Mom & Pop Local Gun Stores, Are They @ Financial Risk?

[runco]

In my professional position with the company I work for, I routinely review and mentor others on how to detect and measure financial risk of vendors and suppliers to avoid part supply interruptions. It doesn't take a Jack Welch to know that the business landscape that our favorite local mom & pop gun stores are working in, may cause them to be @ serious financial risk in the near future.  I will explain.

 

We all know the local gun stores have been sizzling in record sales and likely profits. However, that has been short lived.  The inventories are gone, and rationing of re-stocking of the hot items is occurring, gun stores cannot restock with healthy inventories.  So the bread and butter is gone or seriously hampered.  In addition, market conditions have produced a retail nightmare. Those individuals that would have bought guns/ammo this spring, have accelerated their plans, and made the purchases now in the great ammo gun panic of 2012/2013. So those retail sales that LGS needed in the near future, are likely gone, or seriously eroded.  Coupled this issue with a lack of quality levels of inventory, and then the LGS are left with revenue streams not meeting operating costs, and we all know what that means.  So those LGS will have no choice but to change their business model, cut costs, explore new retail items, or in critical situations, run very lucrative sales to just pay the bills. Only those LGS that are very healthy (flushed with cash, or the owners are able to give back profits), have concealed carry training classes, or on site firing ranges, will sustain this business cycle.  I am not advocating a cash mob be organized and target LGS, but I simply advocating awareness not only for customers but also those retail clerks who are working for those LGS.

Just some deep thoughts to consider. I am actually quite bored this evening, and haven't been posting in a few days, and feel pinned up with my thoughts and outbursts this evening.

Edited February 11, 2013 by Runco

[pcrc11]

All bubbles burst eventually. The higher the bubble the harder the crash.

[dralarms]

Spoke with one today. Said they can't get anything to sell and the rent and light bills don't stop. Shame though, I sure hope they survive.

[RED333]

Sad truth, we as firearms did a lot of this.

The Pres knew it would go this way, I want to think anyway.

[Guest nra37922]

Panic buying has done this.  People are SCARED and hoarding like crazy.  All I can say is 'Thank you Mr. President, you have really united the people'  What an ahole....

[2.ooohhh]

Yes but several I've talked to did 3-6 months worth of sales in 1 month, so they should have made enough to cover expenses going forward at least a couple months with light sales volume.

 

Our car dealerships had the same issue when cash for clunkers was going on b/c the lot cleaned out of all the cars that met the criteria. It took almost 6 months to get inventory of the more fuel efficient cars back up and skewed the numbers for the fiscal year but the cars were still sold and financed and the money was in the bank. 

 

I think where they are sitting now is much better than had an executive order come down that made 11+ round mags illegal overnight before they could clear out any inventory.

[gregintenn]

I've seen a lot of new gun stores open in the past year or two. I do not expect many of them to still be open next year.

[DaveTN]

The same amount of guns is being made. Small shops will be hurt if the distribution network changes. I assume the big stores may get increased inventory, which means the guys at the bottom are out of luck.

 

I went on GunBroker the other day to see if my 308 AR was bringing the crazy kind of prices people are talking about. They have some crazy prices listed, but when I searched only the auctions that have completed; those high priced guns had no bids. So it doesn't seem to be as bad as some are making out.

 

 

[TripleDigitRide]

The same amount of guns is being made. Small shops will be hurt if the distribution network changes. I assume the big stores may get increased inventory, which means the guys at the bottom are out of luck.

As has been me mentioned in another thread, Whittaker's has received roughly 100 ARs in the last 10 days. I don't know exactly how that compares to what our local shops are receiving, but based on what I'm hearing from those in search of them, our shops aren't quite that fortunate. They've also received at least 25 complete upper halves in the same time period. And have you seen the pictures of their ammo walls? My gosh! They have more ammo than the 20 nearest Wal-Marts combined.

[orientalexpress]

We got in 60+ ARs (I don't have an exact number). It looks they're starting to flow again but certain handguns have really dried up. as far as I can tell a few people are starting to bargain shop again so I'm guessing they're becoming more readily available.

