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There is an interesting behavior in business. Secrets. A business entity believes it should be big enough to do everything, and if it’s not, it needs to portray that it is. We believe it stems from a perception that the more control of a product’s cycle from conception through production and consumption that a company has, the more unique the product, and the better the quality. The reality, however, is that nearly all businesses use vendors and suppliers to design and manufacture their products at some level.
The big three automakers are a perfect example of producing products that are the sum of thousands of parts supplied by vendors. The name of the game is managing a sophisticated supply chain. From the seats and stereo down to the tires, automakers don’t make the parts; they manage them. At times, they’ve been accused of poor or adversarial supplier relationships oftentimes due to focusing on driving down costs. The Japanese automakers Honda and Toyota manage the same suppliers and supply chain, but they take a unique approach towards vendor relationships. Their concepts of the supplier relationship and how their companies view them are illustrated in the idea of keiretsu and kaizen. Suppliers are partners. Suppliers are developed and managed to deliver excellent, quality parts.
The custom rifle business faces similar challenges. Companies are assembling components provided by other companies. Sometimes they are white labeled and branded to give the appearance that they are manufactured by someone other than the Original Equipment Manufacturer (OEM). It’s a common practice, but misleading.
In Sports Optics, it’s mostly the same practice. Big brands market products manufactured by OEMs. Most U.S. brands are sourcing from Asia. Japan, China, and the Philippines are the main countries of origin. However, most U.S. brands cultivate the impression that they are the actual manufacturers, and that they manufacture their products in the U.S. Even with a clear designation of country of origin, most consumers rarely understand the product origin.
So why are some of the big optics brands not forthcoming about disclosing where their products are made?
The Low-Quality Perception
The general consumer believes that products made in Asia are of poor quality. We believe that this perception is a direct result of the race to the bottom of the pricing structure that is exacerbated by a two-step distribution model. The retailer wants to sell a product with certain features for a specific price. Lower prices sell better, so the retailer dictates what features are needed and what price they will pay. To make enough profit selling to the retailer, the Optics Brand can only pay so much to the Asian OEM which drives quality and performance down due to the set price. After decades of lower and lower prices, the OEMs have gotten extremely efficient producing lower price point products, but there is still only so much you can do when trying to hit a price point.
One way the OEMs can hit those price points is to leverage common components and economies of scale across multiple models and multiple Optics Brands. This may be another reason Optics Brands prefer the veil of perception. If Brand X, Brand Y, and Brand Z all purchase the same base optical and mechanical package from an OEM, the only differentiation may be the turret and industrial design–or what it looks like. If it’s the same product under the skin and all the consumers know it, how would XYZ differentiate their products in the marketplace?
Besides the turret and the reticle, what is the Optics Brand contributing? What are they bringing to the consumer that is new? Are the minor variations worth the markup? At some point, we have to ask the question: What does a branding company offer?
How about quality? If a branding company is not designing the systems or manufacturing, how do they influence quality? The best have adopted sophisticated quality inspection processes. The worst rely on the fact that the consumer is a terrible judge of quality. If the customer can’t measure or differentiate quality or performance, why should the Optics Brand bother?
Take a Right Turn
If we deviate from the traditional distribution model, we remove the limitations on quality and performance imposed by price targets. Suddenly, the best OEM manufacturers can leverage their expertise and efficiencies to create exceptional products. This is exactly what Revic has accomplished. Revic focuses on developing unique products rather than massive branding campaigns and high volume distribution.
If the product is exceptional and unique, why not tell the story. We’re not afraid to share how we design, build and distribute our products because we have optimized our product cycle to benefit the customer. We are not afraid to shout our story from the rooftops!