Has the gun bubble burst?


Jim Shepherd writes about the decline in gun sales (scroll down the page to see the article)…

Over the past few weeks, we’ve been hearing – quietly- of cutbacks, layoffs and other “right-sizing” going on at companies where extra shifts were the order of the day only a few weeks ago. With ammo supplies building up, components for reloading becoming more readily available, and the economy still wavering, it seemed the firearms industry might be slowing.

Freedom Group Chief Sales Officer Scott Blackwell says the business cycle is significant, but feels a long-term opportunity lies with the new gun owners, not the longtime enthusiasts or sales fluctuations.

Earlier this week a very reliable source told me the name of a major AR-15 manufacturer who will shortly be announcing that they are closing a factory and laying off staff. Not good, but the sales the industry has been seeing could not last forever.

UPDATE: AccurateShooter reports that Marlin (owned by Remington) will shut down their plant in North Haven..

UPDATE: Bushmaster, the “major AR-15 manufacturer” is laying off staff (not closing a factory). I misinterpreted by source. The factory closure was Marlin.

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Steve Johnson

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.


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  • Jeff

    I know this is a politics free gun blog but politics is what drove the guns sale soooo….
    Give our elected representatives some more time.
    When they tackle things like immigration reform, I’m sure another spike in sales will happen.
    America can get 20 million “legal” customers that will probably want to buy guns for personal protection or to send back south.

  • http://www.predatorwild.com Heath

    I think we all knew the bubble would break eventually. But I am sure the President will do something else before his term is up to start another gun buying frenzy.

    There have been a ton of small businesses which have started up to sell parts and accessories for those fun little black rifles. While I hope it doesn’t force them to shut their doors I fear that many will once gun sales return to normal.

  • Matt Groom

    From the News video on AccurateShooter:
    “Micheal Frieda… says it costs too much to be in manufacturing IN CONNECTICUT”.

    “There is no indication that the production of Marlin rifles will be halted — production will likely be shifted to Freedom Group factories in other states — probably in the Southeast.”
    Apparently, they’ll shift production to their new plant in North Carolina, which is a RIGHT TO WORK state.
    http://en.wikipedia.org/wiki/Right-to-work_law

    This is less about the ‘Firearms bubble’, and more about the Wagner Act Unionism that has forced nearly all of the smokestack industries out the Northeast and turned the once prosperous, vibrant, and productive “Manufacturing Belt” in the “Rust Belt”. There was a time when “Made in America” meant made in the Manufacturing Belt, but those days are gone, and those jobs have gone overseas or come south.

    Is it just me, or does it seem exceptionally ironic that this happened mere days after Obamacare was forced into law?

  • Rog

    I won’t consider the bubble “burst” until I can again buy milsurp 7.62×51 NATO for 17 cents a round delivered or less, steel cased .223 for 11 cents a round delivered or less, and 7.62×39 for 8 cents a round delivered or less. Yeah, those are 2002 prices, but guess what, the actual cost to produce and that ammo isn’t that different compared to 2002 right now with component prices having fallen quite a bit since the height of 2007-2008. Fuel/oil prices are still relatively low. Cheap labor is VERY much available all over the planet.

    The only thing keeping ammo from being cheap again are vendors trying to make an extra buck on an overinflated market. That market is rapidly deflating and if we just hold fast and sit on our stockpiles, the ammo vendors will have to suck it up and sell at more sane prices that merely make them a reasonable profit as opposed to the outrageous profits they have been raking in over the past few years.

    I say make them suffer for gouging us and withhold your purchases until prices are once again down to where they should be.

  • Fred Johnson

    A sad day for the community in North Haven.

    As long as Marlin products are still made in the US and not made overseas like many other “US” firearms are now, that will still be a plus.

  • Bryan S

    I think most of the gun bubble came from the expectation of bans coming through, and then miraculously, like after after the 92 ban, their purchases would be worth many times more.

