Typically, sporting goods distributors assure the efficient flow of product to dealers, reducing shipping costs by mixing and combining product orders to provide the all-important buffer between manufacturing lead times and customer demand.

As the nation’s oldest and largest firearms distributor, Sports South has gone far beyond those basic dealer services. Through innovation and consistent management, this 178-year-old, fifth-generation family operation has earned a reputation as the most respected distributor in the firearms industry.

The company was founded on the simple fundamentals of integrity, family, tradition and drive — all principles that have served the firearms community and the Dickson family’s business since it was founded in 1841 by two Welsh immigrants. Originally an apothecary store, the fledgling company also began supplying firearms and ammunition to local farmers, lawmen and soldiers. The company focused on supplying everything those customers would need from firearms and medicines to plaster for cabin walls.

The roots of that original company continue through two distinct distribution companies — Morris & Dickson Co. in pharmaceuticals and Sports South in sporting goods and firearms.

Tactical Retailer had an opportunity to speak with Tony O’Con, marketing manager for Sports South.

TR— What should dealers know about Sports South?

TO— Sports South has always had the goal of having the right product in the right place at the right time. The past decade has seen a lot of volatility in sales due to the political market and also the new generation of Millennials starting to purchase sporting goods. That market and sales volatility creates big gaps between sales and the ability for manufacturers to scale up or down quickly in order to meet those demands or slowdowns. Sports South works diligently and tirelessly to assure a consistent and timely flow of product to our dealers and ultimately the consumer.

We also help dealers manage their inventory much more effectively than just being another offsite warehouse. Technology can help keep a business running at its peak profitability while maximizing revenue. We have focused on technology to deliver on the core goals; technology like the direct feeds of our inventory into POS, our innovative website and timely reports on inventory-turn ratios set us apart. These, plus use of our Electronic Gun Book, have driven huge jumps in revenue and profitability for our dealers.

TR— How has technology and online sales impacted the distribution business?

TO— Online shopping delivers “endless aisle” functionality that allows customers to shop all product options including in-stock, remote-fulfilled, backordered and special-order products. Online retailers can offer 50,000 products while stocking 10,000. In comparison, most brick and mortar stores have gotten away from that business model in favor of a narrow selection of 10,000 best sellers with a deep stocking of those products. Customers today want a wide selection — this is why some dealers are having challenges.

From a sales perspective, the biggest concerns brick and mortar retailers have is providing that perception of selection and also meeting the order and fulfillment expectations of the online shopper. Dealers never want to be in a situation where they do not have or cannot quickly purchase a product that a customer wants. If a dealer cannot get the product the customer wants, it is just too easy for that customer to walk out of a store, do an online search in the parking lot and make the purchase. This is why many dealers are seeing a huge increase in online-purchased transfer firearms when those sales could have been in-store sales. Dealers want to have the ability to close the sale immediately and service the customer — that is where the technology Sports South provides dealers simplifies the sales process.

Early on, we focused on integrating technology into the dealers’ systems so the shopping and ordering experience was seamless to both the dealer and also the consumer. It’s no secret that Sports South is the fulfillment warehouse behind some of the largest retail sporting brands in the industry. We have made the integrations so smooth for many dealers that when a customer asks if something is in stock, the answer can almost always be yes with availability for pick-up or delivery in just a few days.

TR— What technology has Sports South implemented to service its dealer base?

TO— Sports South is widely recognized as a leader in driving cutting-edge technology into firearms retailers. For us, the technology is just not a me-too strategy. The roots of our strategy go back to WWII and MIT-educated members of the Dickson family. This very early use of technology gave Sports South a huge advantage at a time when most other distributors were still using paper order slips.

Early on we recognized the value of creating a digital database of retail sales, inventory and stocking records that we could easily run reports against. Today, that data is more valuable than gold and allows us to see customer buying trends so well that we actually work with manufacturers to recommend manufacturing cycles. We have developed advanced predictive analytics that almost give us a crystal ball in anticipating what our sales will be. When tied with dealer tools such as our Electronic Gun Book, dealers have the ability to use the power of all that data to understand what they should buy next and to know when a sales curve has died.

