Today is the start of the final quarter of 2024 and in business terms that means we’re in a race to close out the year on a positive note…and positive sales.
But this year has been rough. We were told it’s Bidenomics, but what most of the country has faced is something much different. Call it, Joeflation.
Inflation, along with the high interest rates, has put most of the country in a malaise. Not the Jimmy Carter signature malaise but something certainly close enough that those that thought a Biden Administration would be an Obama third term have come to realize we got Carter’s second term.
In a slow economy with its reduced consumer buying power manufacturers turn to one of two things – if not both – to weather the storm. They are, #1) releasing new products, which will sell at or about their suggested retail price, or a minimum advertised price (MAP), or #2) run sales promotions.
Back in March of this year the National Association of Sporting Goods Wholesalers (NASGW) hosted a webinar about the demand forecast for 2024. The idea behind the webinar was (and still is) that you need a data-driven approach to your forecasting in order to get it right, or at least not make any major mistakes.
Without getting deep in the weeds on the complexities of forecasting, we still have to overcome the issues of a rather miserable economy, increased household debt, increased credit card debt, and an overall reduction in disposable income due to inflation.
Throwing a huge curveball into all this was the early assumption of a Trump/Biden election versus the now Trump/Harris race. Elections always have an impact on firearm sales as the Second Amendment gets treated like a piñata by, well, I don’t think I need to tell you.
In the midst of this, manufacturers, distributors and retailers are all dealing with inventories they’d like to move before the end of the year.
In others words, my friends, here come the sales promotions. Companies facing warehouses full of stagnant inventory and needing to make room for future products are finding ways to sell off that inventory, often to the advantage of consumers who have as yet not opened their wallets.
The final quarter of the calendar year is always the busiest sales period with firearm sales rocketing up as we head towards Christmas. This year NASGW’s March forecast called for a handgun market that would be flat to down by 5%. Rifles up 5% to 7%. Shotguns up 3% to 5%. This puts the overall firearms projection at up 2% to 5%. Ammo would be flat to down, mostly based on availability, while optics would just be flat.
However….
Those numbers changed dramatically in NASGW’s September 2024 revised summary forecast. Here are the highlights, or lowlights if you rather:
Handguns – Down 15% to 20%
Rifles – Flat to down 5%
Shotguns – Down 5% to 10%
Overall Firearms – Down 10% to 15%
Ammo – Down 5% to 8%
Optics – Down 5 % to 10%
Right now we’re seeing some of the major companies releasing (and shipping) new products. As we head into the annual NASGW Expo, taking place October 15 through 18 in Kansas City, we will see more new products, though likely scheduled for a January SHOT Show announcement.
For those companies not in a position to introduce and ship new products, sales promotions are the coin of the realm when it comes to juicing revenue as the year closes out. That makes it the ideal time to shop for a new gun, optic or accessory that you may have been holding off buying.
Sales promotions are coming, and they take several different forms from rebates to value-added package deals. These are all before the usual direct-to-consumer promotions we’ll see around the Black Friday period.
You’ll also want to pay attention to companies running specials during Amazon’s Prime Days October 8 and 9. However, these won’t include firearms, but accessories and optics will certainly be on the deals menu.
The sales you’ll see now are geared towards moving product off dealer shelves. Depending on how deep a manufacturer is in unsold product, or how far off their earlier revenue projections they are, will determine how aggressive the promotion.
If the company hasn’t done their forecasting correctly, or found themselves in a more competitive market than anticipated, that aggressive promotion could turn into an all out clearance sale with its subsequent bulk sale to one of the handful of cut-rate resellers.
Companies making that kind of move could be in a worse position than they can handle.
If you happen to see a promotion “extended by popular demand” you can probably guess that the demand wasn’t for the product itself but from a CFO demanding more revenue. The companies extending promotions may be deeper in the inventory hole than others and finding it difficult to dig their way out.
With these companies and products, now is the time to buy, though a better deal may be down the road depending on how deep in the hole a company happens to be.
Regardless, we’re in a buyers’ market so spend wisely…but spend.
— Paul Erhardt, Managing Editor, the Outdoor Wire Digital Network