NEWS AND COMMENTARY ON THE FIREARMS INDUSTRY
PRODUCT AVAILABILITY EXPLAINED
Probably one of the biggest mysteries to American shooters over the last two years has been product availability. I am going to take a few moments and try to shed a little light on some of the most common questions concerning this matter.
1. Why are there shortages of guns and ammunition?
Folks, shortages in this industry are nothing new. What makes this time different is the duration of the shortage, not the shortage itself. We have been in the business a good while, 23 years. We have seen shortages due to Y2K, the election of Obama, the Sandy Hook shooting, and other events. The difference between then and now was the DURATION. Most of these shortages corrected themselves within a few months. The current shortage is entering its second year. So what created this? A multitude of events. First let me say this, COVID didn't cause anything, COVID is a virus, it is incapable of making decisions, people do that. And a lot of self righteous people who knew absolutely nothing about how an economy works made a lot of decisions in early 2020 that turned the entire economy (including the firearms industry) upside down. A free market works perfectly when you allow it too, but when you artificially control the supply or demand you offset it, which is precisely what happened. People tend to be reactionary, thus when concerns arose about potential shortages people became concerned, not just about being able to obtain what they need, but about others engaging in criminal activity and trying to take it from them. Thus explains the run on firearms and ammunition during the spring of 2020. Making a bad situation worse was the timing. March is typically the peak of the winter buying season as this is when many people receive their tax refunds (at least you did, with Brandon who knows) Typically by this time of year the wholesale distributors are letting their inventory sell down for the slower spring and summer season. The spring of 2020 was different though, the distributors sold out of handguns, MSR's, and ammo within days, and with the country shut down and little to know raw materials coming in the manufacturers were able to do little to help. As if the COVID restrictions weren't bad enough, by Summer riots were erupting all across the country as Democratic mayors stood back and watched. The American people already devastated by the severe economic sanctions imposed by many Governors now were faced with another threat. Gangs of violent criminals calling themselves "protesters" burning, looting, and stealing everything they could get their hands on. An already strained supply network was driven to the breaking point as demand continued to rise. Gun shops all across the country had empty display cases, empty rifle racks, and empty ammo shelves. And were calling distributors with empty warehouses in the hopes of finding a couple firearms and a few boxes of ammo to sell. Folks, it REALLY was that bad during the summer of 2020. by mid 2021 the shortages were beginning to ease, but had not ended. Ammo shortages persist to this day as do many firearm shortages. In short, the senseless shut down of the American economy in 2020 is the primary cause of the shortages that we are still to an extent dealing with today.
2. Why are some guns so easy to get but I can't find the one I want anywhere?
There are a couple reasons why you may not be able to find exactly what you are looking for. First, one must understand that the firearms industry is a global market. While most countries in the world do not enjoy the 2nd Amendment freedoms that we do, it must be understood that the law enforcement and military markets constitute a very large percentage of firearms production. Glock, SIG Sauer, Smith & Wesson, Mossberg, and many others sell thousands of firearms to foreign and domestic law enforcement agencies each year. In addition, these among other manufacturers have both domestic and foreign military contracts. The same can be said about ammunition. The LE and military markets are a big part of these companies business. Beyond this, it must be understood that the commercial market is a 50 state market, regional disparity aside, certain firearms sell far better than others. if your Glock you are going to sell a lot more model 43X's and 19's than you are model 36's. If your Smith & Wesson you can sell every single M&P Shield EZ you build, but maybe only a couple hundred model 29 Heritage revolvers. If your Ruger every single AR556 you can build is sold, but not nearly so many Mini-14's. Right now volume is king, and with raw materials availability still being sketchy at best, nobody is going to move away from building core models to build specialty models. And folks, that is not going to change any time soon. There is as much steel in one S&W Model 629 as there is in FIVE M&P Shields. And while there is no doubt that any dealer in the country can sell that model 629, S&W also know they can sell those FIVE Shields. It's dollars and cents folks, dollars and cents. The smaller manufacturers have had it even harder. Companies like Henry, Kimber, and Rock River simply lack the resources and buying power to secure raw materials like the larger companies The situation with ammunition is not much different. Every single round of 9mm and 5.56 NATO is sold before it event leaves the factory. With lead and copper in short supply and retooling resulting in lost time it simply does not make good sense to halt production to build some 6mm Remington and .22 Hornet. Of course, we can sell these, but the manufacturers know that they can sell the 9mm too. Folks it may not be what you want to hear, but it is business. When choosing your next hunting rifle or handguns availability of ammo should be a top consideration. Buying a used .257 Roberts or .41 Magnum right now is only a good idea if you already have reloading components or are looking for a good decoration for your man cave.
