Want To Make A Million In The Gun Business? Start With Two Million.

Although it’s less than a month before the replacement of that notorious gun-grabbing President with a guy who really understands the need to carry a gun for self-defense, the real question is whether the next four years will be a milestone or a millstone for the gun industry, since gun sales have traditionally been a function of whether or not you can buy a gun. And if there’s a chance you won’t be able to buy a gun, you run out and grab as many as you can. But if there’s no gun ban on the horizon, oh well, need a new set of tires for the car.

trump5            The problem in trying to figure out whether the gun industry will continue strong under (ugh) Trump or begin to slow down is difficult to figure out because it’s next to impossible to get a real fix on exactly how many guns are actually sold.  Or to put it more exactly, how many new guns are sold.  Because remember, a NICS background check is conducted every time a gun goes across a dealer’s counter, and since most gun shops carry a healthy assortment of used guns, many NICS phone calls just mean that a gun already in the civilian arsenal is changing hands. Ditto for many of the guns which go from an auction website to a dealer’s shop, particularly for interstate sales.  Obviously, the civilian gun arsenal increased enormously under Obama – Smith & Wesson stock didn’t jump from $5 to $30 between 2009 and 2016 just because the company makes some nice-looking guns. On the other hand, that same stock has lost 30% in value since November 8th, which says something about the industry’s future prospects under a President named (ugh) Trump.

But if I had a nickel for every time a stock went up or down because market predictions turned out to be incorrect, I also could buy a new set of tires for my Subaru without selling one of my guns.  Remember when gasoline prices went over $2 a gallon back in 2005 and the experts were all predicting a $10 price by the end of the decade?  We’ll have some rough idea about the health of the gun market when Smith & Wesson releases its 10-Q for the quarter ending September, 2017.  But the number of new guns produced and sold each year is not necessarily an accurate measure of whether a pro-gun President like (ugh) Trump will help or hurt gun sales.

The real problem is trying to figure out the size of the potential market; i.e., how many people out there might be interested in buying a gun. Because when all is said and done, the success of any consumer product is based not so much on its replacement rate (consumers who already own the product buying a new one) but on the number of new consumers who decide that a particular product is something they just must have.

What apparently has happened under Obama is that the replacement rate for guns has soared – the same people who started out as gun owners in 2008 just kept buying more and more guns. These folks didn’t need to be educated on why Obama was a threat; as long-time gun owners they always knew that a gun ban might be in the works. And most gun owners had lived through the terrible Clinton gun and magazine bans enacted in 1994.

As for new consumers entering the gun market, I’m not so sure that the slow but steady decline in the percentage of American households with a legal gun will continue under (ugh) Trump, and I’m going to tell you why. Because what this election showed, if nothing else, is that a lot of people bought Trump’s message that government doesn’t work.  Which is exactly the long-time message used by the gun industry to sell self-defense guns. On the other hand, if Trump (ugh) makes government more efficient, do you really need to protect yourself with a gun?

              Wishing Everyone a Healthy and Happy 2017.

 

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4 thoughts on “Want To Make A Million In The Gun Business? Start With Two Million.

  1. Yes. Indeed. I can respect anyone who can state their case in good, coherent English sentences. I may or may not agree with them, but I have changed my own opinions enough times to realize that I have often ended up dis-agreeing with myself. So I cannot feel any ill will towards them. Re: The future. Suppressors. Nowadays they are expensive and troublsome to acquire. Before very long, they will be cheap and mandatory. Like in the Czech Republic.

  2. Reblogged this on Mister Journalism: "Reading, Sharing, Discussing, Learning" and commented:
    Want To Make A Million In The Gun Business? Start With Two Million.
    by mikethegunguy
    Although it’s less than a month before the replacement of that notorious gun-grabbing President with a guy who really understands the need to carry a gun for self-defense, the real question is whether the next four years will be a milestone or a millstone for the gun industry, since gun sales have traditionally been a function of whether or not you can buy a gun. And if there’s a chance you won’t be able to buy a gun, you run out and grab as many as you can. But if there’s no gun ban on the horizon, oh well, need a new set of tires for the car.

  3. To reply to the question underlying the post, here is what I actually think: Overall gun/ammo sales are going to sharply decline during the Trump administration unless something really unexpected happens. There has been been about 8 years of panic buying and near hoarding. I recall going to my neighborhood gunstore in 2009-ish to get some supplies. I was told that sales of primers for large caliber pistol rounds (for reloading) were limited to 500 a day per customer. At one time, .223/5.56 was hard to get. When the supply opened up again, buying 420 round boxes became common – because that is about all the average person is comfortable carrying out a store at a time without assistance. Stores used to sell standard pistol rounds in 50 round boxes. Now you see stacks of 1000 round boxes in the middle of the floor. None of this would have happened without BHO and now he is fading from the scene. Ammo stays good for decades. And all the “military grade” weapons that have been bought in the millions the last few years… the best, most meaningful definition of military grade is “extremely durable”, that is, you will never need to replace one. In other words, this adds up to just another bubble market.

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