View Full Version : State of the Firearms Economy
Gutshot John
09-20-08, 18:22
We all know the roller coaster that the economy is undergoing right now. I don't think it's an exaggeration to say that there are profound problems with the overall economy but I don't want to get into left v. right discussions of how to fix it. My concern is in regards to the firearms economy.
With fewer amounts of disposable dollars for shooters, are people cutting back on what they're spending money in regards to firearms?
Are the days of non-exotic collecting gone for good?
The alternative response is stocking up in case of economic trouble ahead, but I don't know if that's an actual reaction. Do people see katrina like problems becoming more and more widespread?
There seems to be large supply of firearms out there relative to demand and with manufacturers coming out with new ones, is that sustainable in the long run?
Are prices going to start falling as the market becomes more and more saturated with different firearms related products?
Which firearms related market seems to be growing at the highest rate? Firearms manufacture? Weapon Accessories (sights)? Tactical Gear? Training? Other?
I'm wondering what the Industry Pros, Dealers have to say.
I was at my dealer yesterday talking. He said they weren't doing much at all in the hunting section, which is unusual for this time of year. But his section (tactical) was booming. I saw several people while I was there buying in preparation for worst case scenarios. Topics of the financial crisis and "peak oil" were discussed. My dealer said he is hearing that a lot more lately. These aren't your stereotypical "conspiracy nuts" but normal people really starting to worry. The people I saw weren't buying cheap Mosins either. In less than an hour I saw about $15K of product get purchased.
Isn't it fun to imagine your favourite TEOTWAWKI fantasy.
The economy is fine, the finance markets are just taking a correction, the streets won't run red and we will still have to pay taxes next year.
That being said any excuse I can make for buying guns and ammo... I am all over it.
We all know the roller coaster that the economy is undergoing right now. I don't think it's an exaggeration to say that there are profound problems with the overall economy but I don't want to get into left v. right discussions of how to fix it. My concern is in regards to the firearms economy.
With fewer amounts of disposable dollars for shooters, are people cutting back on what they're spending money in regards to firearms?. This is 50/50. I know personally, the people that surround me are finding the money for firearms. However, the obvious "pulling in the horns" abounds as well.
Are the days of non-exotic collecting gone for good?. Tough to say. I'll let others w/ more information answer this.
The alternative response is stocking up in case of economic trouble ahead, but I don't know if that's an actual reaction. Do people see katrina like problems becoming more and more widespread? While katrina might have been a unique event in some ways, like scenarios have been happening since time began. What katrina DID do however is make the average person more aware what those situations actually entail. I know I personally evaluated my preparedness level afterward.
There seems to be large supply of firearms out there relative to demand and with manufacturers coming out with new ones, is that sustainable in the long run? As long as supply and demand stay in check, yes. I think the firearm demand will continue to grow in light of obvious reasons such as crime due to tough economy, disaster scenarios, election, etc. These things are all happening RIGHT now. Creates a perfect scenario for firearm dealers/manufactures etc. Like the home market.. They were loaning money to EVERYONE builders just needed to put walls and door up and they had a buyer. Look what eventually happened though. Not foreseeing this in the firearms market, as I feel the growth is in rightful anticipation of a continuing demand.
Are prices going to start falling as the market becomes more and more saturated with different firearms related products? Inevitably yes. Unless the election goes the wrong way. However, the saturation point of firearms related products is yet to be determined. It could still be a long way off.
Which firearms related market seems to be growing at the highest rate? Firearms manufacture? Weapon Accessories (sights)? Tactical Gear? Training? Other?
Again bowing out to someone who will know more.
I'm wondering what the Industry Pros, Dealers have to say.
I am neither of these but I do know a little about economics and market trends in general. Interested to hear others fill in the gaps.
Gutshot John
09-20-08, 22:39
I wasn't really talking about TEOTWAWKI scenarios. It was actually what I was hoping to avoid. My question presumes an existing market.
