Success Stories

Premium Partner Success Story: Yellowstone Gateway Sports: Two Locations, One Successful Operation Yellowstone Gateway Sports in Livingston, Montana

Every successful small distributor, large dealer or retail chain store is run a little differently. Each type requires varying techniques to see overall success. For example, one type may outsource managing the inventory and rely on distribution centers to get product on the shelves, while others may work with vendor representatives to keep their store stocked and ready.

The formula for a successful business isn’t set in stone, and definitely differs depending on a number of aspects. Determining how to capitalize on factors such as population near a store, location of competitors and overall demographics is key to managing a prosperous business.

Ted Kraus opened Yellowstone Gateway Sports in Livingston, Montana in 1994. He and his wife started off with $108,000 in inventory and one location in a small town. After twelve years the Kraus’ have since opened a second store in Bozeman (2002) and have over $2,000,000 in inventory. This success and growth didn’t happen overnight, and it wasn’t by chance, either.

Ted got into the outdoor industry back in the early 1980’s doing wholesale work for distributors. “Packing and pulling orders,” he says. After that he went into sales for 11 years before opening his first store. Maybe it was his experience in all aspects of the business, but Ted’s stores have been very successful. “We built the whole business on relationships,” he said.

With one store in a small town like Livingston (est. population 7,000), and another in a larger city like Bozeman (around 32,000), Kraus manages the two stores differently; with great results. “In a small town [like Livingston] we cater to a different group,” said Kraus. “We are almost a mercantile as we have a small department for everything [clothing, athletics, recreation, etc.] in addition to our fishing, hunting and archery departments.”

In both stores, and especially in Bozeman, Kraus let’s his hunting and shooting products carry the business. “Overall we do almost 92% of our business in guns, ammo and archery. We focus on this because it is what we know.” Kraus attributes a knowledgeable staff as another reason for his success. “All of our employees are ‘outdoorsy.’ They know their stuff, and that is huge,” said Kraus.

Like many other successful Premium Partners, Kraus is involved in the community. When he opened the first store in Livingston, he used hunter safety programs to spark interest in the shooting sports. “When we first started, not too many kids in the area were into hunting or shooting,” Kraus said. “We figured out it wasn’t a lack of interest, but a lack of instructors, that was holding kids back.” Kraus responded by having his employees certified as instructors, and began holding courses. When Kraus began classes, the area offered one hunter safety course per year. Now they are educating over 200 kids a year.

Another way Kraus has kept the community involved, and the traffic in his stores high, is on-site ranges. Both locations have an archery range, and the more modern Bozeman store boasts a 10,000 sq foot air rifle/BB gun range that can have 20 shooting lanes going at one time and is the biggest of its kind in the state. “When we opened the range, we had 32 kids participating [in leagues and events]. Now we have 190,” said Kraus. “We also have Olympic shooters training at our facility and hope to install a running target by the end of 2006.”

Being an independent dealer, Kraus has been able to stay competitive with the big chains, and he says being a Premium Partner is one of the reasons. “The Premium Partner Program gives us some good knowledge, and great insight. The job they do with distribution helps our success,” said Kraus. “Through Premium Partners we can take advantage of some great promotions, and buy at a competitive level.”

One factor that sets Kraus’ Yellowstone Gateway Sports apart from larger retailers, and even other independent dealers is that he does not rely on a computer system for inventory. “I have found we can react quicker. We can react in seconds on pricing if we need to. All it takes is a signature,” he said. “You’ve got to stay on top of the game, know what the public wants. If you do that, you’ll be fine.”

Judging by his success, Kraus has definitely managed to stay “on top of the game”. He says that being present on location, and overseeing day-to-day activities helps him do that. “If you’re an absent owner, you can’t react to things like pricing and other issues that may come up. The most important thing you can do is manage your in-store stock. No matter what the profit is, you can’t be out. Independent dealers can be more successful by carrying a greater breadth rather than depth.”

While there are differences to the way both Yellowstone Gateway Sports locations are run, the “hands-on” approach Kraus uses for both stores seems to be one of the many things he is doing right.