When are the prices going to come down?
Short answer, they are not. While it appears that ammunition prices have stabilized and the price gouging executed by many (pathetic) dealers seems to have eased it is simply unrealistic to expect prices to fall. The cost may retreat a dollar or two when (it's coming) the next recession hits, but we even consider that unlikely. Believe it or not the ammo manufacturers are making LESS on ammo now than ever. Why? You guessed it, material and labor costs. The instant the manufacturers see a dip in sales they are going to cut production, again, it is not good business to lose money on your product. Firearms likewise seem to be stabilizing in price, but a price drop is highly unlikely. In 2019 the (non incentive adjusted) retail price for a S&W M&P-15 Sport II was $669.99. Three years later the same rifle sells for $709.99. That is effectively a 6% increase in price. Go to Wal Mart and find one item in the store that has only risen 6% in the last three years. The price increase on new firearms is well below the current rate of inflation. We should be thankful, it could have been much worse.
In conclusion I hope this information is helpful. I know we don't always tell people what they want to here, but we always tell the truth. The firearms industry is forever changed from what it was three short years ago and it is going to continue to change. The best advice we can give our customers is to make your firearms purchasing decisions based on these key points. Buy a quality firearm from a reputable manufacturer that has proven popular enough that it will remain in production with parts and support for many years to come. Buy a firearm chambered in a cartridge that has proven popular enough that priority will be given to its production even during trying times. And lastly, never assume you have "enough" ammo. If it is available, and is reasonably priced, buy it. You will have no regrets.
VIRGINIA'S NEW GOVERNOR - WHAT IT MEANS FOR GUN OWNERS
The election of Republican Glenn Youngkin to Virginia's Governorship along with the reclaiming of the majority in the state House of Delegates was a welcome sight in the Commonwealth. Virginians had endured wight years of anti gun rhetoric in the Commonwealth which came to a head in early 2020 with the passing of several key anti gun pieces of legislation.
Although these victories are indeed cause for cautious optimism, there needs to be a clear understanding of what they mean, and what they do not mean. A pro gun Republican in the Governor's mansion means that effectively there is little threat of new anti gun legislation passing on the STATE level. However, with a heavy anti gun majority in the federal government, this threat still remains and should be the cause for major concern. Unfortunately, many are already letting their guard down already, we have even heard comments in the shop along the lines of "when Youngkin gets in there guns are going to come down." Nothing could be further from the truth. The firearms industry is a national market that depends on a global market for availability of raw materials. A change in the Governorship of Virginia will have absolutely no effect on pricing and availability.
Another issue that must be understood is the fact that anti gun forces are still in control of the State Senate. We will not have an opportunity to correct this until the 2023 election. Therefore, undoing any damage done by Northam will not occur immediately, not unless we can convince anti gun legislators to side with us, and we all know how likely that is.
In conclusion, while we are taking steps in the right direction it needs to be clearly understood that this is but the first of many battles in what will be a prolonged conflict to preserve our rights. We must stay vigilant and not allow our guard down.