For example, if you were going to start a business...would you chose to go into the firearms business? Is what's going on in the US economy in general reflected in the firearms economy in particular? Are firearms related businesses tooling up? or winding down?
My bet is that the firearms industry is having as many problems, if not more than everyone else. In spite of Katrina, or economic uncertainty.
At the shop that I do all my business with here in south central Georgia...sales are wide open, however, it's mostly handguns (Glocks, M&P's, XD's), small handguns (Ruger, Kel-Tec), and AR's and AK's that are selling.
Not much happening with the 'sporting arms' right now.
22LR rifles and pistols are doing good also.
It's critical to remember that the M4C membership represents a very small part of the market at one end of the proverbial bell curve. For most gun buyers, purchasing a firearm is a one-time (or otherwise rare) event. Small changes in income don't play a role in buying except perhaps as it impacts price point choice. Buying a gun is sort of like buying a car ... if you need one, you get one, you just might not get as nice of one as you'd like.
The firearms market is affected by so many unique factors separate from general economic health that it's really impossible to find an overall connection.
Part of the reason is that when economic uncertainty looms large, many people see that as a good time to go buy a gun. Political uncertainty? Buy guns. Etc.
Certain markets are obviously shrinking. Hunting is down overall and last year was particularly bad for some of the gun companies in that sector. While in theory you'd see a spike when economic situations get really poor, this doesn't tend to be true across the majority of the population (urban and sub-urban). People who don't know how to hunt and have never hunted don't simply buy a Rem700 and a tree stand when things get bad.
The AR/accessories folks are booming. For the past few years this was powered by the overwhelming pro-military sentiment and a by many to have guns just like the cool assault rifles seen on TV night after night. Sites like AR15 and M4C create spiraling interest. However, the AR market is tiny compared to hunting guns, etc. And the AR/accessory market, I would guess, will take a hit with failing economics because so many people buy them as wants instead of needs.
Opposing that force, however, is the political situation. If the industry learned one thing from 1994, it's that gun control sells guns. Before a law/ban goes into effect there is a massive rush on product. Then, when the law/ban has gone into effect, there is a push for new compliant products. Then, if the law/ban is repealed, there is a celebratory rush for previously disallowed items. As bad as Obama might be, if someone like Schumer were on the Dem ticket stores wouldn't be able to keep ARs and high cap mags in stock.
The same is true to an extent with handguns. Add in increasing CCW laws (and public awareness & acceptance of those laws) and you already have a good reason for people to be buying handguns even when money is tight. With economic trouble comes an increase in crime, and increases in crime motivate people to carry. Increases in crime also motivate politicians to pass more anti-handgun laws; see above for the effect.
Finally, remember that a major purchaser of firearms, especially when it comes to AR and handgun type weapons, is the government. Local, state, and federal agencies are growing rapidly and that means more guns needed. Demand for newer & better guns never stops.
Now, if we hit a major (true) depression I'm sure things will change. After all, if you literally don't have the money for a gun, you're SOL. But given that guns tend to be relatively inexpensive and last a lifetime, most people can afford to buy the one they need when they need it.
I wasn't really talking about TEOTWAWKI scenarios. It was actually what I was hoping to avoid. My question presumes an existing market.
My post wasn't to highlight TEOTWAWKI scenarios. It was just to highlight what some normal people are doing and what is selling some items right now.
As for starting new companies... I don't see a big problem. There is a reason that Rock River is on an 8 month wait. Your best companies innovate. Look at Magpul and Larue. Great products. NEW products. Not just rehashing other's designs. Those types of companies are the ones growing this industry.
RogerinTPA
09-20-08, 23:35
We all know the roller coaster that the economy is undergoing right now. I don't think it's an exaggeration to say that there are profound problems with the overall economy but I don't want to get into left v. right discussions of how to fix it. My concern is in regards to the firearms economy.
[QUOTE]
With fewer amounts of disposable dollars for shooters, are people cutting back on what they're spending money in regards to firearms?
That would depend on your individual goals, job, & disposable income. Except for ToddG's S&W M&P9, I'm done.
