Condition of Gun Sales Chain: from Manufacturer to End Customer?

[Kynoch]

I've been thinking a lot about the condition of the gun sales chain where I live. Unless I snag something out of the consignment rack or the used counter at a LGS, I now buy all my guns (both new and used) on-line. One in a great while I might be tempted buy something at Big 5 or Dick's (sporting goods chains) but that's quite rare and only for long guns.

My local FFL deals in very expensive used guns only and charges me a flat $50.00 for a transaction -- the cheapest around. If I were to order these guns from other local shops (few seem to hold much inventory these days) they would typically cost 25-35% more plus tax. I would be willing to pray a premium but not that much more.

I think if we could order guns on-line without the services of an FFL, like many things, most LGSs would already be things of the past. But that's not the case and most seem to really struggle to hang-on. This problem is further exacerbated because typical gunsellers of the past like local hardware stores which had other lines to adsorb overhead are also a dying breed -- and those that are still open rarely carry guns anymore.

I wonder if Remington, Ruger, S&W, et. al. ever worry about the shape of the sales chain when it comes to selling their guns? In years past it was often common for someone to be a THE local dealer for a given product line and the manufacturers/distributors protected their dealers. There was also fair-trade pricing laws. I'm not suggesting that either would work today (or that they would be a good thing) but at $1.50-3.00/square foot/month for rent here locally I really do wonder how an LGS is supposed to make it? They certainly aren't going to make it by doing twenty dollar transfers.

Is it ultimately smart for manufacturers to support drop-shippers like Bud's and gorillas like Wal*Mart at the expense of the LGSs? I'm not voicing an opinion; I'm asking a question...

 

[mnrivrat]

Marketing has indeed changed significantly in many area's including firearms.

Without writing a novel here it does mean that if a local small to mid size store is going to make it in this field they have to be smart about it. There are getting to be less and less advantages to a brick and morter gun shop.

You have to have interenet sales as part of your business, and you have to do transfers as well. Inventory is problematic in that the big boys get the products first. Fact of life in this day and age.

A gun company introduces a new product - people want the product - small stores have little influence in getting the product because they can not buy in larger quantity. You can't sell what you can't get . A problem you have to0 find a way to overcome.

Where the smaller stores can take advantage of their position is in the used and trade in market. Also in the repair/gunsmithing area. Just about all else is a tuff market competing with the internet, and the big guys.

Small town or rural shops generaly do not have the volume needed to pay the overhead . Our local store is closing next month.

 

[Kynoch]

Marketing has indeed changed significantly in many area's including firearms.

Without writing a novel here it does mean that if a local small to mid size store is going to make it in this field they have to be smart about it. There are getting to be less and less advantages to a brick and morter gun shop.

You have to have interenet sales as part of your business, and you have to do transfers as well. Inventory is problematic in that the big boys get the products first. Fact of life in this day and age.

A gun company introduces a new product - people want the product - small stores have little influence in getting the product because they can not buy in larger quantity. You can't sell what you can't get . A problem you have to0 find a way to overcome.

Where the smaller stores can take advantage of their position is in the used and trade in market. Also in the repair/gunsmithing area. Just about all else is a tuff market competing with the internet, and the big guys.

Small town or rural shops generaly do not have the volume needed to pay the overhead . Our local store is closing next month.

Yet some form of local presence is necessary. If all the LGSs fail, they take the Bud's with them and that leaves WalMart? Should a place like Mail Boxes Etc. have an FFL? It would make sense for a place like Mail Boxes Etc. to receive guns from Bud's. It makes little sense for a LGS to do so.

The supply is a fairly new issue. In the olden days when I was a kitchen table FFL, I could easily get anything.

You're right about the used and trade-in market. Consignments too.

 

[tarosean]

Is it ultimately smart for manufacturers to support drop-shippers like Bud's and gorillas like Wal*Mart at the expense of the LGSs? I'm not voicing an opinion; I'm asking a question...

I dont think the manufactures care as they move their product easily.

As for the consumer. We win and lose at the same time. We get that cheaper price but our local economy suffers. Amazon, Lowes, Home Depot, Walmart have all put countless places out of business. Local municipalities loose the tax revenue and we end up suffering. Whether it be slower response times from police/Fire or pot holes. It all has a trickle down effect.

In the end we will probably never be able to walk into a store and try something out. Whether it be a new big screen or a Glock. The landscape has been changed forever. Its hard for a mom and pop business to compete these days, period. It dont matter the product.

