Gun manufacturers loving the panic?

[knox]

If you were a gun manufacturer - or retailer for that matter, would you not love the panic right now?

 

You can't make ARs quickly enough.  Or Magazines for Glocks.  Or ammunition.  

 

As much as we hate gun legislation, do you not think that those in the business of selling are happy about it right now?  

 

As someone in sales, I wonder how far ahead of those pesky "sales goals" these people are right now.  I don't know if there are territory or regional sales managers in firearms and ammunition, but you have to believe that if there are, they will have the biggest bonus / increase in sales EVER!  

 

Next year will certainly be a drop, but I would love to have that bonus check this quarter  :stunned:

[pcrc11]

Everybody makes money keeping the gun battle alive. Exactly why I think nobody will ever will it or would even want to win it. Both the gun and anti gun lobby's will make a ton of money, not to mention attorneys, politicians let alone the manufacturers.

[knox]

This has been more successful than Barrack's "stimulus package", that's for sure.

[orientalexpress]

I want to know how many manufacturers were at or near max capacity as it is? There's only so many raw materials they have and can get at any given time. Same goes for production. The dealers and distributors have the most to gain I think, until the manufacturers catch up.

[vontar]

I know this is Tinfoil hat area but doesn't anyone else find it strange that we are not even getting a glimp of sighting of new AR's, Lowers, and ammo hitting the market place?

 

I know when some magically hits a shelf it is going to be snapped up like there is no tomorrow but for them being in full production, one has to wonder where it is going.

 

The walmart on Clinton hwy website shows they have some .223 in stock, they have show instock since about Friday.

However I was down there both on Friday and Saturday and s manager told me they didn't have any.

 

They scanned the sticker in their ammo case and it reported they have 29 boxes.  Either a inventory mistake or they would not put it on the shelf.

[monkeylizard]

Retailers should be having mixed emotions on it. They made their intended profit (sometimes profit+more) on their existing stock, but now they don't have much to sell. So they're now paying salespeople to stand around telling customers "thanks for coming in with a wad of cash, but we can't take it off your hands." If they can keep enough stock coming in from their distributors to make enough profit on to pay the bills, they can weather through it. Otherwise, it will start eating their cash reserves. I expect it's a tough spot for some of them.

Edited January 20, 2013 by monkeylizard

[DaveTN]

I don’t think the manufacturers are the one’s making out on this; it was hard to locate guns I wanted when times were good. They don’t seem to be the ones jacking prices through the roof. Panic buying and people reselling are causes the prices to go up.

 

I’m sure some of these gun companies are worried that their main products (semi-autos) will be banned or have serious restrictions put on their sales.

 

[TGO David]

I'm going to deviate from the pack and state that I think this is an absolute nightmare scenario for the manufacturers.  They can't build their stuff fast enough, they dare not add more production capacity with the uncertainty of what legislation might come down the pipe in a few more weeks, and they're pretty much running their existing staff 24/7 to keep up with demand which means their workforce is likely already tired and burning out.

 

My guess is that the only companies who are loving this right now are run by greedy fucks who don't care if their company is still around a year from now as long as they can bankroll their retirement in Costa Rica before the government shuts down the party.

[knox]

I'm going to deviate from the pack and state that I think this is an absolute nightmare scenario for the manufacturers.  They can't build their stuff fast enough, they dare not add more production capacity with the uncertainty of what legislation might come down the pipe in a few more weeks, and they're pretty much running their existing staff 24/7 to keep up with demand which means their workforce is likely already tired and burning out.

 

My guess is that the only companies who are loving this right now are run by greedy fucks who don't care if their company is still around a year from now as long as they can bankroll their retirement in Costa Rica before the government shuts down the party.

 

There may be some wisdom in this post and other replies.

 

Why aren't we seeing more guns and ammo hit the shelves?  That is a good question.  Ammo, though, I don't understand.  It should be available in spades, because the magazine scare doesn't affect the rounds being offered for sale.

 

Catch 22 for sure on the firearms.  Build a lot to sell now, but perhaps have a surplus that won't sell if they become illegal.  However, you would think you could still find Glocks and Shields and Walthers.  

 

Why isn't Smith and Wesson working round the clock putting out Shields that sell once they hit the shelves?

[knox]

And, I didn't think about paying employees to stand around and say they can't take money.

 

That doesn't bode well.  I wonder what they can do about calling their local Smith or Glock representative and get some guns coming in?  Obviously, not much CAN be done.

[TGO David]

I wonder what they can do about calling their local Smith or Glock representative and get some guns coming in?  Obviously, not much CAN be done.