Are the days of non-exotic collecting gone for good?
Depends on how large a collection you have in mind.
The alternative response is stocking up in case of economic trouble ahead, but I don't know if that's an actual reaction. Do people see katrina like problems becoming more and more widespread?
There is no alternative to stocking up on bulk ammo or rolling your own, except to not buy at all. I bought cheap and stacked deep for the last couple of years for my primary weapons. If you live in the southeast US, you should be prepared better than the typical American, but as you can see, there are still legions of folks that still do not prepare for self sufficiency and hope for government/divine intervention to save them.
There seems to be large supply of firearms out there relative to demand and with manufacturers coming out with new ones, is that sustainable in the long run?
Nothing is sustainable for the long run. Another AWB if the Dems get in will cure that. Look at the SUV's and Large pick ups after gas went up. The dealers can't give them away. I can buy a brand new high end quad cab for 17k that would normally go for high 40's or low 50's.
Are prices going to start falling as the market becomes more and more saturated with different firearms related products?
I doubt it. If anything, prices will flat line. If another AWB goes into effect, those on the list will double overnight.
[[QUOTE]*]Which firearms related market seems to be growing at the highest rate? Firearms manufacture? Weapon Accessories (sights)? Tactical Gear? Training? Other?[QUOTE]
I see on various gun ranges an increase in AR's. I get inquiries all the time on mine. Lot's of vet's returning home and getting AR's. Followed closely by the AK. I think the up coming elections is lighting a fire under the public at large. Mine priority is for spare parts, mags and of course, ammo.
thopkins22
09-20-08, 23:56
The economy is fine, the finance markets are just taking a correction, the streets won't run red and we will still have to pay taxes next year.
:rolleyes:
The economy is so incredibly NOT FINE. Not saying it'll be over next month or the one after that, but we're definitely on the long slope down towards the second rate nations.
We're quite literally taking two steps downhill for every step up. Unless your econ teacher was Karl Marx what's going on now should be worrying you greatly.
Socialism for the rich is still socialism...only on such a massive scale, and setting such stupendous precedent, that it will hit us that much harder when it does.
What's the saying? A wheelbarrow full of cash for a loaf of bread? We're not there yet, but we're also not giving foreign investors(who we're unfortunately so reliant on), many reasons to stay. And when they leave, due to what WILL be a depreciated currency, we're up that proverbial creek.
Never mind the entitlements which will hit us hard down the line.
BTW....You're very right about one thing, we will have to pay taxes next year.
i heard a gunstore commercial on the radio the other day. havent heard those in years. it would appear like gunstores have money for commercial spots on radio they either didnt have before or didnt think people would care to hear.
We all know the roller coaster that the economy is undergoing right now. I don't think it's an exaggeration to say that there are profound problems with the overall economy but I don't want to get into left v. right discussions of how to fix it. My concern is in regards to the firearms economy.
With fewer amounts of disposable dollars for shooters, are people cutting back on what they're spending money in regards to firearms?
Are the days of non-exotic collecting gone for good?
The alternative response is stocking up in case of economic trouble ahead, but I don't know if that's an actual reaction. Do people see katrina like problems becoming more and more widespread?
There seems to be large supply of firearms out there relative to demand and with manufacturers coming out with new ones, is that sustainable in the long run?
Are prices going to start falling as the market becomes more and more saturated with different firearms related products?
Which firearms related market seems to be growing at the highest rate? Firearms manufacture? Weapon Accessories (sights)? Tactical Gear? Training? Other?
I'm wondering what the Industry Pros, Dealers have to say.
1. There was a news paper from Knoxville a few months back that documented a big increase in CCW permit applications. It came after a terrible rape/murder/mutilation of a young couple here but it seems to have sustained it's demand. CCW classes are always full here. It could also be related to an unstable economy.
2. I don't know on this one, my collecting has stopped. Although I've aquired several firearms in the past 2-3 years they have all served a purpose other than collecting. I do have two more purchases planned but it will takes longer this time. No more M1's or 03's to hang on the wall:(
3. I hear things like this in local shops, people have a greater sense of needing to be prepared. I think most of it in this area is economic/crime related rather than natural disaster related but you do hear a little of it.
