The market currently has too much supply and not enough demand. Sure, the number of background checks is up but there are places like Rural King and online gun stores that are selling guns so cheap that small business can't compete. Yes, more guns are being sold. The problem is that is is a small number of FFLs making the majority of sales and the margins are really low. A small gun store can't stay in business with only $5 or $10 profit per gun. Places like Rural King that buy literally semi truck loads of guns can get them cheaper and sell them at lower margins.
The overhead for a small business owner means that unless they are selling large quantities, they have to have more markup on each gun to stay in business. Most small gun stores probably have $3,000 to $5,000 in monthly overhead (this is just a guess based on my own experience) unless they own the building they are located in and don't have any employees. Setting up at a gun show with just 5 tables can cost between $400 to $1,500 depending on table cost, employees, hotel rates, distance traveled, etc. Many of the vendors that set up at shows actually have a job that they work at during the week and don't rely solely on gun shows for income.
Long story short, the firearms market hasn't necessarily crashed, but it sure can seem like it for small FFLs.
So right now it is a buyers market. We lived through the sellers market. If the small FFL's did not account for the change in the market they will likely fail. I agree it is sad but also a true function of a market.
Speaking of markets, I hope the .22 and other ammo hoarders loose their shirt...
Speaking of markets, I hope the .22 and other ammo hoarders loose their shirt...
Generally speaking, "hoarders" will be fine. It's the ones who paid $1,200 for 1,000 rounds of .223 and x39 back in 2012 and 2013 who regretted their purchases a few months later. However, if they paid that much for X amount of ammo, I highly doubt they were hoarding loads of it. Those were likely the people who had zero ammo before the ridiculous price climb and they, more than likely, only bought 1-2K in ammo.
Let's not forget the $100-$120 P-Mags. That was sort of fun and sad to watch.
Bingo!It is definitely a buyers market, and has been since Trump was elected. I fully expect prices to rise as the next election draws closer. I have been telling my customers that now is the time to stock up, don't wait until the panic buying starts. Right now I'm selling 500 rounds of .22 LR Thunderbolt for $15.89 plus tax, but prices are already starting to rise. I just got word today that Remington is raising their price on my most recent order so when the ones on the shelf are gone, the next ones will be more expensive.
When supply runs out, I base my prices on replacement cost. It would be pretty stupid of me to sell merchandise for less than it costs for me to replace it. I don't like watching people spend too much, but it's kind of hard to feel sorry for them when I have been telling them for over a year to stock up while prices are low. We go through this same cycle every 4 years, it's not that difficult to predict...
Seems like everyone you talk to laments the collapse of the firearms market since the election. Dealer after dealer bemoans the slow down. This seemed to be true, especially as everyone was saying so. But I was doing some research for an appraisal I am doing and graphed out NICS checks from 2012 to 2019. For 2019 I calculated the average percentage of annual sales in the first three months from previous years and used that to annualize Q1 2019. The graph is below. Ignore the $, the numbers are the number of checks run.
So yeah, 2016 was a big blip up, but but the overall trend has been a steady uphill run. Thus I have to wonder, are things as bad as everyone seems to think?