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Sun Feb 9, 2020, 09:48 AM

Background checks set new records and yet the gun industry is suffering.

https://www.thetrace.org/2020/02/gun-wholesalers-are-going-out-of-business-despite-record-sales/

So what's going on? The same thing that happened to the 35mm camera industry in the '80s, self immolation.

35mm camera sales reached their peak in the early '80s, the market was hot and everybody wanted their share. Pricing competition reached the point that cameras were literally being sold at actual dealer cost and store profits maintained with add on sales of accessories. The average entry level camera retailed at $200 but the average sale totaled nearly twice that because of the extra bits that sold for 2-3x cost. For instance a clear glass filter for the lens costing as little as .67 would be marked up to $9.95 (which meant that all that image quality produced by state of the art optics was filtered through a .67 piece of glass, but don't get me started).

It all worked well as long as the sales chain remained intact; manufacturer sells to distributor, distributor to retail outlet and outlet to end user, each taking profit and each creating demand for the product.

Then the manufacturers and distributors began bypassing the retailer through catalog sales, selling at prices even lower than retail cost. Next thing you know the manufacturers did the same thing to the distributors. Cameras, cameras everywhere but dealers and distributors were folding left and right. Without the combined marketing $$ of each level of sales outlet consumers and their consumer $$ were lured to some other shiny object.

This is exactly what is happening to the gun industry except there is now the internet and on line sales. One of the reasons for the popularity of the AR platform was the endless customizing options, but without that sales guy at the counter pushing .67 filters at $10 each the sizzle is gone from the steak.

How ironic that the downfall of the industry, if it continues to follow the 35mm model, will be entirely self inflicted much like the NRA has done to itself.

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Arrow 8 replies Author Time Post
Reply Background checks set new records and yet the gun industry is suffering. (Original post)
flamin lib Feb 9 OP
krispos42 Feb 9 #1
flamin lib Feb 9 #2
krispos42 Feb 9 #3
flamin lib Feb 9 #4
krispos42 Feb 9 #5
flamin lib Feb 9 #6
friendly_iconoclast Feb 9 #7
krispos42 Feb 11 #8

Response to flamin lib (Original post)

Sun Feb 9, 2020, 09:59 AM

1. Two issues off the top of my head

1) Only licenced people may sell firearms to the customer. Ruger can't just sell guns through a catalog or online. Accessories, yes, guns, no.

2) One of the two major political parties weren't running on a platform of bans, confiscation, registration, fines, fees, and general scrutiny of 35mm cameras.

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Response to krispos42 (Reply #1)

Sun Feb 9, 2020, 10:27 AM

2. What does that have to do with retail dealers

And distributors going out of business?

If only "licenced people can sell guns" I'd like to talk to you about ocean front property in Oklahoma. Fronts on two oceans! Just a bit of a walk to the beach . . . 😁

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Response to flamin lib (Reply #2)

Sun Feb 9, 2020, 10:48 AM

3. I said "new" guns

Gun makers don't make used guns. Your topic is the manufacture of new items, not the secondary used market.

Gun makers cannot sell their products directly to the public, so the distributors and dealers cannot be bypassed.

And I went to 2 gun stores yesterday looking for a particular gun. It was busy as hell. At the first one you have to take a number, like in the deli department at the grocery store, to speak with a clerk.

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Response to krispos42 (Reply #3)

Sun Feb 9, 2020, 11:37 AM

4. Then how do you explain the article and its sources?

ETA: All background checks, used, new or pawn count toward estimating sales.


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Response to flamin lib (Reply #4)

Sun Feb 9, 2020, 03:02 PM

5. I don't. I was addressing something else.

It all worked well as long as the sales chain remained intact; manufacturer sells to distributor, distributor to retail outlet and outlet to end user, each taking profit and each creating demand for the product.

Then the manufacturers and distributors began bypassing the retailer through catalog sales, selling at prices even lower than retail cost. Next thing you know the manufacturers did the same thing to the distributors. Cameras, cameras everywhere but dealers and distributors were folding left and right.


That's from your OP.

In the case of new firearms, the sales chain must remain intact because of the requirement that new gun sales go through a licenced dealer. You know, background checks and all that jazz.

That is what I was addressing.

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Response to krispos42 (Reply #5)

Sun Feb 9, 2020, 03:32 PM

6. You seem to miss the point that the chain is NOT remaining intact.

Perhaps the gun shop you visited was busy because some of the competition is no longer open. It doesn't help that the inventory sold at bankruptcy prices further erodes the pricing of the manufacturer's new product. Once the perceived price of a commodity goes down it seldom rebounds, at least not quickly enough to reverse the damage done to existing infrastructure.

The fact that the gun industry must come to terms with is that profit margins are eroding to the point that the sales of guns simply cannot support the cost of the supply chain. It's happening as evidenced by the shrinking dealership base as well as the distribution network.

I really don't understand what point you are trying to make. Is it your position that the article is incorrect and the number of both dealers and distributors is not shrinking or is there some other issue you are taking exception to?

In either case I'm moving on so the floor is yours . . .

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Response to flamin lib (Reply #6)

Sun Feb 9, 2020, 06:17 PM

7. Congratulations- you've discovered that durable goods manufacturers are subject to business cycles

It was inevitable that the rise in new gun sales over the last ten years or so couldn't be sustained- especially since
guns are far easier to maintain in good condition than cars, and don't wear out nearly as fast.

So why buy new, when used guns in good shape have fallen dramatically in price?

Don't worry, business will pick up again if and when your ideological fellow travellers start banging on again about bans
and confiscations...

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Response to flamin lib (Reply #6)

Tue Feb 11, 2020, 06:05 PM

8. *sigh* I'm pointing out that your comparison to the camera supply chain is poor

The supply chain may shrink or grow, but the supply chain cannot be bypassed.

The "Trump Slump" may contract or expand as sales go up or down, but gun makers cannot bypass the chain.

Besides, I'm hoping the "Trump Slump" will be over soon, because it would mean that a Democrat is in office again.

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