4. I don't know one this one, I have alway purchased quality in firearms. I may not be able to buy a BMW but I will buy HK's, Sig's, LMT's etc. A friend of mine recently shot one of my M4's and now want to get one. He has asked me a couple of times about DPMS, I think I finally presuaded him to go quality. The point is most people don't know what makes a quality firearm a quality firearms therefore the door is wide open to makers of less than quality firearms.
5. Personally the only prices I see dropping would be ammo prices if the troops ever get out of Iraq, this is just my opinion and it may be wrong.
6. As mentioned, in this (Knox) area, the defensive market has seen the most growth. To included AR's and semi-auto pistols and CCW permits.
I am not a pro nor a dealer nor do I pretend to be one:D Just a little peek into my local market.
So here is the scoop, I lurk here often but don't post hardly at all.
I am an accredited gunsmith. I graduated form a long standing gunsmithing school 3 years ago (but have been heavily associated with guns my entire life). I have worked on "the other side" of the gun counter for a while and have also worked in the ammunition industry for a small stretch.
Just this last April I was at a large job fair and industry conference in Iowa. Browells hosted the job fair. At this gathering there were allot of industry names and representatives. The basic consensus was that as a whole the industry was growing, not without pains at times but growing none the less. The general observation was that when $ gets tight at first people actually do slim their budget down and actually given the choice make room in the budget FOR a defense related firearm.
With ammunition getting progressively more expensive many people are shooting less in general, or shooting less EXPENSIVE (centerfire) ammo in general. Rimfires are doing quite well across the board.
When $ gets tighter still, firearm purchases as a whole start to drop in a moderate to steep way, BUT - those not buying new/used firearms are more prone to fix/repair/upgrade/accessorize, etc, etc - what they already own. I talked to a group of big name custom pistol-smiths and they ALL said that their business was through the roof. With CCW as it stands now (and growing) there are allot of folks that are willing to justify spending the big $ to have a solid reliable tailor fit handgun for self defense.
I keep in touch with a few dealers back east and they all say the same thing. Black guns, pistols/revolvers are the hot tickets. Even with hunting season budding as we speak "black guns" are out selling "sporting guns" 5-1. It has been this way for the last 3 years and doesn't seem to be slowing down in the least. Here at home in the Midwest even black guns and low to moderately priced handguns are outselling hunting fodder.
Recent politics,and internal turmoil is a driving force behind allot of these type of sales, but also the younger generation has seen these popular arms in movies, brain rotting video games and glorified in other types of media. Some new "converts" are just the younger crowd coming into their own and buying what they are interested in/ have been most predominantly exposed to - (which for the most part is NOT anything traditional hunting related).. On another note, many in the industry remember what happened with Clinton in office. That Bag of hot air "sold" more black guns for the gun industry than any other person/event to date..
Also one thing that has taken off in the last few years is NFA items. There has been a big upswing in the popularity of SBR's, AOW's, SBS's, and especially suppressors. Many people look at the $200 tax stamp as pretty insubstantial compared to the overall cost/benefit of the item that they are looking to purchase. I mean really, building a nice forgery of a Colt commando with a moderator is allot of $ what is another $200 in the grand scheme of things ? That and when properly informed of their rights, it seems that some folks want to exercise them. Once some people are made aware that on the federal level if they can own a firearm legally they can also own a NFA weapon (after the appropriate paperwork, and if their state allows) they want to join the party too!
Oh, and as for collecting that game seems to ebb and flow on its own set of whims. There are a few nuts out there that like to jack the price up on things and some equally out there nut seems to always buy it. Then (as much as we hate them) a "precedent" is set and the price for similar items starts to creep towards the moon. I know that it is a free country and all (for the most part and the time being) but some people pay ridiculous $ for things sometimes!
