship a single case, freight prepaid, to a dealer," said Hoffman. "This helps to let a smaller dealer, or even a large one, maintain a varied and interesting ammo inventory, without a back-breaking investment in inventory dollars sitting on a shipping pallet in the back room."

Creative buying tactics and strong relationships with manufacturers and distributors can help dealers keep their ammunition inventory up to date at a reasonable cost.

Dealers need to remember they are a manufacturer's customer and should expect to be treated just as they might treat their own customers.

"Dealers should expect a manufacturer to supply the training and point-of-sale material to help them sell in their stores. They've got to say, 'Hey, I'll stock your line, but these are my expectations if I do,'" said Carreon.

Too often, dealers are intimidated by large manufacturers and are afraid to call unless they want to place a substantial order. It simply shouldn't be the case and in our interviews we found virtually every manufacturer anxious to talk to dealers, hear their concerns and work with them to meet their needs.

Technological advancement in ammunition design are the best promotional tool and sale booster dealers have. Customer interest in today's high-tech ammo market was mentioned time and time again as SI interviewed dealers, distributors, manufacturers and customers. It keeps consumers coming to your store to see what's new and how the latest designs can give them an edge in the field or at the range. Keep the emphasis on performance, and ammunition sales could be one of your biggest moneymakers in '98.

Ammo Sales What's Important:

* Premium, high-end ammunition is selling strongly.

* Take advantage of distributor close-outs on ammunition, especially "white label" or generic low-end ammo.

* Tighten-up the number of SKUs on ammo. Stock two or three loads for each caliber in each brand, rather than 10 or 15.

* Displaying one brand of low-end "practice ammo" where your customers can reach it. Price it to move.

* Demand service from the manufacturer when it comes to training and point-of-sale aids. Remember, you are their customer.

* Cowboy action ammunition is a big seller in many parts of the country. Offer it in your area.

* Take advantage of the ability of mid-range ammo manufacturers to ship in one case lots, often freight pre-paid.

* Today's customers are not always price shopping. Hunters and target shooters are enjoying new freedom, with time and money to spend on their hobbies.

* Stress the new technology aspect of modern ammunition and place signs and magazine article near displays.
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Publication:Shooting Industry
Date:Jan 1, 1998
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