I am sure I am not alone when it comes to purchasing weapons and my need to hold and inspect the weapon (new or used). The last gun I purchased from Wallyworld was a S&W 645. That should tell you its been a while. If I was suddenly unable to "try out" a gun before purchase I would be content with what I own...

 

[JohnBT]

"In the end we will probably never be able to walk into a store and try something out."

Maybe where you live.

For 60 years we've had Green Top Sporting Goods (and other local shops.) Then Gander Mountain opened around the corner from them and Bass Pro opened a mile away. You could see GM and Bass Pro from I-95, but Green Top was over on U.S.#1. Pundits predicted the demise of Green Top.

Gander Mountain left Richmond last month. Green Top has leased the building.

There's nothing like the hands-on buying experience. And there are obviously a lot of folks around here who will pay for it.

 

[beatledog7]

JohnBT, that's a great story. Thanks for sharing it and providing hope.

My favorite LGS and range offers discounted range membership with the purchase of a firearm. When it's all tallied, an on-line buyer who pays shipping, a transfer fee, and range dues usually spends more for the whole deal than in-store buyer.

That assumes the LGS can get said gun, of course.

 

[tarosean]

^ For what its worth, I dont see how gander mountain stays in business period.

 

[RetiredUSNChief]

Is it ultimately smart for manufacturers to support drop-shippers like Bud's and gorillas like Wal*Mart at the expense of the LGSs? I'm not voicing an opinion; I'm asking a question...

There are some competing ideologies here that have to be considered when discussing these dynamics.

The purpose of any business, ultimately, is to make a profit. This is the foremost ideology of a business if it want's to succeed. If it doesn't make a profit, it fails.

To that end, manufacturers support those who sell their products. If a business can sell a lot of the manufacturer's product, then the manufacturer will do business with them.

If manufacturers don't do this, then other companies will step up to the plate and fill in this marketing and sales hole...which causes a drop in sales and profits for the original manufacturer and may ultimately lead to their demise.

In the bigger picture, manufacturers and businesses must also consider how they go about doing business because the long term consequences may lead to loss of profits as well. But they can't make a stand solely on altruistic ideologies...because the realities of business don't work that way. There has to be a balance.

And that balance, for a manufacturer, isn't the same as the balance for the LGS, the internet store, or even the individuals purchasing the product.

Competing ideologies includes profits, cost savings, quality, additional services, variety/choice, volume, personal views/beliefs, etc.

It may not seem fair...but if there's one thing I've learned in life, it's that not only is life not "fair", but the very definition of what "fair" is varies with perspective.

 

[oneounceload]

I think if we could order guns on-line without the services of an FFL, like many things, most LGSs would already be things of the past

Before the GCA of 1968 you could do just that, and yet every gun store, hardware store, drug store and major department stores ALL also sold guns and even had others put their name on them. Most folks do not like to "buy a pig in a poke" - they want to handle it and get a sense of whether they will like it or not

 

[Kynoch]

There are some competing ideologies here that have to be considered when discussing these dynamics.

The purpose of any business, ultimately, is to make a profit. This is the foremost ideology of a business if it want's to succeed. If it doesn't make a profit, it fails.

To that end, manufacturers support those who sell their products. If a business can sell a lot of the manufacturer's product, then the manufacturer will do business with them.

If manufacturers don't do this, then other companies will step up to the plate and fill in this marketing and sales hole...which causes a drop in sales and profits for the original manufacturer and may ultimately lead to their demise.

In the bigger picture, manufacturers and businesses must also consider how they go about doing business because the long term consequences may lead to loss of profits as well. But they can't make a stand solely on altruistic ideologies...because the realities of business don't work that way. There has to be a balance.

And that balance, for a manufacturer, isn't the same as the balance for the LGS, the internet store, or even the individuals purchasing the product.

Competing ideologies includes profits, cost savings, quality, additional services, variety/choice, volume, personal views/beliefs, etc.

It may not seem fair...but if there's one thing I've learned in life, it's that not only is life not "fair", but the very definition of what "fair" is varies with perspective.

That's not necessarily true when it comes to guns. While new, very small companies pop-up two things hamper the free market for guns:

* The GCA of 1968 severely limits foreign competition.

* Much of society views guns as a "dirty" business. Even if there is good money to be made, other existing large companies are loathe to begin making guns. Just imagine for a moment how good a revolver from Yamaha would be if they got into the business...

 

[Kynoch]

Before the GCA of 1968 you could do just that, and yet every gun store, hardware store, drug store and major department stores ALL also sold guns and even had others put their name on them. Most folks do not like to "buy a pig in a poke" - they want to handle it and get a sense of whether they will like it or not

Times have also changed dramatically. I don't think most of these sources stopped selling guns because of FFL requirements.