It's critical to remember that the M4C membership represents a very small part of the market at one end of the proverbial bell curve. For most gun buyers, purchasing a firearm is a one-time (or otherwise rare) event. Small changes in income don't play a role in buying except perhaps as it impacts price point choice. Buying a gun is sort of like buying a car ... if you need one, you get one, you just might not get as nice of one as you'd like.
The firearms market is affected by so many unique factors separate from general economic health that it's really impossible to find an overall connection.
Part of the reason is that when economic uncertainty looms large, many people see that as a good time to go buy a gun. Political uncertainty? Buy guns. Etc.
Certain markets are obviously shrinking. Hunting is down overall and last year was particularly bad for some of the gun companies in that sector. While in theory you'd see a spike when economic situations get really poor, this doesn't tend to be true across the majority of the population (urban and sub-urban). People who don't know how to hunt and have never hunted don't simply buy a Rem700 and a tree stand when things get bad.
The AR/accessories folks are booming. For the past few years this was powered by the overwhelming pro-military sentiment and a by many to have guns just like the cool assault rifles seen on TV night after night. Sites like AR15 and M4C create spiraling interest. However, the AR market is tiny compared to hunting guns, etc. And the AR/accessory market, I would guess, will take a hit with failing economics because so many people buy them as wants instead of needs.
Opposing that force, however, is the political situation. If the industry learned one thing from 1994, it's that gun control sells guns. Before a law/ban goes into effect there is a massive rush on product. Then, when the law/ban has gone into effect, there is a push for new compliant products. Then, if the law/ban is repealed, there is a celebratory rush for previously disallowed items. As bad as Obama might be, if someone like Schumer were on the Dem ticket stores wouldn't be able to keep ARs and high cap mags in stock.
The same is true to an extent with handguns. Add in increasing CCW laws (and public awareness & acceptance of those laws) and you already have a good reason for people to be buying handguns even when money is tight. With economic trouble comes an increase in crime, and increases in crime motivate people to carry. Increases in crime also motivate politicians to pass more anti-handgun laws; see above for the effect.
Finally, remember that a major purchaser of firearms, especially when it comes to AR and handgun type weapons, is the government. Local, state, and federal agencies are growing rapidly and that means more guns needed. Demand for newer & better guns never stops.
Now, if we hit a major (true) depression I'm sure things will change. After all, if you literally don't have the money for a gun, you're SOL. But given that guns tend to be relatively inexpensive and last a lifetime, most people can afford to buy the one they need when they need it.
Simply outstanding.
I have notice that the newspaper classified firearms section has tripled this past week or so. Most of it hunting rifles and shotguns. There was one for a Mini-14 stainless ranch rifle with a Simmons 3X9 scope for $185. That add ran for a week.
Gutshot John
09-21-08, 18:05
Wow that was some of the most thoughtful commentary I've seen on any thread. Thanks to everyone who offered their insights. I need a little time to respond to each of these more intelligently but all have prompted more questions on my part.
I was particularly appreciative of Todd's response, as anyone here knows we've had our difference about certain things, but I was hoping he would take the time to respond and offer significant insight. I was not disappointed.
For the sake of the conversation let's avoid the hunting aspects of the firearms industry as it's not as relevant to our shooting interests.
Todd, given you see an increase in the AR market share, I'd be curious what your experience has been in regards to handguns. Are handgun accessories/training seeing an uptick as well?
As for everyone, are you people, generally speaking, competing more or less than you used to? Matches, classes etc?
Part of the reason is that when economic uncertainty looms large, many people see that as a good time to go buy a gun. Political uncertainty? Buy guns. Etc
Our good friend Barrack Huessein Obama explained it best - we're bitter and cling to our guns and religion. :)
Todd, given you see an increase in the AR market share, I'd be curious what your experience has been in regards to handguns. Are handgun accessories/training seeing an uptick as well?
I don't personally see as big an increase in pistol stuff as we do with the carbine market. The AR is the "in" thing right now. At SHOT this year it seemed as if every third booth was a new company making rails, mounts, stocks, slings ...
