Colts stocking dealer program

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Pelo801

Pelo801

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Some more (outrageous) news from the industry today - Colt is trying to blackmail dealers into joining their "2015 Stocking Dealer Program".
For those that aren't familiar, Stocking Dealer Programs are put in place by manufacturers to incentivize dealers to sell their products, such as "buy 4 pistols from group A and four from group B, and get a pistol from either group for free, along with some accessories". However, these programs are completely optional to join, since many smaller dealers wouldn't be able to meet these buy-in requirements.
What Colt is trying to do is a little different. Most likely prompted by recent financial troubles (e.g. http://www.wsj.com/…/gun-maker-colt-launches-exchange-offer…), Colt's new Stocking Dealer Program doesn't contain any free goods, and is MANDATORY if you wish to purchase any Colt products after August 1st, 2015. That's right, they are actually going to blacklist dealers that don't purchase enough of their products.
Not only that, it requires the purchase of ten fairly high-dollar pistols and rifles between Jan. 1 and Aug. 1 of this year. Although this might not seem like a lot, it completely alienates a lot of the smaller dealers that don't sell a lot of Colt products in the first place (since they're somewhat overpriced) but still want to have access to their products.
So to wrap it up, Colt is requiring any dealer who wants to continue selling their products to purchase ~$8,000 worth of firearms before August 1st, or they will be blacklisted and unable to purchase any Colt products from any wholesaler in the industry for an unknown amount of time into the future. How about that?
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Came across this on the FB today. Anyone know anything more about this? Also the articled linked in the post is pretty interesting as well.
 
How can Colt keep them from buying guns from other wholesalers? It sounds to me like it's exactly the opposite of what they should be doing and something doesn't smell right about the story.

Matt
 
Years ago during the late 1960's/early 70's they tried something similar with a dealer I knew who was in a "direct buy" program. The advantage was supposed to be that the dealer in affect could buy product at distributor price or sometimes a bit less. Dealers who didn't subscribe to this could still buy from distributors, but not for the advantageous price.

So one day the Colt sales rep. came in and told him he would have to commit for the next following year in advance. The dealer of course would not know for sure what market conditions would be then, or even expect timely delivery.

So he told the gentleman(?) to go pound sand.

Today Colt isn't making any "in demand" products that can't be bought from someone else. And I don't believe they can stop a distributor from selling to any licensed dealer. If they tried they might be sued into the ground.

Said dealer I mentioned is still in business and doing fine. :cool:
 
Yes I've got the email. You have to stock so many guns by a certain date. If I don't then I won't be able to purchase any Colt firearm from my distributer the rest of the year.
So I have to buy alot of very slow selling 1911s in order to get any Colt ARs.
 
This, from post 5
the dealer in affect could buy product at distributor price or sometimes a bit less.
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There were distributors that made you buy 5 Ruger firearms to get 1 or 2 S&W guns. No body wanted Colts. When the original 1970's High Standard Company was in trouble, they tried selling directly to dealers, skipping the distributor. It didnt help. Bye Bye Colt.
 
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It doesn't seem like a wise move.
If ever there was a time that Colt could be the tail that wagged the dog, it appears to be far in the past.
 
Yes I've got the email. You have to stock so many guns by a certain date. If I don't then I won't be able to purchase any Colt firearm from my distributer the rest of the year. So I have to buy alot of very slow selling 1911s in order to get any Colt ARs.
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True enough, but in the past when they tried to control distributor sales they got taken to court and lost.

As a practical matter this could result in small retailers turning to other 1911 or AR15 makers - of which they're many. Without a viable retail network Colt's sales would likely drop, at a time when more are desperately needed.

Obviously the current management is both desperate and dumb.

Last but not least, given their present financial condition, they might in the end be unable to fill the orders they did get.
 
Sounds like they are trying to bank on their name. It sounds like the mentality is that dealers can't afford NOT to have Colt firearms so Colt can set the terms. The truth as has been previously mentioned is that there are a lot of AR and 1911 makers out there now.
 
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Sounds like they are trying to bank on their name.

That's been the case with Colt for years. I will never accuse Colt of making junk guns. However, they make nothing that you can't get somewhere else with either less cost and comparable quality or same cost and higher quality. For so long the rallying cry was "If it's not Colt, it's a copy". Colt quality dropped, cost rose and the rest of the market picked up the slack. Now you can say if it's not Colt, it's likely an improvement.
 
Hondodawg..... Why do you have have to stock slow-selling 1911s to sell ARs. Why don't you just stock ARs and sell those? If priced right, they will move. Sell an $860 gun for $1200 and it won't move.
 