Buying a Glock 17 from Bud's is hardly buying a "pig in a poke."

 

[Kynoch]

"In the end we will probably never be able to walk into a store and try something out."

Maybe where you live.

For 60 years we've had Green Top Sporting Goods (and other local shops.) Then Gander Mountain opened around the corner from them and Bass Pro opened a mile away. You could see GM and Bass Pro from I-95, but Green Top was over on U.S.#1. Pundits predicted the demise of Green Top.

Gander Mountain left Richmond last month. Green Top has leased the building.

There's nothing like the hands-on buying experience. And there are obviously a lot of folks around here who will pay for it.

What does Green Top do that Gander Mountain does not?

 

[RetiredUSNChief]

That's not necessarily true when it comes to guns. While new, very small companies pop-up two things hamper the free market for guns:

* The GCA of 1968 severely limits foreign competition.

* Much of society views guns as a "dirty" business. Even if there is good money to be made, other existing large companies are loathe to begin making guns. Just imagine for a moment how good a revolver from Yamaha would be if they got into the business...

I see your point.

However, there are plenty of existing firearms manufacturers who would happily step into the void that would open up if another were to fold up, for whatever reason.

Indeed, there are plenty of examples of gun designs which are made by more than one manufacturer...the 1911, for example, is made by several manufacturers...and plenty of successful varients based on that design as well. I imagine Baretta would not mind at all if Taurus went out of business...or perhaps vice-versa. And wheel gun designs abound, as well. If Colt no longer produced lever action rifles, companies like Marlin would pick up the slack for new gun purchases.

 

[Kynoch]

I see your point.

However, there are plenty of existing firearms manufacturers who would happily step into the void that would open up if another were to fold up, for whatever reason.

Indeed, there are plenty of examples of gun designs which are made by more than one manufacturer...the 1911, for example, is made by several manufacturers...and plenty of successful varients based on that design as well. I imagine Baretta would not mind at all if Taurus went out of business...or perhaps vice-versa. And wheel gun designs abound, as well. If Colt no longer produced lever action rifles, companies like Marlin would pick up the slack for new gun purchases.

I don't really think that's the case. I think most gun manufacturers are close to plant capacity right now. I think most are being extremely shrewd not to add capacity for two reasons. First is the capital investment required. Second though, I think the all realize the market will head down at some point and if they start beating themselves to death for increased market share, their profits go in the toilet.

Yes though I very much agree, were it not guns, the competition would be fierce and the prices would have dropped long ago.

 

[MAKster]

If there is consumer demand for a product stores will exist to sell it. Whether it is a sole proprietor gun store, a national chain, or a hardware store. If national chains or internet dealers drive small local stores out of business it will only be because consumers are choosing to buy from them instead of local gun stores. If consumers stop buying from small shops because they are getting a better price and selection from other sellers then so be it. There is nothing sacred about small independent gun shops.

 

[beatledog7]

A lot of the market for guns has nothing directly to do with manufacturers or wholesalers. The used gun market thrives, as we know. That's because :

1) Guns are very durable
2) People who understand guns are generally unafraid to buy them used
3) Firearm enthusiasts are always looking to trade off guns that don't meet their expectations
4) First-time buyers may well be seeking bargains and perceive second-hand guns as meeting their needs

There may be other reasons I should have listed, but these are sufficient to make the point.

A local gun shop that serves as a sort of local used gun brokerage, even as a pawn shop, stands a far better chance of surviving than one that focuses on what we might call "standard" retail operations. Every shop I know of does this, and that's where they find a large chunk of their profitability, the part that has nothing to do with gun makers and distributors. Granted, there are on-line competitors in the used gun market as well, but buyers of used guns like to touch and feel even more so than buyers of new guns. They can't do that on line.

If a shop sells pre-owned firearms and also deals in accessories, reloading items, and ammo (right when people need these items, not with three or four business days shipping time) and can also provide range services, gunsmithing, CCW classes, and an atmosphere the gun-owning public enjoys, that shop has a chance to survive even if it sells very few new guns at retail prices.

If an LGS can't create something the gun buyer wants that he can't get cheaper on line or at a big-box, that LGS will inevitably fail. Capitalism still succeeds even though some businesses fail. That's how it works.

 

[JohnBT]

"What does Green Top do that Gander Mountain does not? "

I don't know, I only went to GM twice and never could find anything to buy.

