State of the Gun Market Address

[brchixwing]

Sorry if this topic is beaten to death but I've had this discussion at least 20 times this summer with friends and gun deal counter parties, felt like ranting. I am personally very grateful of this fantastic gun & ammo glut, the state of the Gun Market is AWESOME. Gun prices have finally normalized after a half decade since Sandy Hook. We finally mean reverted after an insane period of peak regulatory fear driven demand coupled with a number of tragedies and ISIS headlines.

Gun prices are so low that we smile and go WTF when we see some deals, I know at least a dozen guys that got Shields with $75 rebates (myself included for a 45 shield) & I just got the same rebate on a C308. Ammo prices are even more awesome, I've been consistently paying about $0.18/rd shipped for quality 9mm factory ammo (SGammo.com , targetsportsusa.com , even brownells!), and have even been plinking with 300BO & 308. On top of massive inventory destocking, the strong dollar gave cushion for ammo co's like Magtech from Brazil, S&B from Czech Repub, Fiocchi from Italy, PPU from Serbia etc. who have their costs in some struggling currency and sales in US dollars. AmmoSeek.com & SlickGuns.com have been very entertaining!

Looking ahead to future gun valuations (+2-3 years)... at this point in time general consensus is that Trump won't just walk into re-election... which means we will see gun prices inflect in the next few years, when whichever commie Bernie Sanders protege steps up to the plate to face off with #45. Polls are pretty BS because they didn't call #45's election but the latest are <40 as of Charlottesville & Afghanistan did not help (fingers crossed real tight for tax reform). Your $250 Shield after rebate might be worth $500 on the next craze, your $500 AR might be worth $1000, which would be a 100% unlevered returns over 3 years.

In the near term there is no catalyst to prices sharply inflecting, it will be a "U" shaped rise off the floor that probably looks more like a bunch of "M" with different promotions... and then a sharp step function in 2-3 years when we get fear of left wing leadership. The secondary market is still crowded with tons of independent speculators that Hilary/Obama-hoarded both guns & ammo and are now strapped for cash. Mom & pop operations are hating but joining in on the heavy promotional environment, especially with gun buyers now getting more comfortable with E-Commerce... BudsGunShop.com is basically Amazon & tax + shipping free! (Columbus, IN's Watson Chambers offers free FFL transfers, amazing team that wants to help us out) Bigger Boxes are still rationalizing, Gander bankruptcy, Bass Pro Swallowing Cabela's, Sportsmans Warehouse now focusing on smaller stores all mean there was too much capacity in the system. Retailers and manufacturers keep pointing to the sports shooting scene gaining traction, more women and youth shooters, but we all know they aren't the ones buying a gun every other paycheck. In any case, we are somewhere around the floor in prices, as noted by the endless $400 AR posts on here.

In summary, the trough has made shooting awesomely affordable again, we are fortunate. For speculators, the glut has created an opportunity if you can have your money tied up for 2-3 years.

 

[PhxCollier]

So, looking at this from a investment perspective, what would be your guess at the best potential returns?

ARs - because they are most likely to be targeted by legislation? Or would their price plummet because potential sales or transfer would be blocked?

low end 9mm's ? Entry level self defense type guns?

Glock 19's ? Due to the current popularity? Gen 5s, which would still be current model in 3-4 years?

i kind of doubt the upper end collector guns would be as much return, but...

ammunition? I was not actively shooting a few years ago, but it sounds like 22 ammo availability was an issue, so it that likely to reoccur?

just thinking out loud...