Hondodawg..... Why do you have have to stock slow-selling 1911s to sell ARs. Why don't you just stock ARs and sell those? If priced right, they will move. Sell an $860 gun for $1200 and it won't move.
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That is what this whole post is about. Colt is trying to, maybe blackmail isn't the word, but strong arm dealers into buying their 1911's so that the dealers can get the ARs. If they don't, Colt won't sell to them at all. This seems like a very short-sighted strategy based on the notion that their AR will always be in such demand that they can set the terms heavily in their favor. However most dealers probably will pass and thus less Colt 6920s will be sold and less profits for Colt. It seems Colt is on a downward spiral, whether it's a death spiral only time will tell.

ETA: Upon further thought, it seems like it might force the price of Colt ARs up as well. The dealers that do take the 1911s might try to make their profits up on the ARs. This will only push people to other brands that offer more bang for the buck. As someone said you can already get an equal rifle for less or a better rifle for the same price.
 
Thanks. I actually don't see where it specifies pistols over rifles, but I'm not in the business either.
 
Colt is requiring dealers to stock at least two firearms from each required category. According to their release to dealers, you must have one on display and one in overstock. This includes several types of AR, 1911, SAA, and bolt action rifle. If you don't purchase the required number of each type of firearm within the specified time period, they will put you on a "do not sell" list at each Colt distributor.
This seems like a poorly thought out Hail Mary pass by Colt to raise cash. Even if every Colt dealer purchased the required package (which they won't) it would just give them a very short term cash infusion. It is just rearranging the deck chairs on the Titanic. Colt is producing numbers of guns that are overpriced compared to the competition, surviving on name alone, while letting other companies make money on products that are in high demand.
Just about every manufacturer has some form of stocking dealer program, to entice shops to stock more of their product. Most will give discounts, or free goods to the stocking shop. The only benefit of this one is permission to sell Colt products. Good luck with that.
 
Eh - Colt is having financial trouble due to slow sales (read: not a lot of people are actually buying their guns).

That translates into 2 facts:

1. Gun dealers are going to be hesitant to buy lots of stock that it may take them a while to move.
2. If they choose to abandon Colt altogether not a whole lot of people are going to be upset given that not many people are buying Colt these days.

Seems like a bad move all-around, but Colt isn't exactly known for their brilliant business decisions.

At this point I don't think there's any saving the company. Every single viable action that might work (primarily designing newer, lower cost products), they can't afford to do. We just have to wait until the company goes under at this point and see who purchases the name. I'm sure there will be "Colt" firearms made in the future - they probably just won't be by the current company.
 
That makes sense. The FFL that I frequent suddenly has an SAA which doesn't really fit his MO.
 
After observing Colt for many decades while working inside the industry, I've come to a conclusion that the management lives in their own little world that is far removed from reality.

They have previously tried what they are proposing now, and it didn't work. In fact it was counterproductive.

But from their perspective this is no reason to not do it again.

The overwhelming number of retailers that currently offer Colt products are not part of a franchise program - they are independent business, and can do whatever they choose too do. If they decide to no longer carry the Colt line, or are forced to do so, they will easily replace it with something else. Colt on the other hand can't sell much without participating retailers. Some will remain of course, but it is doubtful they can sell enough in today's market to sustain the manufacturer.

I think it is is probable the Colt name and trademarks will go on, but I doubt the present company will.
 
News posted on another thread reports that Colt is meeting with it's major investors. If they cannot get an agreement for concessions and additional funding they will fold tonight at 12:00 pm.

They admit that the program under discussion here has failed, as has they're other efforts. If the meeting fails to bring a resolution the only option left is to put the company into bankruptcy. :mad:
 
Old Fuff said:
News posted on another thread reports that Colt is meeting with it's major investors. If they cannot get an agreement for concessions and additional funding they will fold tonight at 12:00 pm.

They admit that the program under discussion here has failed, as has they're other efforts. If the meeting fails to bring a resolution the only option left is to put the company into bankruptcy. :mad:
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The big question is which bankruptcy, 7 or 11? Lots of companies have come out of 11 quite nicely. Chapter 7, not so much. (by definition. See: Radio Shack).
 
This tactic is nothing new from Colt. A friend (now deceased) owned and operated the first indoor shooting range I my town in mid 1980's. He would constantly tell me about the trouble he encountered ordering Colt firearms. At the time Colt had a policy of minimum orders of 5-$7000.00 just to be eligible for specific (read popular models) which more often than not would be back ordered. He never encountered similar problems with S&W, Ruger, or other major manufacturers. Eventually he stopped stocking Colts altogether. I bought one of the last Colts he had in stock , a Trooper.
 
So tell me why I should buy a very expensive gun from a company that hasn't had a totally new gun in 50-60 years. Kind of like trying to sell new '65 Studebakers today for more than you can buy a new Honda for. You may be able to sell to a few diehards but beyond that there is no market.
 
What minimum requirements do other firearm manufacturers have? (I have always wondered about this)

Thanks
.
 
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