  • SpudGun

    I suppose just like with iPhones and Xbox 360′s, the gun market has reached saturation point with just about everyone owning a piece of hardware. Though gun sales might be slowing, it would be interesting to see sales stats on both ammunition and related market and after market products (lasers, magazines, gun lights, holsters, etc).

    I would imagine that the related markets are still quite buoyant and probably won’t see any downturn for a few years to come.

    Additionally, though sales might be slowing, profits could still be flooding in, after all 3 x ACRs = 30 x Ruger P95s.

  • http://www.spuler.us/gunsandammo/ Aaron Spuler

    I find it really cool that I was quoted in Jim’s article today.

    • http://www.thefirearmblog.com Steve

      Aaron, thats awesome! It is a pity he did not link to your blog.

  • Jaekelopterus

    Where do you think our guns are going right now? We get drugs, Mexico gets guns, everybody wins. Lack of citizenship is little obstacle to obtaining firearms in border states like AZ and TX.

  • El Duderino

    I bought 2 “black rifles” last year owing to the fear of another AWB-type situation. I would have bought a “wondernine” too but I bought a house instead…

  • gmanAZ

    They don’t need to wait and are not waiting if they are in AZ or TX. You are allowed to buy from private parties without keeping records or anything, not to mention all of the guns sold at gun shows. It’s not that hard to get a gun legitimately without showing ID here in AZ. I’ve done it several times. And all you really need is a straw buyer to buy from the gun stores, and then they ship everything down south.

  • Komrad

    @ Jeff

    That’s really political, and just a touch insensitive to a large and mostly destitute population of hard workers.

    The bubble bursting probably has more to do with the economy than anything else. The economy is down and any initial scare Obama’s election brought (even if it’s irrational) gone, people just don’t want to buy guns

  • http://tslrf.blogspot.com/ theotherryan

    I agree more or less with the first comment. During the run up to the election and the opening period of the Obama presidency everybody who wanted or thought they might want a new semi automatic pistol or an AR went out and got one. If almost everyone who even considered wanting one already got it then it figures sales would slow. Of course there are a few people getting old enough to buy one and folks like me who would like 4 more.

  • Lance

    Yet the gun dealers charge us horrible high prices!!! I think we once we should remember whos who once the buble dose pop.

  • Matthew S.

    Personally, I’ve seen more people I know gain a certain curiosity and desire to experience firearms over the last 12-15 months. Many of those people who never had any interest before and echoed fear in regards to the subject matter, are now attaining CCW Permits and decking out AR-15s. But I think the enthusiast migration caught a lot of manufacturers off guard, many of them obviously couldn’t keep up or adapt to the changing industry. I don’t think the industry is dieing or peaked. It’s merely evolving.

  • http://homeplace-artsstuff.blogspot.com Arthur B. Burnett

    Greetings from Texas,
    Speaking only for myself, I buy guns no matter who is in office. My gun buying has slowed down because money is tight!

  • M. Werner

    Although there was a lot of hype from the right about the Obama administration being out to grab everyone’s guns, it’s been pretty clear that there is no political interest in such things at all at present.
    (at least on the national level)
    Most of the political pundits I listen to say that it’s essentially a dead issue.

    What with the SCOTUS apparently set to rule favorably against any sort of gun-banning legislation, that aspect may well be moot.

    I agree that the stinking economy is probably more of a factor at present.

  • Carl

    If the buying frenzy is over and the money has run out, lets hope everybody bought sensible, useful firearms and not just silly crap like revolvers made for shotshells.

    On Obama and guns, isn’t it likely that he’ll go for the ban in his second term? It seems obvious to me that he would ban them if he could, but I agree the courts have been very friendly to the second amendment lately.

  • Jim P

    I was chatting with the owner of my local gun store/range last night. When I asked how he was doing (Been going there 20+ years I’m one of the “regulars”) due to the downturn that I have been reading about and he tells me that his first quarter business is up 50% over last years first quarter.