As for everyone, are you people, generally speaking, competing more or less than you used to? Matches, classes etc?
I'm competing much less. I've noticed a lot of people around me doing the same. One thing I've noticed is that it also has sort of a domino/snowball effect. If one guy isn't going to a match, and he lets his buddies know, a few of those may not go either, and they let people know, etc.
I think it has to do with the increase in the price of ammo and gas (because of the travel often involved when shooting). Plus, the increase in price of food and everything else cuts into the shooting budget. I think a lot of people are in the same boat. It's kind of depressing.
Joe Mamma
30 cal slut
09-22-08, 07:34
The economy is fine...
i very strongly disagree!
the more i think about it, the more we are steadily edging towards financial SHTF.
Gutshot John
09-22-08, 08:07
I don't personally see as big an increase in pistol stuff as we do with the carbine market. The AR is the "in" thing right now. At SHOT this year it seemed as if every third booth was a new company making rails, mounts, stocks, slings ...
I didn't think it was possible to find direct correlations, but was curious if certain trends could be identified given the present clime.
How long do you figure before the AR similarly achieves saturation of the handgun market?
Just to be specific about handgun, what do you see happening with after-market sights? It would seem that those inclined to add after-market sights, have done so already. With less money to spend, concentrate on training? or would demand respond favorably to a significantly better product?
Thanks again to everyone who has responded.
I think the AR is so "new" compared to handguns when it comes to Joe Gunowner, saturation won't happen any time soon. More 3-gun and 2-gun competitions are coming into existence, providing another different outlet for both gun and accessory sales. Add in the same political and economic factors discussed earlier and it's even more likely people will be buying new ARs for a while.
The same is true with both AR and pistol accessories. Most of the guys on M4C have their ARs completely tricked out. But then the "tier two buyers" see us at the range and want to play ... so they either pony up for Magpul/VLTOR/ADM stuff or they buy lower grade components to get the same look. Then they tell two friends, and so on and so on.
Handgun sights: I doubt this market really fluctuates too much. Very few people outside of competition would ever bother to change the sights on their guns. The only big exception is the online community (gun forum) people. We get exposed to lots of different options, hear competing ideas about those options, etc. Places like GlockTalk and M4C and everything in between all have one thing in common, they tend to attract people with a focus on gear and modifications. The real money in aftermarket sights is getting a deal with a manufacturer. For example, Warren Tactical was standard equipment on the SIG P220ST Langdon and is currently being used on the M&P9 JG.
Competition: I do it much less now. I'd never discourage anyone else from getting involved, but at a certain point the thing that separates folks at the top becomes more about game skill and strategy than practical shooting. I've got absolutely nothing against the folks who put in the effort, but my time and interest simply doesn't extend to working on footwork & transitions, or figuring out a stage like a puzzle. In IPSC/USPSA, for the past few years they even use see-through walls so you can find your target and begin your set-up before you even have a clear shot at it. :rolleyes:
The danger, of course, is that it's easy for anyone to feel like he's at that point. "Oh, I'm as good as I can be without compromising my warrior chest-thumpery." Just like you see Marskmen/C-class shooters spending tons of money on their gear hoping it will make them shoot better. :p
As for everyone, are you people, generally speaking, competing more or less than you used to? Matches, classes etc?
My personal changes have been to switch to 9mm exclusively for pistols. My 1911s, M+P40 and revolvers all sit in the safe getting dusty and I use my G19 for EDC and matches.
I have stopped going to Regional and State matches and just shoot the local club matches. I ride the motorcycle to save on gas so the 120 mile round trip costs me about $10 in gas and $10 in ammo.
I have been a cheap bastard for so long that these weren't big changes to make. Reloading ammo is the biggest money saving method that allows me to keep competing.
Gringop
While I believe video games and TV may play some role in the popularity of the AR platform, I would suggest that we are seeing the highest number of military veterans in this nation since at least Vietnam, if not WWII. These guys know the value of that platform as a utility tool, particularly in an urban environment.
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