 

C'mon man... think about that statement.  Do you believe for a second that the owners of all these gun shops with empty shelves are stuck in that boat because they didn't think to call their rep and order more inventory?

 

If the problem were that simple to fix, we wouldn't be having this conversation.

[knox]

C'mon man... think about that statement.  Do you believe for a second that the owners of all these gun shops with empty shelves are stuck in that boat because they didn't think to call their rep and order more inventory?

 

If the problem were that simple to fix, we wouldn't be having this conversation.

 

I was more thinking out loud than anything, which is why I ended the statement with "Obviously, not much CAN be done".

 

But I admit, I deserved the "C'mon man".  One of my favorite ESPN segments.  Well done.

[orientalexpress]

There may be some wisdom in this post and other replies.

Why aren't we seeing more guns and ammo hit the shelves? That is a good question. Ammo, though, I don't understand. It should be available in spades, because the magazine scare doesn't affect the rounds being offered for sale.

Catch 22 for sure on the firearms. Build a lot to sell now, but perhaps have a surplus that won't sell if they become illegal. However, you would think you could still find Glocks and Shields and Walthers.

Why isn't Smith and Wesson working round the clock putting out Shields that sell once they hit the shelves?

I heard that at least one of the manufacturers was going to cut back production on some of the items that mostly wouldn't be affected by legislation (ie small revolvers) to focus on things that would be.

[knox]

So...

 

Once we hit a state of equilibrium - that is, all In Stock guns and ammo have been sold, and stock is either not available or slow at best.  What then?  How long can a Local Gun Shop operate without sales?

 

Or minimal sales?  3 guns in, 3 sold.  Then what for the rest of the day?  Can Holster sales keep them afloat?

 

I am starting to see this whole thing in a new light from the perspective of places like Personal Defense Options and Bill's Outpost.  

[TGO David]

Honestly I think a lot of local gun shops are worried right now.  Now more than ever it's important to support TGO's own Vendors and give them the valuable business they need to keep their lights on, doors open and employees paid.

[knox]

Honestly I think a lot of local gun shops are worried right now.  Now more than ever it's important to support TGO's own Vendors and give them the valuable business they need to keep their lights on, doors open and employees paid.

 

I agree completely.  But what if there is nothing to buy?  That's the general concern, I am starting to see.  And it is frustrating having money to spend but can't find the thing you are looking for.

 

Wishing the best for those small business owners, and hoping the storm is over soon.  Once again, our inept president causing more trouble for the common man.

[TGO David]

I agree completely.  But what if there is nothing to buy?  That's the general concern, I am starting to see.  And it is frustrating having money to spend but can't find the thing you are looking for.

 

Wishing the best for those small business owners, and hoping the storm is over soon.  Once again, our inept president causing more trouble for the common man.

 

Short of making a donation to their "keep the lights on" fund, I really don't have an answer for you. Or maybe that's the answer we're going to have to consider if this drought of firearms, ammo and gear continues.

[mav]

I disagree with some of the comments in this thread.  I think is great for business and manufacturers love it.  Seriously, what company wouldn't love to have their inventory incredibly low because it is selling as fast as they can make it?  An additional benefit of the current market is it provides employment opportunities for those that are out of work.  Even if it may be temporary, having a job is better than not having one.

 

For companies that may have been struggling before this frenzy, this could be a godsend to help keep their doors open and perhaps give them enough working capital to retool or develop a new business model to make themselves more competitive in the future.  Even the government is benefiting, which I find ironic, from the increased firearms sales.  They are collecting more taxes.

 

The only group of people that I see that are not benefiting from this situation are those who weren't prepared, and are now forced to compete with a frenzied public over a limited supply of goods.  They can either do without, or they can pay higher prices. 

[DaveTN]

The guns are going to dealers. The dirt bags that are trying to rip everyone off have to buy from them. So unless it’s a case of the big dealers keeping guns from the small dealers, why would the dealers not have sales?

 

Just a question.

[TripleDigitRide]

The guns are going to dealers. The dirt bags that are trying to rip everyone off have to buy from them. So unless it’s a case of the big dealers keeping guns from the small dealers, why would the dealers not have sales?

 

Just a question.

 

I'm guessing there are several small dealers who are hurting for that very reason. In times like these, I'd suspect the larger dealers with more buying power are being offered the "hot items" before they have a chance to trickle down to the smaller dealers.

[DaveTN]

I disagree with some of the comments in this thread.  I think is great for business and manufacturers love it.  Seriously, what company wouldn't love to have their inventory incredibly low because it is selling as fast as they can make it?  An additional benefit of the current market is it provides employment opportunities for those that are out of work.  Even if it may be temporary, having a job is better than not having one.