TR— Can you talk a bit about the dealer tools such as the Electronic Gun Book?

TO— Sports South makes a number of tools available to our dealers, including our inventory and shipping systems plus other sales planning tools such as the Electronic Gun Book.

We were actually the first to lead the market delivering web services that provide direct integration with dealers. We went so far initially that we were providing computers to dealers so they could look up inventory and other data on our systems. Our perspective is that “Our warehouse is your warehouse,” based on the almost-instant availability of our inventory to dealers.

With innovative web services and continual improvements to our technology and processes, our Sports South dealer systems have proven to be easily integrated with the firearm industry’s leading e-commerce and POS solutions. We even have an in-house team ready to assist with the integration process. And there’s no charge to the dealer for those services — it’s part of our commitment to our dealers. There are also a number of e-commerce and POS solutions on the market that are pre-integrated with Sports South such as Celerant, Ammoreach, Gearfire or Core Store. We have an auto replenishment system as well. Overall, we have a host of services that allow a customer to order on a dealer’s site and have the order shipped directly to the customer, complete with a custom invoice.

The Electronic Gun Book is more than just a digital copy of the paper gun book; it helps dealers understand true shelf life, inventory turns and the profitability of their inventory. Its development allowed shelf-life reporting and delivered better forecasting of next best restocking product. It helped answer questions such as, “Should I just replenish the Glock I sold or buy more ammo too?” The goal was to help dealers maximize turns on inventory even if it was at lower margins because inventory turns maximize the most revenue and profit for the dealer. We also wanted dealers to get away from replenishing on products that had very long shelf lives/low turns just because they had always stocked that product.

TR— The very long stability of Sports South has been very important.

TO— Our longevity and stability has allowed Sports South to work with dealers and manufacturers in a way that other distributors simply cannot support from infrastructure, technology or fiscal capability standpoints. Everyone knows we will be around tomorrow and, as we have just seen in the market, volatility in the market can also occur at the distributor level. We maintain the highest inventory in the nation, and it’s all paid for — we have no debt. Sports South does not use terms unless manufacturers have situations where it is highly advantageous for us to take advantage of a deal. Manufacturers know they will get their money and dealers know that we pay our bills and will continue to receive product from the manufacturers.

When we add new technology, we are using last year’s previous profits, so dealers are never paying for our upgrades with higher up-front costs. Technology such as our cutting-edge warehouse with robotic automated picking and packing systems drop overhead, reduce dealers’ costs and get the products out faster. We analyze every possible point in the dealer engagement to assure they are getting the most efficient and cost-effective solution to consistently drive the right product, price and place methodology. Sports South has maintained its leadership position through a cycle of continuous innovation and through the relentless pursuit of new ideas and new thinking to drive long-term success and growth. Our dealers are like our family, and some have been with us for three generations. We want to assure their stability through wise stewardship of our business.

TR— What products have changed the industry most?

TO— AR-15s and the MSR variants have significantly changed the market. Just a short time ago, hunting marketing dominated sales and there really were only a very small handful of manufacturers in that market. Today, the AR format is in nearly every category for the hunter, precision shooter and competitor, and now we have hundreds of manufacturers with thousands of different product options.

TR— Where do you see the industry going?

TO— Brick and mortar dealers are going to have to deeply consider the concept of breadth vs. depth. We have become accustomed to seeing a hundred options of one product and getting products next day or in two days from sources such as Amazon Prime, but customers still want that little bit more information and a chance to touch a product and to feel and evaluate it in a store. Those dealers who are moving to stocking a lot of breadth — with inventory only one or two deep — are seeing faster growth. We have a lot of dealers who are embracing the endless aisle concept online and are boosting sales significantly. Restocking frequency can usually be within just a few days and still fulfill the customer need for selection, so there is no reason for dealers to have a dozen of something in stock unless it is magazines or ammo.