 

[throttletony]

Investing in firearms and ammo is a bit risky - just like any investment. I've always come at it from a "future personal use approach" to build up my own reserves.
I would think that as far as potential returns:
#1 - Name-brand AR's and mags (meaning any recognizable brand, not necessarily expensive AR's, but not DIY 'frankenguns') would likely do ok if crazy legislation/political season happens.
#2 - Semi-auto pistols (and MAGS!!!!) of all varieties could do well, if the market dries up going into midterm or presidential elections. The only way this type of "investment" would pay off is if you get a killer deal from the get-go, like the current rebates. The only way I see these increasing in value is if left new in box (NIB). The market is flooded, and will be for a while, with used semi-autos that I don't think they'll get much increase, especially when competing against such low prices for new. Now, in 4 years, this may look very different since there are so many new shooters entering the market.
#3 - reloading supplies, specifically powder and primers
#4 - mags
#5 - mags
#6 - maybe some ammo in common calibers like .22LR, 9mm, .380, .40, .45 acp, .357 mag, .223, .308 (most likely brass cased, bought cheap and/or with rebate - I don't think that steel cased ammo would bring much return unless things got really dry for a long time)
#7 - mags

Other notable thoughts: collectors pieces have slow and steady increases, but they might often just keep up with inflation (rare exceptions like certain Colt revolvers). Same thing goes for used revolvers - they hold their value well, but may not increase much. I wouldn't expect a big swell in new & used shotguns and hunting rifles.

In my opinion... it's worth noting that one must be careful when buying guns to then flip them for profit. The BATFE has a lot of latitude in determining if someone is running a business without an FFL. I do not know of any specific cases, but the verbiage in the law (unless it's changed in the last year) does not specify a limit (of firearms sold, or $ amount) to stay under. Correct me if I'm wrong.

 

[brchixwing]

I agree! Especially on buying at distressed prices being the key, #1 and #2 are definitely the most oversupplied so they're the most distressed and would be the most liquid when demand picks back up.

On transactions, I was told over 5 separate transfers including a handgun (as a seller) in a calendar year would put you on the map, and you'd be screened. You can transfer as many as you want with each transfer so there is no theoretical cap. I used to live in California where this mattered because everything was way more regulated... Fortunately in Indiana, most secondary market transactions are generally not done with their paperwork.

Investing in firearms and ammo is a bit risky - just like any investment. I've always come at it from a "future personal use approach" to build up my own reserves.
I would think that as far as potential returns:
#1 - Name-brand AR's and mags (meaning any recognizable brand, not necessarily expensive AR's, but not DIY 'frankenguns') would likely do ok if crazy legislation/political season happens.
#2 - Semi-auto pistols (and MAGS!!!!) of all varieties could do well, if the market dries up going into midterm or presidential elections. The only way this type of "investment" would pay off is if you get a killer deal from the get-go, like the current rebates. The only way I see these increasing in value is if left new in box (NIB). The market is flooded, and will be for a while, with used semi-autos that I don't think they'll get much increase, especially when competing against such low prices for new. Now, in 4 years, this may look very different since there are so many new shooters entering the market.
#3 - reloading supplies, specifically powder and primers
#4 - mags
#5 - mags
#6 - maybe some ammo in common calibers like .22LR, 9mm, .380, .40, .45 acp, .357 mag, .223, .308 (most likely brass cased, bought cheap and/or with rebate - I don't think that steel cased ammo would bring much return unless things got really dry for a long time)
#7 - mags

Other notable thoughts: collectors pieces have slow and steady increases, but they might often just keep up with inflation (rare exceptions like certain Colt revolvers). Same thing goes for used revolvers - they hold their value well, but may not increase much. I wouldn't expect a big swell in new & used shotguns and hunting rifles.

In my opinion... it's worth noting that one must be careful when buying guns to then flip them for profit. The BATFE has a lot of latitude in determining if someone is running a business without an FFL. I do not know of any specific cases, but the verbiage in the law (unless it's changed in the last year) does not specify a limit (of firearms sold, or $ amount) to stay under. Correct me if I'm wrong.

 

[throttletony]

I agree! Especially on buying at distressed prices being the key, #1 and #2 are definitely the most oversupplied so they're the most distressed and would be the most liquid when demand picks back up.

