It seems like everything right now is in a state of flux or uncertainty. This is especially true in the firearms industry where parts, ammo, and even guns are hard to come by. Wilson Combat’s web series, The Gun Guys, recently took a look at the state of the firearm industry with a very frank discussion between Ken Hackathorn and Bill Wilson on the subject. What are their observations and predictions? Keep reading!
Wilson, who has been in the firearms industry for well over four decades, says that these are unprecedented times. He goes on to say that he has never seen anything quite like this in all his years, likening the current state of the firearms industry to rolling the Clinton and Obama elections plust the incidents in Las Vegas and Sandy Hook into one mass event. He says that is what it is like in the industry right now.
Especially hard hit are the ammunition companies as they are so overbooked with orders. Wilson talks about a large company that he knows of that if they stopped taking orders now, it would take them over two years to get fully caught up. The two conclude that the panic mentality that hit during the pandemic around firearms and ammunition make the toilet paper panic very minor in comparison.
The panic mentality in large part is affecting urban areas where people are calling to defund the police and where criminals are not being penalized hard enough. In this instance (and many others), people are turning to firearms to protect themselves and their families.
For manufacturing, it has been a perfect storm of the last presidential election, defunding of the police, riots and the groups involved in them, and violent offenders being released with little to no punishment. Due to those factors, the Gun Guys say that crime rates have gone up throughout major cities; in some instances it is like living in a war zone and has driven up the demand for firearms.
Bill Wilson points out that even though everyone has increased their production, they are all pulling from the same pool of raw goods, machinery, manpower, and so on. Things that used to arrive in mere days now take weeks or months to arrive and along with it the pricing has increased. Wilson says this is like the inflation cycle he saw in the 1980s. The freight costs go up along with the raw material pricing and the cost of labor, all adding to the bottom line.
Bill Wilson said that at the beginning of the pandemic, his company Wilson Combat had to pay more than 1.5 times the overtime rate to get anyone to work. He then went on to say that the unemployment checks as a stimulus made things worse for the industry. The increased price of labor drove up the overall costs, causing everyone in the industry to deal with the same issues.
Regardless of pricing, the demand is way up. With the increased profits, Wilson says they invested in the company to meet the demands. He says that the demand is off the charts for the AR rifles for their company, followed by the X9 series firearms and only a slight increase for the single stack 1911 handguns.
Ken Hackathorn asks Bill Wilson for his crystal ball answer for the future of the major areas of the industry. Bill covers four of them:
- Sport shooting
- New owners
Bill says that the ammunition section of the industry will be the longest to recover to “normal” levels and won’t slow down until after the midterm elections. He says that if the Republicans can retake the House and the Senate, the slowdown will start at the end of the year but won’t equalize until supply and demand match back up, in that you walk into a store and there is reasonably priced ammunition on the shelves. However, he thinks it will keep going strong if Republicans don’t take back the majority in Congress.
When it comes to guns, Ken and Bill predict that things will continue to be tight up until the midterm elections. If there are no major events, such as another mass shooting or gun control measure causing a spike in demand, it will act like the ammunition sector. If the Republicans retake the majorities in Congress, demand will drop off fast and products will be more available at a faster rate, so it should meet the demand with a corresponding reduction in prices. Essentially, it would be very different from when Trump was elected when the industry fell hard.
The next component they discuss is the shooting sports section. Bill states that the recovery of sport shooting wholly depends on the availability and pricing of ammunition. If there is ammunition and at a good price, they will come back. The one good thing about the squeeze is that it has made organizers of the shoots and trainings rethink the real number of rounds needed for the events.
New Gun Owners
The last section of the industry they discuss is the number of new gun owners. There is a lot of talk of the influx of new owners into the industry, but Ken Hackathorn thinks that the actual number has been overstated and it won’t have the effect that people are expecting. Bill thinks that the industry will be fortunate if 10 percent of the new owners become “gun people”, meaning they own multiple firearms, get involved in competitive shooting, and so on. Bill believes a lot of new owners are just one-trick ponies.
Ken Hackathorn ends the talk with a final message, saying that right now in America, the law enforcement community is under siege. He thinks it is insanity that America has a political party that wants to defund them and treat them like an enemy. His parting comment is if you see a law enforcement officer, tell them you appreciate them and all they do for the American people.