Pipeline To Profits!

Everyone Wins When The Manufacturer-Distributor-
Dealer Relationship Flows Smoothly

By Pat Covert

Whether it’s oil, pharmaceuticals, widgets or firearms the endgame of any profitable pipeline is the cash register ringing up sales at the end of the line. As a firearms retailer, you’ve likely experienced a sale walk out the door if the goods weren’t on the shelf. We live in an age of instant gratification and one advantage a storefront retailer has over the online seller is being able to give your customer the goods right then, right now.

Consequently, the pipeline from manufacturer to distributor to retail must flow freely to turn a profit for everyone. For many manufacturers, they produce such a high volume of products it’s more efficient to sell their wares and ship to distributors — who then deliver a cross-section of products to you. This arrangement benefits retail buyers because they can shop for a wide range of products, not just one.

A Three-Way Street

The pipeline to profits is a three-way street. It starts when you pick up the phone, works its way up through the distributor and manufacturer network and then reverses direction with product arriving at your store. SI spoke with Kerry Bradley, the GM and buyer of Hoover Tactical Firearms, based in Hoover, Ala., about his store’s buying program and relationship with distributors.

“We work with approximately a dozen distributors,” Bradley informed. “The most important aspect of buying from a distributor is product availability. To quote retail giant Sam Walton, ‘The first rule of great customer service is to have the product on the shelf.’ If you can’t do it you’ve got nothing to sell — that’s the bottom line.”

According to Bradley, a significant benefit of working with distributors is dealers “can shop in one place.”

“Distributors carry everything from firearms to ammunition to accessories and more. You need to have a good mixture of distributors. The reason we use so many is because some carry different products and brands,” he added.

Frequent communication is essential to keep the retailer/distributor relationship in sync, Bradley added.

“I typically deal with our distributors by phone, and I’ll usually talk with a couple every morning and discuss subjects such as product availability, new products, my current stock and things like that. I also get daily emails from many of my distributors about availability, allocations and specials they may have,” he said.

The retailer/distributor partnership goes beyond simple commerce.

“Distributors do much more than take orders,” Bradley pointed out. “They offer us valuable education and ideas. Some offer training and seminars on all sorts of topics ranging from dealing with social media, making better financial decisions and getting a better return on your dollar.”

Bradley noted even though there are the occasional pitfalls when partnering with distributors, he still recommends dealers should work with them.
“Occasionally, just as in everyday life, you’ll run into issues but for the overwhelming part we have strong relationships with our distributors — and many become close friends over time. We have a great time at shows over dinners and other social events,” he added.

Distributors: The Middle Link

As a firearms retailer you know how critical the distribution link is to getting product on your shelves. Zanders Sporting Goods, a nationwide distributor located in Sparta, Ill., is a prime mover and shaker in the conveyance of firearms, archery and related accessories. In a discussion with Shooting Industry, General Manager Stefanie Zanders provided some excellent insight. Since taking the reins in 2011, Zanders has overseen the company’s expansion from a 70,000-square-foot warehouse to a remarkable 150,000-square-foot facility today.

Zanders described what she considers a successful relationship with a retail customer.

“A distributor’s success is contingent on the success of its customers. We work hard in pairing sales staff with customers to create just that — a perfect relationship. Understanding customers is the key to giving them good service and building trust,” she said.

Zanders outlined a notable difference in “good” versus “great” customer service — which can even apply to the customers you interact with on a daily basis.

“Good customer service is offering straight scoop and doing what you say you’re going to do,” Zanders continued. “Great customer service is getting to know the customer, their history and their business, in order to anticipate their needs and exceed their expectations, every time.”

Distributors also help their retail customers in ways other than supplying product.

“As distributors, we try and put ourselves in our customers’ shoes to understand how to better serve them,” Zanders noted. “At Zanders, we offer daily and weekly specials, along with a sales flyer every 45 days. Our purchasing team works hard to find and stock the best products for our customers’ stores. We also have a backorder system, which allows a customer to hold his or her place in line when a shipment comes in — they love it!”

Gettin’ The Goods

The pipeline begins with the manufacturer producing the product. Nothing will happen down the line without a smooth flow of goods. Zanders outlined the process and various stages involved.

“For larger manufacturers, we work with sales representatives. For smaller companies, we usually deal directly with the company owner,” she explained. “Our buyers have forged good relationships with manufacturers and have various ways of communicating with them. Some manufacturers bring sample products directly to our buyers and sales staff at our facility, and others are mailed to us for testing and evaluation.”

Zanders added her company’s buyers and selected sales staff make sure to attend SHOT Show and NASGW each year — where they get a good look at all the new products in the industry. “This also gives them a chance to meet directly with the manufacturer to discuss new programs and build better relationships,” she said.

As any distributor or retailer knows, a manufacturer’s inventory in many segments of the market (particularly firearms and ammunition) has been impacted due to high demand in the current political environment. Zanders highlighted manufacturers face difficulties when dealing with a shortage of these goods.
“Given the unpredictable nature of our industry and how sales are so swayed by public opinion and politics, trying to strike the perfect balance between supply and demand is a constant challenge,” she said.

What do distributors evaluate when they’re looking to add a manufacturing partner? Zanders said an important characteristic is the manufacturer will “stand behind its products, first and foremost.”

Additionally, Zanders identified a couple other characteristics of an “ideal” manufacturer.

“Such a manufacturer typically deploys a multi-stage distribution process, which means they exercise consistent business practices and pricing, understand and advertise to their market and ensure product availability. Finally, they’ll have exceptional customer service and sales representatives willing to go the extra mile — as with any good business,” she added.

As you know, keeping the pipeline to profits flowing is a challenge for all parties involved. It starts with excellent lines of communication from the manufacturer down to distributor and retailers. As in any industry there will be occasional hiccups, especially as shifts in demand affect the marketplace. The bottom line? Cultivate strong relationships and keep the door of communication wide open with your industry partners and the profits will follow!

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