On transactions, I was told over 5 separate transfers including a handgun (as a seller) in a calendar year would put you on the map, and you'd be screened. You can transfer as many as you want with each transfer so there is no theoretical cap. I used to live in California where this mattered because everything was way more regulated... Fortunately in Indiana, most secondary market transactions are generally not done with their paperwork.

As a general firearms enthusiast, it's hard to see how big brother would know if you had done 1, or 5, or 25 - especially in Indiana where there is no registry.
I recently moved to Michigan, where handguns are registered and long guns are not. At the state level, they might be able to figure out who's buying and selling a lot of handguns, but not so with long guns. And that's only the state, not the fed gov

 

[223 Gunner]

I think when demand picks back up, notice I said when not if. The market is so saturated with AR's I don't think we will see Sandy Hook prices in a long time.
Everyone that wants/wanted an AR will have 3.

If I were just investing my money in items to later flip, I would buy Ammo and mags, they take up less room (in most instances) than guns do.
And require vey little to no maintenance.
Next would be hand guns, they usually will sell quickly in just about any market, except the current one, and if priced right will sell now.

If I were going to stock up on rifles to later move, AR's would be last on my list because of the amount of them out there, same with Glock 19's.
I would buy cheaper AK's, SKS's, Milsurp rifles etc. These items have always had an interest and will sell when the time comes to turn them loose.
Or basically any gun that is no longer made, or maybe some higher end hand guns to sell on gunbroker.
Speaking of gunbroker, it is about the only way to truly to get the money out of guns when flipping them.

So if you currently don't have a GB account, I would get one and do a few transactions to build up your feed back.

 

[churchmouse]

I have never approached any hobby/passion with investment as the reason. It is just not feasible.

If I were to do that all of the contents of the safe would be bone stock out of the box scared to touch them fire them fondle them for fear of loosing value. Boring.

The value in this besides having the ability to defend is in the using, modifying to taste, sharing, friendships gained by all of the above.

Absolutely no knock on those who do see this as an investment. I am just not one of those people. An investment is supposed to have a solid return when it is done.
To do as I have stated will only show a loss as the mods/use will devalue said investment. No worries.

 

[223 Gunner]

Just to be clear, I do not buy guns and ammo to later flip for profit.
Simply stating what one could do if one were so inclined, I too shoot my guns, yes I have sold some in the past basically to buy others.

 

[snapping turtle]

My kids know that the safes contain things for their grandchildren's grandchildren.

 

[LarryC]

Well, looking at the increased valuation of the firearms my son and I collect, it seems like the cheapest firearms I have purchased have increased in price more than the more expensive guns. For instance I purchased several SKS's for $89 and $99, today selling for more than double that. The exceptions are some of my Colt snake guns like my King Cobra and Anaconda, and my SVD 40 as a ban on import of those was enacted right after I purchased one. I have some Davis and like firearms I purchased for $50 new and Mosin's for $89 and $99, most could be sold quickly for nearly 200% of purchased price! Many other mid range price firearms have only increased in value 10 to 25% over the last 10 years. However I do not sell any, have no need nor wish to sell, all of these things will be left to my sons!

We also have cases of ammo that has doubled in price, like 7.62 X 39 Yugo, and the same caliber of old "armor piercing" ammo. I have several sealed spam cans of Russian 8 X 54R, German 8M ammo, and a few thousand rounds of CMP 30-06 Greek. Most of these have increased significantly in price, again I will never sell. MY son and I also have thousands of rounds of reloaded ammo, which is in my opinion not salable. We keep at least 30K of primers, bullets and enough powder to reload 30K of mixed caliber, and have enough lead and gas checks to produce many more bullets of most handgun and pistol caliber. We still buy ammo, powder, primers and bullets when we run into an exceptional deal, usually in bulk. I continue to purchase firearms regularly, this year have purchased a new Armalite 50BMG, a Heritage revolver (Rural Kings price was too low to pass up) and finished up 2 AR's.

