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May 19, 2016

Ace’s Sporting Goods — Outlook 2016


IMG_1924Welcome back to our continuing series where we’re talking to manufacturers and retailers about their outlook for 2016 and how they’re handling the pressures, peaks and valleys of what looks to be an extraordinary year. This week we talked to Ben Romanoff, General Manager Ace’s Sporting Goods in Washington, Pennsylvania.

Gradually taking over from George, his father and current president of the store, Ben oversees roughly 5,500 square feet of retail space housing close to 4,000 inventoried firearms.

 

NSSF: How has 2016 started off for you and what are you anticipating as the year rolls along?

Ben Romanoff (BR): We’re looking for an overall seven to 10 percent increase, which isn’t a lot, but we’re seeing a lot of impulse buys that I’m guessing are related to the swings in the election polls and caucuses. We saw the same thing after the terror attacks in Paris and San Bernardino. Those runs were short-lived, and we think people were over-reacting to the incidents. Since we’re continuing to see those short-lived spikes given whatever is going on in the headlines, our strategy is to not feed into that. We’re not going nuts with out inventory. We want to maintain and meet demand, but we recognize that these impulse buying periods are going to come and go quickly right now.

We saw a lot of new customers in December, mostly those seeking their first concealed carry firearm, and most of them were saying, “I can’t believe I’m here.” We absolutely sit and talk them through the options, including price, asking them lots of questions. But at the same time, with the December holiday rush and a very crowded store, we had to work hard to balance the needs of all these new shooters against the steady customers who already know what they want. The balance we found was with those steady customers. Facing long lines and having to listen to us explain over and over the basics to these new customers, we’d take our steady customers aside and tell them, “Hey, put yourself in their shoes, you were there once.” They got it, and that taking of time with people new to shooting and firearms to explain everything absolutely gets an acknowledgement from them. Does it guarantee they’ll return or get seriously involved in the shooting sports? No. But, you can probably guarantee that “No” if you don’t make the effort.

 

NSSF: Anything selling particularly well right now?

BR: Used gun sales are huge for us. We are a volume dealer with this category, and the consumers in our area know it. We pay the most and we warranty all our used guns for a year. It’s a huge part of our business, including the trading aspect. Of course we look at the condition, and we put all our used guns on the website, which drives a lot of traffic. Our turn ratio is about 93 percent on our used, which is phenomenal.

When it comes to new products, though, we’re definitely keeping a close eye on things that trending in our store. For instance, our base models MSRs are selling well, and we’ve seen an uptick in AR10s. Every morning we run a list — what sold yesterday, last week, and the last week a year ago. By doing that, we recently discovered several models that we didn’t sell any of last year but are selling strongly now. This is how we keep our ears to the rail and match our inventory to those shifts in consumer demand.

 

NSSF: Are you having any difficulties procuring inventory?

BR: I have to admit things have been a little tough with some manufacturers. Lots of retailers had holiday promotions, discounting guns when the market was carrying itself and they didn’t need to discount those firearms, and now those guns are sold out and very tough to get. Some of that frustration we’re able to counter by being part of a buying group, which keeps us in regular contact with our buying agents there. It’s crucial to keeping inventory stocked. For instance, not too long ago we learned that some really popular Glock models are five months backordered. We wouldn’t have known that if we didn’t have those lines of communications open.

 

NSSF: Any other tips for working with distributors?

BR: You have to hold the hands of your best distributors to counter harder-to-get product while also diversifying the stock you do have. Some distributors want you to be signed on to them and no one else, but that’s not a smart move in a volatile market like the one we have now. Networking with multiple distributors also gives us a chance to shop price. We’ve seen the same model gun with a $50, even $100 price difference between various distributors, and that big a difference totally affects your margins. Why wouldn’t you shop for the best price? Your customer is.

Right now we’re taking time to talk with the distributors we haven’t historically done a tremendous amount of business with — and they’re also seeking us out. They have to know why we’re not buying from them, so those conversations provide options. Keeping those lines of communication open is always important.

 

NSSF: How about those manufacturers you deal with directly?

BR: Our factory reps are critical to our success. The ones we work with the most have provided unparalleled support. One of the ways we make sure the love goes both ways is that for those buying programs that provide our store with a free gun for every so many sold, we let our staff earn those guns. Most stores keep that free product for inventory. But by letting our staff share in the bonuses they helped the store earn, that galvanizes our store from the sales floor up to the manufacturer.

Everyone works to benefit everyone else. That extra effort towards relationship building on a grander scale allows us privileges. One example is that it allows us to obtain harder to get guns from time to time for our really special customers making custom or unusual requests. We don’t abuse those favors with the manufacturers, and since they know that and how cohesive our staff is at selling the rest of their product lines, it all pays off.

 

NSSF: Anywhere in the supply chain you see a need for improvement?

BR: This whole industry is an industry of relationships. Unfortunately, we’re seeing many distributors who don’t have a strong relationship with the manufacturers, and that means they can’t get the guns they want when they need them. I really think it’s a sign of the changes in technology — email instead phone call, automated ordering systems — the personal aspect is somewhat removed. That means you have to cover all your buying bases — multiple distributors, examine the advantages of buying clubs and absolutely build strong relationships with the manufacturers who sell direct and with who you’re a stocking dealer.

 

NSSF: Of course, the overriding reason for the hectic market this year is the political climate. If the elections swing in the favor of the gun industry and we see a downturn, what’s your plan?

BR: Don’t go overboard now, don’t over react. I think lots of people learned hard lessons in 2013. If I had any advice to offer, it would be to ask yourself this: If it shows up tomorrow, is it going to sell? From there, take advantage of the deals when you can,  but if you’ve never bought a SKU before and you suddenly think you need to order 10,000 of it, you’re not going to sell it even if you could get the order filled.  The last thing I’d say is that particularly for bigger stores with larger staffs, owners, GMs and store buyers need to look beyond their paper reports and talk to their folks on the sales floor. I talk to managers, because while I have the final say and write the checks, they’re the ones out there with the customers. And not only does that give me an improved picture of what’s going on with our customers, one improved beyond the spreadsheet and historical store data, it also gives us a chance to get all the staff to look at the inventory and know what needs to be pushed. For instance, if they have a customer looking at a couple similar guns but we have two of one model and nine of another, then it’s in the best interest of the store to urge the sale on the model we have more of. Those things aren’t intuitive to every sales person, so that’s why we have these conversations from top to bottom.

 

NSSF: It’s our understanding you have quite a bit of area competition. How are you thriving amongst them?

BR: We do indeed have competition. There’s a relatively new Field & Stream store across the street, as well as a Gander Mountain, and there’s a Cabela’s 20 minutes away. We do not compete with them. For instance, we divested ourselves of archery equipment and clothing some time ago. What we are, and what sets us apart from them, is a gun store, emphasis on “gun.” We have 4,000 or more firearms in stock, and we have the SKUs no one else has, right down to the ones with the oddball calibers. We differentiated ourselves, and that’s what drives our success.

 

A big thanks to Ben for his time talking with us. All signs are pointing to a great year for him, George and Ace’s Sporting Goods — and that’s everything we could ever want for any of our members.