 

For companies that may have been struggling before this frenzy, this could be a godsend to help keep their doors open and perhaps give them enough working capital to retool or develop a new business model to make themselves more competitive in the future.  Even the government is benefiting, which I find ironic, from the increased firearms sales.  They are collecting more taxes.

 

The only group of people that I see that are not benefiting from this situation are those who weren't prepared, and are now forced to compete with a frenzied public over a limited supply of goods.  They can either do without, or they can pay higher prices. 

It’s manufacturing, not assembly. We just spent $1.2 million on two machining centers because of a new contract. If we lost that contract in a year or the product was cancelled we would be in serious trouble.  All of the big boys were selling everything they could build prior to this; but they can’t add new lines at millions of dollars; this is going to end in one of two ways… and neither would justify that kind of spending for machines that would eventually be sitting idle.

[mav]

It’s manufacturing, not assembly. We just spent $1.2 million on two machining centers because of a new contract. If we lost that contract in a year or the product was cancelled we would be in serious trouble.  All of the big boys were selling everything they could build prior to this; but they can’t add new lines at millions of dollars; this is going to end in one of two ways… and neither would justify that kind of spending for machines that would eventually be sitting idle.

 

All of the manufacturers were running at max capacity before this spike?  Speculation, or you know this for a fact?

 

I do agree that manufacturers are probably not going to invest a lot of money in additional machinery to increase capacity to cover this spike in sales.  They can contract some of it out.

[DaveTN]

All of the manufacturers were running at max capacity before this spike?  Speculation, or you know this for a fact?

 

I do agree that manufacturers are probably not going to invest a lot of money in additional machinery to increase capacity to cover this spike in sales.  They can contract some of it out.

Smith & Wesson has been in business for over 150 years. I would guess that they build what they think they can sell.

This is what they are faced with now. Hard to get investors for capitol improvements when your stock is dropping.

http://www.bostonglobe.com/business/2012/12/20/smith-wesson-threatened-weapons-ban/CoRnTqc7OlMcVDf9qcUGqM/story.html

 

Contracting stuff out also costs money to maintain quality control. We can’t contract stuff out because of certifications; I don’t know if that applies to them or not. Gun owners are a crazy bunch; it could be a real PR nightmare if they had problems with a “contracted” gun. I include myself in that “crazy bunch”; I can’t finish out my M&P collection with a .22 because it isn’t made here.

[Chucktshoes]

All of the manufacturers were running at max capacity before this spike?  Speculation, or you know this for a fact?
 
I do agree that manufacturers are probably not going to invest a lot of money in additional machinery to increase capacity to cover this spike in sales.  They can contract some of it out.

Last April I attended an armorer's course for the M&P pistols. According to the S&W rep they had enough orders at that point to run 2 8 hour shifts for 2 years if they didn't accept another order. If you remember, Ruger temporarily suspended new orders because their backlog was so large. That is the norm across the industry.

[mav]

Last April I attended an armorer's course for the M&P pistols. According to the S&W rep they had enough orders at that point to run 2 8 hour shifts for 2 years if they didn't accept another order. If you remember, Ruger temporarily suspended new orders because their backlog was so large. That is the norm across the industry.

 

Everyone agrees that a ban would be bad for the industry, and that it may force some manufacturers and dealers go out of business.  That is a separate issue from the OP, which was a simple question as to whether or not manufacturers love the panic. 

 

It is really nothing more than basic economics.  When demand exceeds supply, that benefits those that are creating the supply.  They have guaranteed sales, they can keep their costly inventories low, and if they so choose, they may be able to increase margins on their goods.  On the flip side when supply outweighs demand, manufacturers do not benefit.  They either have to reduce production, decrease costs, drop prices, or create some new item that has a higher demand.  Right now we have the former scenario, and it is really benefiting manufacturers. 

 

In the case of S&W, perhaps they can put on a 3rd shift, or outsource (doesn't necessarily mean outside of the country) some of their production and capture extra sales.  Right now, as long as supply is available, it is going to sell regardless of where it is coming from.

 

The following is not directed at you Dave.  I have been reading a lot of comments over the last several weeks in regards to there should be rationing of certain items (making sure everyone gets their fair share), price fixing, and how explosive growth/demand, which is probably temporary, is bad for business.  People that believe in free markets shouldn't really use that kind of language.  In doing so, they are doing nothing more than espousing some of the tenets of socialism and command economies.

Edited January 20, 2013 by mav