There are other things to think about besides the monetary value. If a SHTF does occur (heaven forbid), I think firearms and ammo will be a currency worth more in trade than gold! I'm fairly certain if things get real rough, a Mosin with a few hundred rounds would easily be traded for a beef or a few swine. Our family are all fairly proficient with firearms and we would probably converge at one of my sons homes in the country where we could easily defend against marauders. We certainly won't run out of firearms or ammo!

 

[Bundy74]

Yes, I think it's a buyers market wright now, and it would be a prime time to pickup some Guns and ammunition before the midterm elections! But let's not go crazy and start grabbing everything you see , remember, chance favors the prepared mind!

 

[Mgderf]

I've never purchased a firearm with the intent to sell.
I have taken in one or two as a trade bumper.
That said, it seems I have a knack for buying non-collector type firearms that increase in value.

A decade or so ago I bought a brand new JM stamped Marlin 1894 in .44mag.
Six months later Marlin discontinued the model and the price almost doubled over what I paid.
I purchased a Norinco SKS in fantastic shape, for around $50. It would now go for $300 or more.

I bought a Rossi matched pair pistol set with two barrels, .22lr and .45Colt.
Rossi discontinued them less than a year later and again, the price went up over my purchase price.

I just bought a new Remlin 1895 in .45/70gvt. After the $100 rebate, I will have paid less for it than I paid for the 1894 a decade ago.
A few years back I purchased a Bersa Thunder in .32acp because I found it with a stupid low price.
A year or so later I learned that Bersa only imported about 1500 of the .32cal Thunders into the U.S.
They did not sell as expected, and as I understand it, never imported more of them.
My Bersa .32 is now worth twice what I paid.

I don't plan on selling any of my firearms, but it is nice to know that most of mine have increased in value, and I shouldn't lose money if I did decide to sell.

Right now, I hear Kirk Freemans voice in my head telling everyone, "Buy 'em cheap and stack 'em deep..."

 

[Leadeye]

I've always enjoyed shooting older firearms and buying those in need of some help for restoration. I can say that this market has risen steadily. Ammo is like gasoline for the car, just something you use to get the full value of ownership.

 

[M67]

The glut and low prices can only last so long. Manufactures, distributors, and retailers can only sell so many things at a loss or break even cost before they can't pay bills. Lot of gun manuf. didn't think the election would go the way it did and they had warehouses worth of stuff ready to ship......then the tens of millions of dollars of order cancellations happened and they have warehouses of inventory that needs sold. So they dumped them and super flooded the market just to get money back.

It can only happen for so long, if you have the means and want to pick up a few things, you should

 

[brchixwing]

Absolutely, demand *will* pickup. I think AR demand will also resume, market seems a lot more saturated than it is because every guy on here has multiple, as do our friends. Next round of regulatory fear will introduce more new AR owners to our ranks.

Handguns are absolutely much more liquid, easier to store and kind of the gateway drug for new shooters looking for a CC / HD before they buy their 870/500 and the ultimately contract black rifle disease.

Mags are definitely a bargain these days, I just ordered 10 AK Pmags from PSA for $90 shipped! Conversely, I haven't been seeing many milsurp deals / maybe lag from Obama import restrictions / importers waiting for better prices?

I think when demand picks back up, notice I said when not if. The market is so saturated with AR's I don't think we will see Sandy Hook prices in a long time.
Everyone that wants/wanted an AR will have 3.

If I were just investing my money in items to later flip, I would buy Ammo and mags, they take up less room (in most instances) than guns do.
And require vey little to no maintenance.
Next would be hand guns, they usually will sell quickly in just about any market, except the current one, and if priced right will sell now.

If I were going to stock up on rifles to later move, AR's would be last on my list because of the amount of them out there, same with Glock 19's.
I would buy cheaper AK's, SKS's, Milsurp rifles etc. These items have always had an interest and will sell when the time comes to turn them loose.
Or basically any gun that is no longer made, or maybe some higher end hand guns to sell on gunbroker.
Speaking of gunbroker, it is about the only way to truly to get the money out of guns when flipping them.