Green Top has something like 4000 guns, decent prices and very experienced sales staff, some with more than 30 years. Open 7 days a week, fresh and salt water fishing gear, live bait, archery, reloading, clothes, etc. You know stuff. Established 1947.

"Jan 22, 2009 – Orlando, FL - Winchester® Ammunition presented the 2008 Dealer of the Year Award to Green Top Sporting Goods during the 2009 SHOT SHOW..."

 

[Kynoch]

If there is consumer demand for a product stores will exist to sell it. Whether it is a sole proprietor gun store, a national chain, or a hardware store. If national chains or internet dealers drive small local stores out of business it will only be because consumers are choosing to buy from them instead of local gun stores. If consumers stop buying from small shops because they are getting a better price and selection from other sellers then so be it. There is nothing sacred about small independent gun shops.

You apparently didn't get the gist of my original posting. In sum, guns are different from other products. There have been severe import restrictions since 1968 and it takes an FFL to ship/receive one. I was asking about the condition of that sales/supply chain.

 

[Kynoch]

A lot of the market for guns has nothing directly to do with manufacturers or wholesalers. The used gun market thrives, as we know. That's because :

1) Guns are very durable
2) People who understand guns are generally unafraid to buy them used
3) Firearm enthusiasts are always looking to trade off guns that don't meet their expectations
4) First-time buyers may well be seeking bargains and perceive second-hand guns as meeting their needs

There may be other reasons I should have listed, but these are sufficient to make the point.

A local gun shop that serves as a sort of local used gun brokerage, even as a pawn shop, stands a far better chance of surviving than one that focuses on what we might call "standard" retail operations. Every shop I know of does this, and that's where they find a large chunk of their profitability, the part that has nothing to do with gun makers and distributors. Granted, there are on-line competitors in the used gun market as well, but buyers of used guns like to touch and feel even more so than buyers of new guns. They can't do that on line.

If a shop sells pre-owned firearms and also deals in accessories, reloading items, and ammo (right when people need these items, not with three or four business days shipping time) and can also provide range services, gunsmithing, CCW classes, and an atmosphere the gun-owning public enjoys, that shop has a chance to survive even if it sells very few new guns at retail prices.

If an LGS can't create something the gun buyer wants that he can't get cheaper on line or at a big-box, that LGS will inevitably fail. Capitalism still succeeds even though some businesses fail. That's how it works.

You point about dealing in used guns is very true.

While many, many sellers compete against big box stores, gunsellers for the most part do not -- particularly when it comes to handguns. Guns are perceived as far too "dirty" of a business for Costco or Target to get involved in. WalMart sells guns but only long guns to my knowledge and their in-store selection is often limited.

I'll ask again. Is the new model going to be manufacturers selling directly to consumers with the FFL work being handled by Mailboxes Etc., Kinkos, the UPS Store or other such operations?

If I was a UPS Store franchisee and it were allowed I would have an FFL right along with my notary license. Yet another service to offer my customers.

 

[mnrivrat]

If a shop sells pre-owned firearms and also deals in accessories, reloading items, and ammo (right when people need these items, not with three or four business days shipping time) and can also provide range services, gunsmithing, CCW classes, and an atmosphere the gun-owning public enjoys, that shop has a chance to survive even if it sells very few new guns at retail prices.

And there is a reasonably good explaination of how to make it work . The devil is in the details, and the "if" .

Diversification is important in todays marketing from a small business stand point. Example is the pawn shop where the merchandising can be somewhat secondary to the business, but yet an important part of it. A multiple of services is becomeing more necessary. There is no substitute however for running the business right ,which means meeting customers wants and needs.

 

[MAKster]

I understood your OP. In fact, the unique laws regarding the sale of firearms ensure that local stores will always exist. If you buy a gun over the internet it legally must be shipped to a FFL in your state. So even if all sales are done over the internet local stores will still exist. Not the case with other products that you buy over the internet. If you buy a book or a pair of shoes if can be shipped directly to your house with no local store needed. If federal law required all Amazon purchases to be sent to a local store for your pickup, I'm sure people would be complaining that the government was interfering with free market to prop up unneeded local stores.

 

[leadcounsel]

I believe the big-picture anti-gun plan was to require FFL and expensive paperwork ultimately to drive gun sales and ultimately ownership under...

In the Eutopia of California it is much more so. I was there recently at a gun store. Guns were about 50% more expensive than any other state I've lived in (TN, VA, GA, WA). I had sticker shock. On top of that is the 5 day wait period. Blek. Some Eutopia...

The more hassle it is, the less people participate.

