I wonder why, with things in the state that they are, that no one is setting up shop on a mass scale and cranking out things like magazines, ammunition, or receivers and barrels for high demand weapons.
Let me just share my thought on this. I know firsthand that you can work with machine builders to get what you want by the end of the week if you're willing to pay for it. If you want a press that will stamp out AR-15 aluminum mags all day long, you really aren't "dreaming" to think you could produce tens of thousands a month. Let's just keep going with the AR-15 magazine here. So then you need a follower, and that's easy enough, just buy a plastic injection molding machine which would be incredibly easy. The spring is the one thing that I wouldn't know anything about, but again, its a long piece of spring steel, nothing too special there. Weld it together and bam, not so difficult. Take your production volume/capacity figures to the big three who are bare on stock (Brownell's, Cheaper than Dirt, and Midway) and you have your buyer. Here are the hurdles I see, but even so, I think it is incredibly doable and very low risk for an investor:
1) ATF licensing. This is the big thing I could see being a hurdle, for things like ammunition magazines do you need some sort of license to produce a firearm part?
2) Overhead of facility/human resources. It wouldn't take a huge facility to accommodate the machinery and warehousing space for an operation. There would be a diminishing marginal cost to run multiple machines to increase output, as well. Industrial production space is abundant and cheap right now. I'm picturing a very low cost for a one year (or so) lease to get started. With lots of unemployed welders, maintenance techs, machine operators, and QC inspectors, you'd have no problem finding qualified production personnel willing to work for a reasonable wage.
3) Sourcing of materials. In some cases is the entire industry bottlenecked right now on something like "There is only 1/2/3 companies that produce all gunpowder" or things like that? Magazines are what get me because they don't involve a relatively scarce material like gunpowder. You're talking literally about steel, aluminum, and plastic. No more abundantly are any materials used in consumer goods than those three commodities.
4) Market projections with respect to legislation and supply/demand. I could see an investor being skeptical that legislation could render their operation obsolete, or an investor being concerned that the current demand levels are only a temporary bubble. However, to the first point I would say this. The legislation (on the federal level) would take nearly a year to take effect, and the provision of the bill very well could be that there is a one year period before it takes effect, meaning at a minimum you could get out six months of manufacturing and possibly even two years if a ban were to pass. If a magazine ban did pass, business would in fact get EVEN BETTER for you. There would be a HUGE demand for the "capacity limit" size magazine, whatever it was. So, you simply retool and start stamping out (or molding) 5, 10 , 15, or 20 round bodies. Use the same follower and floor plate, a different spring, and now you're ready to supply a massive market that legislation produced overnight. To the second point on long term market demand, I would say that even if nothing happens legislatively the demand will be drastically elevated for at least the duration of Obama's administration, and almost assuredly beyond it. We can almost count on gun control being a much larger debate issue for candidates in 2016, and there will again be the election panic within a few years. All of the new AR-15 owners this recent panic has produced has inherently created an expanded market for magazines.
5) Finding distributors. With the big three sites being sold out, I think they would all be eager to buy if you could demonstrate a product of even moderate quality. If for some reason they were not interested, the gun community online is viral. Post a link to your website (cheap and easy to create) on all of the major national and regional forums, then you sit back and wait as the orders roll in from all four corners of the internet. "In stock Mil-Spec AR-15 Magazines, ships same day, $20/ea, free shipping on orders over $100." The only two words that matter in this market right now are "in stock."
There, that's my pitch. Say you're a venture capitalist in a bad economy. What is one thing you literally cannot go wrong selling right now, and that you could almost immediately start producing? Magazines. I could run the same argument for ammunition and receivers, but in particular I find it shocking that three months into a big panic, where magazines are selling for $50/ea+, that no one has stepped up to the plate. If someone had given me nearly unlimited funds and placed me in charge of coordinating it, I could literally have a warehouse full of gov-spec quality mags ready to ship right now. I have worked with engineers, contractors, vendors, machine shops, quality assurance, and materials analysts and it takes work, yes, but you can make anything happen with sufficient financial backing and hard work.