So if you currently don't have a GB account, I would get one and do a few transactions to build up your feed back.

 

[brchixwing]

I am in your camp, I buy motorcycles and guns to get a kick out of my weekends & hang out with compadres, always shocked when I find crazy deals on safe/garage queens. Just bought a 5 year old Triumph Street Triple with 2000 miles on it, and the first thought that came to mind was the scene from 40 year old virgin, seeing a toy collection in all original boxes.

I have only sold guns in the past when I moved states and didn't feel like shipping my whole safe, and then I learned your lesson lol... you really only lose your money on mods! On the investment case, I don't personally speculate on firearms, but am aware that they are often a substantial portion of my friends' "liquid" assets, and many people do buy/sell opportunistically with major shifts in the market.

I have never approached any hobby/passion with investment as the reason. It is just not feasible.

If I were to do that all of the contents of the safe would be bone stock out of the box scared to touch them fire them fondle them for fear of loosing value. Boring.

The value in this besides having the ability to defend is in the using, modifying to taste, sharing, friendships gained by all of the above.

Absolutely no knock on those who do see this as an investment. I am just not one of those people. An investment is supposed to have a solid return when it is done.
To do as I have stated will only show a loss as the mods/use will devalue said investment. No worries.

 

[brchixwing]

I've heard about the golden age of C&R, and always get jealous when I talk to people that got to appreciate it! Buying semi-auto 30 cal rifles for $100 fresh from the crate is mind boggling. In general your market necks down really fast to a small market once you break the $1000+ mark, and have to tell the woman lol, median household income is only about $3K/month net. Less so for the <$500 market where tons of guys actively look. IN AR speak, <$1000 market necks down like 556, and the <$500 market is still nice and girthy like a 300BO.

Spam cans are great, solves every riddle of storage, can even dutch oven them in the yard & trade them for whatever if SHTF!

Well, looking at the increased valuation of the firearms my son and I collect, it seems like the cheapest firearms I have purchased have increased in price more than the more expensive guns. For instance I purchased several SKS's for $89 and $99, today selling for more than double that. The exceptions are some of my Colt snake guns like my King Cobra and Anaconda, and my SVD 40 as a ban on import of those was enacted right after I purchased one. I have some Davis and like firearms I purchased for $50 new and Mosin's for $89 and $99, most could be sold quickly for nearly 200% of purchased price! Many other mid range price firearms have only increased in value 10 to 25% over the last 10 years. However I do not sell any, have no need nor wish to sell, all of these things will be left to my sons!

We also have cases of ammo that has doubled in price, like 7.62 X 39 Yugo, and the same caliber of old "armor piercing" ammo. I have several sealed spam cans of Russian 8 X 54R, German 8M ammo, and a few thousand rounds of CMP 30-06 Greek. Most of these have increased significantly in price, again I will never sell. MY son and I also have thousands of rounds of reloaded ammo, which is in my opinion not salable. We keep at least 30K of primers, bullets and enough powder to reload 30K of mixed caliber, and have enough lead and gas checks to produce many more bullets of most handgun and pistol caliber. We still buy ammo, powder, primers and bullets when we run into an exceptional deal, usually in bulk. I continue to purchase firearms regularly, this year have purchased a new Armalite 50BMG, a Heritage revolver (Rural Kings price was too low to pass up) and finished up 2 AR's.

There are other things to think about besides the monetary value. If a SHTF does occur (heaven forbid), I think firearms and ammo will be a currency worth more in trade than gold! I'm fairly certain if things get real rough, a Mosin with a few hundred rounds would easily be traded for a beef or a few swine. Our family are all fairly proficient with firearms and we would probably converge at one of my sons homes in the country where we could easily defend against marauders. We certainly won't run out of firearms or ammo!

 

[Buckeye911]

Anyone have any extra cash I can borrow?

Pew Pew!