STATE OF THE INDUSTRY - JANUARY 2022
Folks I would like to take this time to share some insights on the current state of the firearms industry that will hopefully shed a little light on the current pricing and availability situation. We at Commonwealth Arms have been active in this industry for 23 years and we are in daily contact with both our distributors and manufacturers. We do NOT dream up conclusions or spread false news, nor do we subscribe to the opinions of many online bloggers whom are not active in the industry. We collect data and share it, therefore you, the consumer can take it and make your decisions accordingly..
I don't want to sound like a broken record, but it is going to continue to rise. And it is going to rise at a larger rate than it ever has before, at least until the recession hits (and that is probably coming soon) To understand these price increases you need only understand the economy. In short, dumping tons of extra money into the economy (stimulus checks, augmented unemployment, etc) devalues the dollar. When the dollar is devalued, prices increase. Furthermore, when you disrupt a free market due to regulations or restrictions, you slow the harvesting of raw materials, and slow the production of goods. Combined with tons of extra money floating around (see above) this results in runaway demand without product to support it. Hence inflation, hence higher prices. The higher prices are NOT being caused by greed, despite what that guy that has been pulling the throw lever on a widget thrower for 34 years tells you because that is what he read in "Union Times" It is a simple case of supply and demand. Unfortunately, the "supply" was artificially disrupted by state and federal officials all in the name of "public health". Remember when President Trump told everyone back in March of 2020 that the "cure can't be worse than the disease"? Guess what? It was, now we are all reaping the consequences. And believe me, nobody is feeling it worse than the dealers, we are selling at lower margins than we ever have before. Folks, they are not going to come down, our best hope is for them to stabilize.
Much like pricing this is going to continue to plague the industry for some time. On a national scale this is less of an issue however. When we look at our distributor inventories today we see plenty of popular Glock, Ruger, S&W, Taurus, etc handguns in stock. We are also seeing plenty of quality AR type rifles The same can be said on ammo. Currently the top five best selling calibers in the country by a wide margin are 9mm, 5.56 NATO, .22LR, .45ACP, and .380 ACP. We have all of these in stock right now and have only recently had issues with the .380. Did you know that those five calibers alone make up 70% of the new ammunition sold annually? From a strictly business stand point it simply does not make sense to take them out of production in order to make something else. While I agree that it created some disruptions during hunting season, you have to look at it from a strictly dollars and cents prospective. If every round of 9mm you build is sold before it comes off the line, you are not going to take it out of production, simple as that. The same with guns. Did you know that just 11 models constitute 65% of ALL new firearms sold each year in the U.S? None of them are bolt action hunting rifles either. Every single LCP Ruger builds is sold before it leaves the plant, the same can be said about every Glock 19. The manufacturers have limited floor space and limited manpower. It is simply not realistic to expect them to take a popular item out of production to build an unpopular one. The shooting sports and personal defense market is slowly becoming more standardized. After many years of constant introduction of new models and calibers this trend is likely coming to an end.
In the above two paragraphs I have provided you with the facts, now we offer a solution. Bear in mind this is just our opinion, and though it may be hard for some to swallow, we feel that it would bring the current pricing and availability issues under control.. First of all, every single manufacturer in the world builds to many different firearms. Glock catalogs 18 different versions of the Glock 19 and Savage makes over 30 versions of the Model 10. This is absurd. Getting back to the basics is an absolute must. Duplicate product now accounts for half the firearms currently offered. Dead weight is another issue, these are guns that are still offered that sell in very low numbers each year. The Ruger 77 Hawkeye falls into this category, as do many more firearms. It is time to discontinue anything that cannot be sold in volume. The same can be said for ammunition. It is well past time to put obsolete calibers such as the .220 Swift and 7-30 Waters out of production in order to free up resources for current calibers. These older cartridges will always survive due to the efforts of handloaders.. At some point standardization must become a reality. Even with their duplicate models, Glock does this better than anyone, 70% of the parts interchange across their entire product line. It is noteworthy to mention that Glock has not had a manufacturers price increase since 2004.
Irregardless to what the solution is, Commonwealth Arms is committed to continuing to offer the best prices that we humanly can. We will also continue to work closely with our distributors to bring you the best product availability possible.