Let me just share my thought on this. I know firsthand that you can work with machine builders to get what you want by the end of the week if you're willing to pay for it. If you want a press that will stamp out AR-15 aluminum mags all day long, you really aren't "dreaming" to think you could produce tens of thousands a month. Let's just keep going with the AR-15 magazine here. So then you need a follower, and that's easy enough, just buy a plastic injection molding machine which would be incredibly easy. The spring is the one thing that I wouldn't know anything about, but again, its a long piece of spring steel, nothing too special there. Weld it together and bam, not so difficult. Take your production volume/capacity figures to the big three who are bare on stock (Brownell's, Cheaper than Dirt, and Midway) and you have your buyer. Here are the hurdles I see, but even so, I think it is incredibly doable and very low risk for an investor:
1) ATF licensing. This is the big thing I could see being a hurdle, for things like ammunition magazines do you need some sort of license to produce a firearm part?
2) Overhead of facility/human resources. It wouldn't take a huge facility to accommodate the machinery and warehousing space for an operation. There would be a diminishing marginal cost to run multiple machines to increase output, as well. Industrial production space is abundant and cheap right now. I'm picturing a very low cost for a one year (or so) lease to get started. With lots of unemployed welders, maintenance techs, machine operators, and QC inspectors, you'd have no problem finding qualified production personnel willing to work for a reasonable wage.
3) Sourcing of materials. In some cases is the entire industry bottlenecked right now on something like "There is only 1/2/3 companies that produce all gunpowder" or things like that? Magazines are what get me because they don't involve a relatively scarce material like gunpowder. You're talking literally about steel, aluminum, and plastic. No more abundantly are any materials used in consumer goods than those three commodities.
4) Market projections with respect to legislation and supply/demand. I could see an investor being skeptical that legislation could render their operation obsolete, or an investor being concerned that the current demand levels are only a temporary bubble. However, to the first point I would say this. The legislation (on the federal level) would take nearly a year to take effect, and the provision of the bill very well could be that there is a one year period before it takes effect, meaning at a minimum you could get out six months of manufacturing and possibly even two years if a ban were to pass. If a magazine ban did pass, business would in fact get EVEN BETTER for you. There would be a HUGE demand for the "capacity limit" size magazine, whatever it was. So, you simply retool and start stamping out (or molding) 5, 10 , 15, or 20 round bodies. Use the same follower and floor plate, a different spring, and now you're ready to supply a massive market that legislation produced overnight. To the second point on long term market demand, I would say that even if nothing happens legislatively the demand will be drastically elevated for at least the duration of Obama's administration, and almost assuredly beyond it. We can almost count on gun control being a much larger debate issue for candidates in 2016, and there will again be the election panic within a few years. All of the new AR-15 owners this recent panic has produced has inherently created an expanded market for magazines.
5) Finding distributors. With the big three sites being sold out, I think they would all be eager to buy if you could demonstrate a product of even moderate quality. If for some reason they were not interested, the gun community online is viral. Post a link to your website (cheap and easy to create) on all of the major national and regional forums, then you sit back and wait as the orders roll in from all four corners of the internet. "In stock Mil-Spec AR-15 Magazines, ships same day, $20/ea, free shipping on orders over $100." The only two words that matter in this market right now are "in stock."
There, that's my pitch. Say you're a venture capitalist in a bad economy. What is one thing you literally cannot go wrong selling right now, and that you could almost immediately start producing? Magazines. I could run the same argument for ammunition and receivers, but in particular I find it shocking that three months into a big panic, where magazines are selling for $50/ea+, that no one has stepped up to the plate. If someone had given me nearly unlimited funds and placed me in charge of coordinating it, I could literally have a warehouse full of gov-spec quality mags ready to ship right now. I have worked with engineers, contractors, vendors, machine shops, quality assurance, and materials analysts and it takes work, yes, but you can make anything happen with sufficient financial backing and hard work.
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