Brownells – Frank Talk About Guns September 2009
Brownells.com – -(AmmoLand.com)-We’ve been doing some “reality checks” around here last week, trying to get a handle on how our industry is doing and how we need to prepare for the upcoming year.
As we look back, it would seem that most all of us in the industry have had a fantastic run of business. Our industry has been recognized by shooters, non-shooters and even the economic whiz-kids on Wall Street, as one of the very few bright spots during this economic downturn.
You probably saw it in the huge volume of sales starting right at the election in November, 2008, peaking somewhere around Easter, 2009 and then sliding back closer to the traditional summer slow-down we always see.
In doing our analysis here, we asked ourselves the following three questions and tried to come up with answers. You might want to stop a moment and with a fresh cup of coffee, ask yourself these questions about your business and how you feel about your future.
- Is this “Obama Gun Sale Bubble” over?
- Is demand for firearms and ammunition coming down to the standard demand curve for our business?
- What can we do for the remainder of 2009 and all of 2010 to match or beat those high sales in the “Bubble” months of 2008-09?
We came up with some answers, which I’ll pass along to you, but they really are only our opinions from our viewpoint. Hopefully you will find something in here which will be beneficial to you in your business.
We believe the insane demand level for tactical firearms is over and future demands for these products will come back down to the industry norms. Keep in mind, though, there have been a huge number of non-traditional firearms buyers making purchases of AR-15’s. So there are a lot of customers out there who will still want to accessorize and modify one of the world’s most versatile and popular platforms. Definitely still a market for AR-15 “stuff”, but a much softer one for the basic platform itself.
The conceal carry/home defense market, however, is starting to heat up and right now is the beginning of a “short boom”, not as significant as tactical rifles, but one nonetheless. We don’t know how much leg this market can get under it or how long it might run. It is getting lots of play right now in the gun press, so take a look at how you can get into it modestly and watch it closely.
We strongly believe the reloading and ammo markets are still underserved and have strong growth ahead of them. It will take longer to get these markets back to a norm because the primer shortage. The deep fluctuations/price increases in the metals markets from which most of these ammo components are made – lead, copper, brass has an impact on availability and prices. Our industry’s share of these markets is not even a wrinkle, and we have neither control nor any leverage we can bring into play. We just have to wait for the metals markets to settle out.
Shotgun and hunting markets did not seem to have the favorable run-up as the tactical weapons market. From what we think we see, there might be some returning strength. It looks like reservations for hunts have still to recover. We definitely expect those to slowly come back, but quite possibly not until folks are more comfortable the economy has settled down and a general recovery is underway. Hunts are discretionary, more easily put off.
For net results for 2009, don’t focus too much on beating year-over-year numbers. Our last year was way out of the norm. Instead focus on the year’s sales number. With the history we’ve had, it would actually be acceptable to have a 0% growth year in 2010 – it all depends when your fiscal year ends and where the “Obama Bubble” fell. Sometimes it’s just nice to have survived and to be able to move on!
About:
Brownells is the world’s largest supplier of firearm parts, gunsmithing tools, reloading equipment and accessories. Stocking more than 30,000 items, the company supplies armorers, gunsmiths, and shooters worldwide. All of their products are backed by a 100% satisfaction, unconditional, lifetime guarantee. For more information, or to place an order, call 800-741-0015 or visit Brownells.com