[TripleDigitRide]

We got in 60+ ARs (I don't have an exact number). It looks they're starting to flow again but certain handguns have really dried up. as far as I can tell a few people are starting to bargain shop again so I'm guessing they're becoming more readily available.

May I ask where you work?

[orientalexpress]

May I ask where you work?

Actually I'd prefer not to say for 3 reasons. The first being I don't know what the companies exact policy on posting in public forums as an unofficial representative of the company. Second I don't really care to be bombarded with PMs and emails about certain products. Mainly because I am not an official spokes person of the company (we have a guy that handles web advertisement, etc.) Third, at some point I'm probably going to say (and probably already have) something inflammatory and I don't want someone emailing my boss and getting me fired.

I hope you can understand and respect my reasoning.

[TripleDigitRide]

Actually I'd prefer not to say for 3 reasons. The first being I don't know what the companies exact policy on posting in public forums as an unofficial representative of the company. Second I don't really care to be bombarded with PMs and emails about certain products. Mainly because I am not an official spokes person of the company (we have a guy that handles web advertisement, etc.) Third, at some point I'm probably going to say (and probably already have) something inflammatory and I don't want someone emailing my boss and getting me fired.

I hope you can understand and respect my reasoning.

Yes, I completely understand. Makes perfect sense.

[Grand Torino]

The little guy will lose out if he has no guns or ammo to sell. It's a damn shame.

[Dennis1209]

It doesn't look pretty for my for my local FFL, he deals mostly with AR'S.

 

I ordered a Stag Arms AR-15 back in December and it's a two year wait for completes, uppers and lowers, so I assume most other manufacturers are about the same. Seems to me in today's competitive economy turn over is key?

[No_0ne]

Yes but several I've talked to did 3-6 months worth of sales in 1 month, so they should have made enough to cover expenses going forward at least a couple months with light sales volume.

 

Our car dealerships had the same issue when cash for clunkers was going on b/c the lot cleaned out of all the cars that met the criteria. It took almost 6 months to get inventory of the more fuel efficient cars back up and skewed the numbers for the fiscal year but the cars were still sold and financed and the money was in the bank. 

 

I think where they are sitting now is much better than had an executive order come down that made 11+ round mags illegal overnight before they could clear out any inventory.

However, the great sales boom caused by cash for clunkers roughly coincided with GM and Chrysler shutting down a number of dealers, therefore mitigating the slow sales affect after the CFC program ended.  I think the OP is right, many small retailers will crash and burn in the near future.

[battleop]

The same amount of guns is being made. Small shops will be hurt if the distribution network changes. I assume the big stores may get increased inventory, which means the guys at the bottom are out of luck.
 
I went on GunBroker the other day to see if my 308 AR was bringing the crazy kind of prices people are talking about. They have some crazy prices listed, but when I searched only the auctions that have completed; those high priced guns had no bids. So it doesn't seem to be as bad as some are making out.
 

 

There was a ding dong with a table at the Shriners gunshow in Chattanooga this weekend with $1000 on a S&W MP-15. He also was telling people he had a great deal on a "PRE-Ban" GSG MP5 22 LR. I didn't know they were made before 94'. When I left the show late in the day on Sunday he still had them.

[Oh Shoot]

There was a ding dong with a table at the Shriners gunshow in Chattanooga this weekend with $1000 on a S&W MP-15....

 

That's not not necessarily a gouge price on a M&P AR right now,. unless it's a quite used Sport, maybe. New Sports were mostly ~800 and up after the election even before Sandy Hook and of course most of the M&P AR line was $850-1400 even back in normal times.

 

Any $1000 AR at the last gun show I went to, you'd have been trampled by buyers.

 

Or maybe the AR market is finally becoming saturated, even though most folks still looking can't find one. Hell, you can't even find the pieces to frigging build one, and if by some miracle you do, it's gonna be that $1K at the very least.

 

- OS

Edited February 12, 2013 by Oh Shoot