Chairman's Commentary: February 2016

Feb 24, 2016

Now that we’re settling into 2016 and it’s off to a strong start, the real question is: “Is this sustainable?” I would argue it is sustainable, and I may even be willing to make the bold prediction that 2016 will be our best year yet. Here’s my explanation for why, and how your business can capitalize…

Let’s consider 2012, for example. As the candidates – on both sides of the aisle – took their arguments to the American people, we witnessed steady sales growth as we hurled toward Election Day. In my experience, the industry will experience a four to eight percent sales increase in a presidential election year. Many participants do much better when their product line is focused on what’s popular.

This year’s political landscape, however, is unique. Our sitting president is willing to resort to executive actions in to limit Second Amendment rights, and there are two candidates in the race who openly support the president’s ideals. Furthermore, we’re about to witness one of the most contentious Supreme Court nominations in U.S. history.

Regarding this nomination process, I’ve taken particular interest in gauging consumers’ understanding of the dangers in seating a liberal justice. We all know recent landmark Second Amendment decisions were 5-4 in our favor, including the decision that the Second Amendment is an individual right. It’s scary to think that any right that’s so explicitly spelled out is open for interpretation, and consumers are realizing it.

After we mix political and judicial instability together with the ever-present threats to our national security, I’m confident the demand for our products and services will remain strong throughout 2016.

I also base my predictions on the forecasts of the public companies in our industry, many of whom are NASGW partners. Take a look at Ruger (RGR), Smith & Wesson (SWSH), Vista (VSTA), Dicks (DKS) and Cabela’s (CAB) for insights.

Essentially, what I’m saying is that the stage is set. Now, it’s on you to capitalize. So, how do you capitalize? It starts with the supply chain.

The supply chain is becoming more sophisticated as many of our manufacturing partners have implemented new ERP systems which streamline processes and result in more efficient and more reliable operations and inventory forecasting.  Therefore, I would highly encourage wholesalers to be prepared to improve your forecasting models and modernize your inventory planning efforts to complement those undertook by our manufacturing partners. Make no mistake, a more efficient supply chain is a more profitable supply chain. And, it’s the key to capitalizing on a hot market.

Go forth and conquer!

All the best,

Pete R. Brownell

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