    Good news for him and good news for me :) Last year he was thinking of closing :(

    NukemJim

  • jody

    you still can’t buy 380 ACP anywhere.

  • John Waters

    I think that it might be time to pick up that m1895 in .45/70

  • El Duderino

    Sorry not much evidence of firearms heading over the border into Mexico. Every article I’ve read and every picture I’ve seen is international-market military hardware — M16A1s, AKs, M2HBs — all full-auto and not bought over the counter. With military small arms all over the place, who would care if cartels bought a few pistols or shotguns up here? The USA is NOT arming Mexican criminals with anything significant.

    Wait what were we talking about again? Oh yeah…

  • Burst

    El Duderino is right, except for a minor point- the M-16s, UZIs, grenades and whatever else are of US origin- in the form of military aid from the cold war/ drug war.

    So, no, most of the firepower wasn’t purchased at a gun show, it was manufactured with taxpayer dollars and given to future narcos for free.

  • Cymond

    Arthur B. Burnett: Amen! My purchasing is slow due to financial concerns and an attempt to get married. Then I have to start working on a downpayment for a home. However, my wishlist would probably be a couple hundred firearms if I ever write it down. My ‘high priority’ list is only about a dozen. I did cough up the cash for a wondernine last summer. I hope to buy a CCW piece and a decent rifle whenever finances allow.

  • Xstang

    So, is Obama actually going to ban heartbeat-scanning devices? Because if he is, I really, really want one for my ACR….

  • http://www.predatorwild.com Heath

    Don’t you just love how the corrupt media presents the idea that the US is supplying all the guns the Mexican drug mobs are using and everyone accepts their garbage as the gospel truth? It’s been as long time since the media was objective in any thing they’ve reported.

    @Carl – Taurus is making a lot of money selling “silly crap like revolvers made for shot shells”. Perhaps it’s not them who is silly.

  • http://trilobe3 jaekelopterus

    To El Duderino:

    ATF highballs the figure at 90%, Fox News lowballs the figure at 17% , the real figure is surely somewhere in between (although both sources admit that 68% of the weapons were never submitted for tracing, making the point rather moot.) Even 17% of the weapons captured in all of Mexico is a massive number, though.

  • Joe Hooker

    I went down to WalMart today to buy some ammo. Shelves still empty and the clerk told me that the price of .22LR has gone up 25% as well as several other calibers. If this continues we may not be able to afford to shoot .22s!

  • Michael

    Certainly I’m suddenly able to find lots more guns in the models I wanted than I was just a year ago. Ammo is suddenly available too – though at the same ridiculously inflated prices.

    Ultra compact pistols continue to be extremely elusive here in New Mexico though.

  • http://www.thefirearmblog.com Steve
  • Michael

    Oh, and for the record Robert Morrison is full of it and has to know it.

    Rare is the corporate spokesperson who would to miss the opportunity to claim any/all recent success is due entirely to their superiority as a company rather than temporary outside factors.

    For the record though – I don’t think Obama will ever push, as President, for further gun control. It’s Pelosi we need to watch out for, she’ll leap at absolutely any opportunity to restrict guns further.

  • http://www.nitroexpress.com Mehul Kamdar

    I have a slightly different opinion than some others on the reason for the spike in firearm sales – a bad economy means that guns will sell because you can use a less than $ 1 round of ammunition to bag a doe / buck and get yourself a few hundred dolalrs of meat. It is value for money. Similarly, you can use shotshells and get some decent waterfowl or pigeons. Or use a rimfire and bag some rabbits . . .

    Yes, some bought Black rifles and large cap autopistols because they were worried that they would be banned. But many mroe simply decided that guns and ammunition were a decent investment with which to put food in the freezer. And, if you check the price of organic food – which is what game meat is – the VFM thing comes across even better!

  • jody

    i already cannot afford to shoot any handguns regularly other than 9×19. 50 rounds a month is all i can afford for the other calibers.

    in 2010, even the price of handgun ammunition is getting prohibitive. i see no recovery at all. i mean, the ammunition is there, if you want to pay WAY too much for it.

    these could easily be the new, permanent prices for all ammunition, in which case, we can’t shoot very much anymore.