At the OP Kyoloc:

California is a wonderful place to live. To suggest otherwise is the old envy talking once more. Other places in the USA have truly draconian arms laws (NY, NJ, MA, WDC, etc.) but they don't attract even a fraction of the misplaced vitriol because of the envy matter.

You suggest CA is "oppressive state, incredibly backward and screwed up" with absolutely no proof. One thing that bothers people like you most is that CA is so "forward" that it leads the nation and what's pioneered here eventually dribbles down to the rest of the states. It will be interesting to see how long your waiting period will one day be... It will be interesting to hear your comments then.

The angry tenor of your posting underscores your bitter envy for California.

Yes, it's the anti-gun mentality that is perpetuated by the leadership in California that are like a plague that sweep the nation pushing for absolute absurdity in gun laws, that will drive FFLs out of business unless we put a stop to it. If California is forward in anything, it certainly is anti-gun laws (along with IL, NY, NJ, MA...)

Gun sales should involve two people, the buyer and the seller. Period. Not the Government. Not a middleman. In FREE states, this is how transactions can work. I don't care if you have pretty mountains in CA, the laws there suck, and it's that mentality if left unchecked will ruin the 2A.

California, in all its greatness, DOESN'T EVEN HAVE A GUN RIGHTS SECTION IN ITS STATE CONSTITUTION!!! It's one of a few states that fails in this regard. http://www.saf.org/constitutions.html#WithOut

In Wonderful CA, private sales require an FFL, so the FFL has nobody to compete with. Everything goes through the FFL. Hence why they can charge WAAAYYY more than the fair value of a gun in 45 other states.

It is sad that FFLs and the paperwork to exercise a right have become so bureacratic. It's the anti-gun tactics to drive out gun ownership.

 

[Kynoch]

I understood your OP. In fact, the unique laws regarding the sale of firearms ensure that local stores will always exist. If you buy a gun over the internet it legally must be shipped to a FFL in your state. So even if all sales are done over the internet local stores will still exist. Not the case with other products that you buy over the internet. If you buy a book or a pair of shoes if can be shipped directly to your house with no local store needed. If federal law required all Amazon purchases to be sent to a local store for your pickup, I'm sure people would be complaining that the government was interfering with free market to prop up unneeded local stores.

Will LGS's always be counted on to process deliveries of guns or will places like the UPS Store offer FFL mailings?

I know if I was a UPS Store franchisee that I would have applied for an FFL long ago. In that context, $20.00 transfers a make a lot of sense -- just another service.

 

[Kynoch]

I believe the big-picture anti-gun plan was to require FFL and expensive paperwork ultimately to drive gun sales and ultimately ownership under...

In the Eutopia of California it is much more so. I was there recently at a gun store. Guns were about 50% more expensive than any other state I've lived in (TN, VA, GA, WA). I had sticker shock. On top of that is the 5 day wait period. Blek. Some Eutopia...

The more hassle it is, the less people participate.

At the OP Kyoloc:

Yes, it's the anti-gun mentality that is perpetuated by the leadership in California that are like a plague that sweep the nation pushing for absolute absurdity in gun laws, that will drive FFLs out of business unless we put a stop to it. If California is forward in anything, it certainly is anti-gun laws (along with IL, NY, NJ, MA...)

Gun sales should involve two people, the buyer and the seller. Period. Not the Government. Not a middleman. In FREE states, this is how transactions can work. I don't care if you have pretty mountains in CA, the laws there suck, and it's that mentality if left unchecked will ruin the 2A.

California, in all its greatness, DOESN'T EVEN HAVE A GUN RIGHTS SECTION IN ITS STATE CONSTITUTION!!! It's one of a few states that fails in this regard. http://www.saf.org/constitutions.html#WithOut

In Wonderful CA, private sales require an FFL, so the FFL has nobody to compete with. Everything goes through the FFL. Hence why they can charge WAAAYYY more than the fair value of a gun in 45 other states.

It is sad that FFLs and the paperwork to exercise a right have become so bureacratic. It's the anti-gun tactics to drive out gun ownership.

Sure they were...

 

[leadcounsel]

Sure they were

I'll take the Pepsi challenge. I can buy a second hand used Glock FTF with another legal citizen EVERY DAY here in Washington state for between $400 and $450. No hassle at all. Just the basic questions to ensure it's all legit. As it should be. I can also walk into any average gun store, and buy a new Glock for about $515 or less.

In California, I've seen them average about $700.

Remington 870 12 gauge - $300 or less every day in Washington. FTF for used ones, you're looking at $250.

In California, $400-$500!!!