When The Levee Breaks

We’re in the midst of a huge gun-buying bubble right now, and have been for almost eight years. All bubbles burst. All of them, ever since the days of the Dutch buying tulips. What happens when the gun market cools off?

  • If you’re not Smith and Wesson, Ruger, Sig, or similar you’re probably boned.
    I remember what happened after the PC market crashed, and the smaller players who didn’t have gobs and gobs of capital stashed away quickly went tango-uniform.
  • If you’re Smith and Wesson, Ruger or Sig and you can’t adapt quickly, you’re probably boned.
    Yahoo! and AOL were the bee’s knees of the early days of the internet, now they are both struggling to exist.
  • If all you sell is guns, you’re probably boned.
    Compared to other consumer products, guns have a phenomenally long product lifecycle. I go out and buy a new computer every three years or so (and even that is long time compared to others), but if I did my homework and bought a gun that met my needs, I probably won’t have to buy another one for a long, long time. Heck, I have three guns that are going into their sixth decade of service, the M1903, 870 Express and K-22 I inherited from my father-in-law, and they show no signs of slowing down.
  • If you sell accessories, you’ll do ok.
    Add-ons like grips, sights, lasers and whatnot are an easy way to improve an initial gun purchase, and they’ll be needed as all those new gun owners figure out new ways to enjoy their new guns.
  • If you sell ammo, you’ll do more than ok.
    Guns require ammo in order to be anything other than an awkward club. Unlike floppy disks, which were replaced by something else, there is no replacement for the self-contained cartridge on the horizon. Demand may wane a bit has the dilettantes drop out of gun culture, but if you’re an ammo maker, you have more incentive to make guns a permanent part of our lifestyle than just about anyone else out there in the industry.

And let’s go with the Kansas Joe McCoy/Memphis Minnie version of the title, not the Led Zeppelin version.

This Post Has 13 Comments

  1. Boom and bust, bro. They were building the shit out of houses in about an eight years cycle too, not so much after ’08 (coincidence?)…contractors, trades, brokers, agents, bankers came out of the woodwork then went back in, but the tortoises stayed around and survived, now a few rabbits are popping up again. And houses last a long time too, but there’s lots of people to house, upgrade, add a 2nd house, etc. Point being, the underlying market weathered the storm, and are back fairly steady again.

    Same with some other markets, like shootin’ irons. Lots of those little popup producers and retailers will fold, they did (and are still doing so far) well and the strong will survive when (if) the impetus fades, as usual. And the 350 million of ’em that are in private hands will stay there until needed, ifyaknowwhatimeanandithinkyado. Supply/demand…same as it’s ever been.

    1. The housing boom of the early aughties created demand for interior decorators, landscapers, pool cleaners etc, that continues on to this day.

      Realtors, contractors? Boned.

      Or to put it another way, what do you do when the deer now have guns? You get into the ammunition business.

  2. Really, really, really cheap used AR-15s and glock clones for consumers? Also, the bubble won’t burst for at least the length of the Hillary presidency assuming she wins. At worst it will deflate slowly.

  3. Some small producers will still be around. People will still want to buy custom 1911’s that haven’t been bubba’d.

  4. If Clinton wins the election, we’re going to see a run that will make 2013 seem tame. Guns shops will be cleaned out inside of 24 hours, and every manufacturer in the industry will be struggling to keep up. Wait for it.

  5. I think Glock will do ok but they may want to get into long-guns to complement their pistol portfolio. But I am wondering how both Colt and Remington will do when the levee breaks. My guess is Remington will do better because of their ammunition line. Will be interesting, no doubt about it.

    1. Colt can’t do well when lots of people PREFER Colts.
      Remmy’s owners have a much deeper pool of names to play with (drop) before the green R gets the pink slip.

      From Kev, if I did my homework and bought a gun that met my needs, I probably won’t have to buy another one for a long, long time
      I’ve got guns that have been “in service” since the early 1900s.
      Never stopped me from buying more…

      1. True, but you’re an enthusiast. The people buying all the guns right now are not enthusiasts, they’re new to gun culture, and whether they’ll buy more guns or not will be based on whether they feel they got enough value from their first purchase.

  6. I like to look a the selling prices for Colt 1903 .32 ACP Hammerless pistols for an indication of what the gun market is doing. These are not highly sought by collectors, and they haven’t been made for decades, and they were made for 50 years.

    When I couldn’t buy an AR-15 anywhere, these were selling cheap, because people needed money to buy the scarce, evil black rifles that everyone wanted but nobody had for sale. Sell off the old noncollector 1903 for $500 to help get an AR!

    Nowadays prices are rising again. Hmm.. And I can have all the ARs I want, at reasonable retail prices. Hmmm.

  7. The tulip ‘panic’ is now seen by economists to have been a rational response to certain lending rules imposed by the Dutch government, and it ended when the underlying legal loopholes that made it profitable ended.

    What are the underlying reasons for the growth of gun purchases?

    That is the $1,000,000 question.

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