  • Don

    Honestly I think it’s time to save a little cash for when the the “gently used” and “unused used” firearm markets to ramp up again (and they will). People who bought on impulse (not terminal gun nuts like me and most of the people here) are going to want to turn some of their impulse buys back into cash.

    The US gun market is predictable as hell. Economic recession, republican/democrat change-over, gun bubble, gun bust, pieces show up on the used market. Same thing happened with the last recession. Got a lot of good deals out of that one too.

    -D

  • http://homeplace-artsstuff.blogspot.com Arthur B. Burnett

    Greetings from Texas,

    i already cannot afford to shoot any handguns regularly other than 9×19. 50 rounds a month is all i can afford for the other calibers.

    Those of us with gray hair have lived this before. It doesn’t seem possible that it was twenty years ago I had a family with three shooters competing in Cowboy Action Shooting. At the best of times .45 Colt and .44 Special aren’t cheap. Add to that my love of old guns in oddball caliburs (A Webley MkVI in .455 Webley) and I could have burned more than my take home pay in store bought ammo.
    What saved us was a single stage reloading press. I had a friend that cast bullets for me. At first I was scared to death I would screw up reloading, but I learned.
    A loading system doesn’t have to take up a lot of space. Even a Lee Loader will keep you rolling.
    The question I had to ask my self was “How bad do I want to shoot?”

  • Carl

    Just shoot 22lr if you have a tight budget. Problem solved!

    Heath, I never said *selling* them was silly. :-)

  • LouisCQ

    My Uncle, who has worked for a major AR manufacturer for the last 18 years was laid off early last week. So there cold be some things going on…..

  • Don

    Speaking of money saving, RELOAD.

    I reload almost everything I shoot. It saves tons of money and isn’t all that difficult. You really don’t need to spend the money on a fancy press to feed a pretty steady habit. I have an RCBS single stage press from the 70s and will do about 300-500 rounds in a sitting, which translates into about a movie or two worth of my time.

    My “target” gun which I shoot every week is my 629 and if you can find a good source of lead stick to 200 gr bullet weights and keep them cruising at around 900 fps you can’t do better at 25 and 50 yards. They’re equivalent to a modest .44 special loading.

    My cost breakdown for the .44 is 0.08 per bullet, 0.03 per primer, 0.04 per powder charge sitting me at 0.15 per round and 7.50 per box of 50. I shoot about a box per week so I’m pretty low cost. My .45ACP is about the same cost per box, and the .38 specials cost about 4.75 per box to reload. I don’t do 9mm but my brother does and he sits at about 4.50 or 4.75 per box for that as well.

    I since I use a light charge the brass lasts almost forever so I consider that long since depreciated to zero. Also, I don’t clean the brass, that saves a lot of time too. I shoot some dirty lookin’ ammo out of some impeccably clean firearms.

    -D

  • Wes N.

    To Lance and whomever has an issue with gun prices, some pertinent info from a licensed dealer, me. Don’t blame the dealers, especially us small ones. Our profit margins are quite small enough especially with new weapons. My overhead is quite small by having the location already and not stocking merchandise or it wouldn’t pay for me to be in business. If I didn’t have my day job still, I’d starve. True that there are some larger dealers that can buy factory direct because of having enough volume and inventory capitol to be able to circumvent the distributors. Still, they have a much bigger overhead to deal with as a result and if you know anything about owning a business, you have to deal with overhead and expenses before you can tackle profits at all. If anyone has a beef with gun prices, look at the manufacturers and distributors, and the manufacturers have some issues that we as dealers would love to settle ourselves. They definately have something going where they ship product readily to some distributors and none to others. This I know for fact as I’ve looked into the topic personally. If any one entity is really responsible for high firearm prices, I’d be tending to look closley with the manufacturers.