We've seen many changes in the wholesale firearms business during the past 20 years. Undoubtedly, the next 20 years will see even more changes in the industry.
The astounding pace of technology is one of the significant factors that will shape the wholesale firearms market. Wholesalers who effectively harness emerging technologies will carve out a real competitive advantage.
The Internet is one of those technologies that is greatly changing our businesses. The "Net" puts more power in the consumer's hands. No longer will potential firearms customers need to scan and read through piles of magazines or drive hundreds of miles looking for information on a firearm. They can simply "log on" to the Internet and within moments, research product specifications, market availability and identify preferred purchase locations -- all without aggravation or leaving the comforts of home.
Davidson's is the first firearms distributor to utilize the power of the Internet in support of our customers, the firearms retailer. In November 1998, Davidson's launched a web site: Gallery Of Guns (www.galleryofguns.com). The site features detailed specifications, full-color pictures, industry news, market availability and quick search on thousands of models. Combine these features with the only Gun E-card in the industry, up-to-date special offers and rebate opportunities from the industry's premier manufacturers, and Gallery Of Guns is destined to become a haven for our customer's customer.
We are currently recruiting firearms enthusiasts to the site via national television advertising, Internet banners, keyword purchases on search engines and traditional advertising. This marketing effort is all designed to ultimately drive consumers to the dealers serviced by Davidson's.
This is where the wholesale firearms distribution business is headed. Wholesalers must change the way they think of themselves and start positioning their companies as "Value Added Resellers."
Many firearms wholesalers and retailers have placed too much emphasis on low price in evaluating product offerings and positioning their products for sale. Product value is composed of many things: quality, profitability, speed of delivery, warranty, and what I believe is more important: services to help dealers protect and grow their businesses.
This includes sales and promotion support, co-op advertising, product/store differentiation programs and programs designed to generate customer loyalty and bring in new customers. It is no longer enough to simply offer a low price on products without also delivering additional valuable services to the retailer aimed at enhancing his success. Wholesalers must become business partners with their customers, not just a source of products.
The future focus on "Value Added Reselling" will also lead to other changes in the wholesaler's operation. There will be an increased emphasis on truly representing the manufacturers' products. It will no longer be enough to just stock their products, throw them in sales flyers or catalogs, run a few sales promotions, and for the most part, wait for the orders created by the manufacturers "pull through" efforts.
The "Value Added Reseller" will look to increase shelf space, increase market penetration, provide market data, participate in program development and become much more active in "pushing" a manufacturer's products. This increased involvement will mean a wholesaler will need to form strategic alliances with its manufacturers, focus its resources, and in many cases, not push competitive products.
The "one-stop" shop will become increasingly rare as sides are chosen and the wholesalers become more proactive in the success of their suppliers and customers.
Industry shrinkage and consolidation is another trend that will impact the future of firearms distribution. With pending litigation and legislation looming over the handgun industry, there is already an intensifying trend to exit or decrease the dependency on handguns. There are destined to be fewer players in the handgun market, and quite possibly in long guns.
The consolidation and shrinkage of firearms retailers may entice manufacturers to go "dealer direct," thus bypassing the wholesaler. This would be catastrophic for the wholesaler and put additional financial pressure on retailers. "Dealer direct" marketing typically requires higher purchase levels and commitments from dealers, quite possibly limiting the lines they carry. This also would be a very difficult situation for smaller manufacturers that cannot command shelf space.
To succeed in going "dealer direct," manufacturers may "vertically integrate": purchasing wholesalers in order to gain sales horsepower, small shipment processing, warehousing and credit management.
There are many trends sure to change the face of the firearms industry in the future, but the success of wholesalers will largely depend on their ability to provide quality, innovative services. Their ability to "create value" for their customers and their suppliers will determine the success and value of their company.
Bryan Tucker began his career in the retail firearms business in 1976. He joined Davidson's in 1981, working in the wholesale firearms division. He was appointed president in 1991. Tucker is the sole owner, CEO and president of Davidson's and is extremely active in the firearms industry.
He is serving a two-year term as the president of the National Association of Sporting Goods Wholesalers and the Board of Governors of the National Shooting Sports Foundation.
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|Date:||Dec 1, 1999|
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