Firearm Forum- Working with Cabela's

Cabela’s Confidential Information1

Doing Business With Cabela’s


The Shooting – Hunting Industry

• The Bottom Line2001 - $5.193 Billon in Sales2006 - $5.355 Billon in Sales(Based on US Fish and Wildlife Surveys.)

•Hunting licenses have gradually declined 15% since 1991. Projections out to 2021 show an additional 8% decline.(Based on US Fish and Wildlife Management Surveys.)


What To Consider Before YouPresent Your Product


What’s Going On In Retail?

•Traditional Store Front

•Catalog

•Internet

•Social Media


Where Does My Product Fit In?

•Who will want or need my product?

•How big is the potential market?

•Why is my product better than existing ones?

•Who and what is the competition?

•To patent or not to patent?


How Do I Market My Product?

•Again, who will want or need my product?

•What’s the most effective media outlets?

•Do I really need Michael Waddell?


How Do I Get My ProductInto The Consumer’s Hands?


Sell To Distribution / Wholesaler

•Lipsey’s, Sports South, Big Rock

•Pluses – dedicated sales staff, phone sales, website, get product in front of a lot of potential customers, product shipped thru distribution warehouses.

•Minuses – the larger players generally won’t buy from Distributors; competing with a lot of similar product; profits cut 3 ways.


Present To Buying Group

•NBS, Sports Inc.

•Pluses – membership comprised of independents, smaller regional chains, founded as a co-op. Hold Trade Shows; the price and terms negotiate with the co-op.

•Minuses – very few large players use this; multiple, small shipments to a lot of smaller retailers; profit cut 3 ways.


Sell Directly To Retailer

•Cabela’s, Bass Pro Shops, Scheel’s, Sportsman’s Warehouse, Wal-Mart, Dick’s.

•Pluses – higher volume; wider exposure to the consumer; generally financially stable; generally more profit for manufacturer and retailer.

•Minuses – very demanding; rigid procedures; feel like you lose control.


Sell Directly To The Consumer

•Pluses – keep all the profit; control your destiny; maintain your independence.

•Minuses – all expenses are your responsibility; higher over head – marketing, liability, shipping, advertising; minimal exposure to the consumer.


Introducing a New and Innovative Product to the

Marketplace


Topics of Discussion

•Innovation – Where are we today and where we need to go in the future.

•Research and Development – Dollars budgeted to R & D have been significantly reduced due to economic conditions.

•New Product Introductions and Partnering with Cabela’s and our multi-channel business model to launch new and truly innovative products and maximize ROI.

•Taking a Concept or Prototype to the next level.

•Q & A.


Need More Innovation

•Our consumers are starved for new product innovation.

•Shooting Sports in general are lagging behind other segments of the outdoor industry, such as Archery, when it comes to new product innovation and introduction.

•Our core customers are willing to spend their discretionary income on new and innovative products.


Research and Development

•R & D funds have been curtailed due to our current economic conditions.

•Companies have been focused on minimizing losses without eliminating jobs rather than on R & D.

•Economy stabilizing; need to turn focus back to product R & D and introducing new products to the marketplace rather than creating another “me too” item that already exists.


New Product Introductions

•Determine who you want to partner with to unveil or market your new product.

•Determine which channels of distribution work best for your production capability.

•Determine MAP pricing or MSRP that are attractive to both the consumer and retailer to maximize ROI of initial launch.

•Make absolutely sure patents have been filed so you are protected against product copying.


Partnering with Cabela’son New Product Launch

• Go to the following link: http://www.cabelas.com/content.jsp?pageName=NewProductDivision

• Please read and follow the instructions carefully.• Fill out the NEW Product Review Form entirely (see

next slide).

• Once the form is complete, submit either electronically or via mail to the address provided.


Partnering with Cabela’s on New Product Launch

•Once the form and photos of the new item are received by our New Products Division they will be distributed to the appropriate buying office.

•Buying office will review submission and determine if product submitted fills a niche or fills an assortment gap.

•If interested, Category Manager will be in touch to further discuss item cost, suggested retail price, additional advertising media (social, print, TV), product availability and shared risk.


Partnering with Cabela’s on New Product Launch

•Once initial conversation has taken place Category Manager will put together a marketing plan to launch product that will suit both our objectives as well as vendor’s objectives.

• After placement has been determined, a Vendor Agreement along with a Proposed Product Listing will be sent to vendor. This is the beginning of our relationship together.

•Item placement communicated to vendor along with sales forecast. Placement of item will be correlated with product availability date.


Taking a Concept or Prototype to a Finished Product

•Currently we don’t manufacturer any goods; however, we have strong relations with several vendor’s/manufacturer’s.

•Many vendor’s/manufacturer’s are willing to assist in the manufacturing/marketing of a new product providing they are capable and interested.

•Vendor/manufacturer would pay royalty on each unit sold or annual sales volume.

•Again, please make sure you have patents filed.


Taking a Concept or Prototype to a Finished Product

•Some vendor’s/manufacturer’s simply do not have the production capacity to take on new product aside from their own.

•Cabela’s can assist with putting you in touch with some of our direct (offshore) manufacturer’s if this is of interest.

•Cabela’s is also willing to discuss the purchasing of patents and have manufactured under the Cabela’s brand.


Recap of Introducing our Consumers to Innovative Products

• Our industry is lacking innovation; something our key consumers are looking for and willing to spend on.

• Partnering with Cabela’s to launch a new product offering is a fairly simple process, but can take time initially.

• Taking concepts and prototypes to the next level.

• Focus needs to be spent on truly innovative products and ideas and the quickest means of marketing to get them in front of our consumers.


Current Trends and Future Needs in the U.S. Firearm and

Ammo Market


Current Trends

Steady growth in firearm and ammo categories. Fueled by:

1.New participants in shooting sports: Recreational/Target marketPersonal/Home DefenseWomen

2.Innovation = Sales and Market Growth

3.2009 – What we learned and future effect to our industry

4.2010 – Firearm sales have maintained pace.

*New participants are increasing their activity in shooting sports.


Market Conditions

1. Product shortages still exist. *Ammo – Hunting rifle, handgun, Rimfire*Firearms – Compact handguns, value priced hunting rifles, Rimfire handguns. NICS data is encouraging.

2. Demand for value priced, entry-level product remains strong.

3. Demand for high end products remains good.

4. Demand in next two years will be impacted by political climate.

5. Manufacturers have gained efficiencies as a result of 2009. Better understanding of what the “ceiling” can be.

6. Excess inventory levels in the market. Some manufacturers did not react fast enough when consumer demand slowed. Examples include semi auto sporting rifles, 223 ammo.

7. Hunting Market – The industry must find ways to grow participation.


Opportunities for Manufacturers

Unique/Niche product categories. - Success by current South Dakota based manufacturers

Commodity metallic ammunition – market is currently underserved.

Hunting rifle, FMJ handgun and Rimfire ammo.

Steel/Aluminum case ammunition – not currently produced in U.S. We must rely on foreign vendors for this product. Consumer demand is driven by low price of this product.

Youth and Women’s Market – need more product to gain their interest and participation. Example – reduced recoil product.

Non-Traditional Ammunition. R&D needed to find affordable lead substitutes. Greatest opportunity for shot shell ammunition to gain better performance than steel.


Made in South Dakota

Our customers demand American made productsBenefits of the Midwest

- Quality Workforce- Logistical Advantages- Midwestern Pride

South Dakota has embraced our industry. Manufacturers should take advantage of the opportunity and operate in a state that supports the shooting sports industry and promotes a business climate for success.


Questions?

Firearm Forum- Working with Cabela's

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