Roger Williams on American firearms industry

In the second part of his guide to dealing with our neighbours across the pond, Roger Williams gets down to the nitty gritty.

To read the first part, see: Examining the American firearms industry

American officials like dealing with Americans. If you want to sell in the USA, I advise that at a minimum you use an experienced US importer. Without one you run an increased risk of goods being impounded merely because of your unfamiliarity with the regulations and the different level of scrutiny given to your shipment.

Better yet, appoint a US distributor familiar with inter-state trade regulations, state labelling and state taxes, as well as other sales ‘hurdles’ discussed later.

Pyramyd Air and Airguns of Arizona have done well as distributors of airguns, albeit the scale of the airgun industry in the US does not compare to firearms that has been estimated by the NSSF (the firearms industry trade association) to have an economic impact of some $60 billion, including 330,000 jobs and $18 billion in wages alone.

A large part of this colossal industry is retailing, with the world’s biggest bricks-and-mortar retailer, Walmart, intimately involved. While guns remain a face-to-face transaction, continued shootings have brought pressure by consumer groups and gun-control advocacy groups, such as Guns Down America, for retailers to stop selling guns.

Walmart responded in September last year to a shooting in its El Paso, Texas store by announcing that the only Walmart stores still selling handguns, its Alaskan stores, would stop when they had sold their inventory.

Furthermore, all stores would stop selling “short-barrel rifle ammunition”, such as the .223 calibre and 5.56 caliber, and raise the customer age limit to 21 years from 18. 

Huntmart

Walmart has had a long tradition of supplying the needs of the US hunter. Its founder, Sam Walton, located his flagship store in Bentonville, Arkansas, close to his favourite quail-shooting ranch owned by his in-laws.

In February 2018, two weeks after the mass shooting in Parkland, Walmart’s commitment to supply hunters was re-affirmed, saying: “We have taken an opportunity to review our policy on firearm sales. Our heritage as a company has always been in serving sportsmen and hunters, and we will continue to do so in a responsible way.”

In keeping with this, Walmart continues to this day to offer shotguns, sporting rifles and air rifles. The Daisy brand, manufactured in the UK by BSA for Gamo, sells in large numbers every year in Walmart alone (see our BSA interview).

Other large sporting goods retailers in the US have taken different steps. Dicks Sporting Goods, the largest sporting goods retailer in the US, announced that it would phase out sales of all guns. After a ten store-trial, 125 Dicks stores stopped selling guns.

CEO Edward Stack told analysts in March last year that the company would treat gun control “as a multi-year initiative”, and in October last year, Dick’s sold eight of the stores of its subsidiary, Field and Stream, to Sportsman’s Warehouse. They were the most gun-centric stores. The expectation is that 440 of Dick’s stores will no longer be selling guns by the end of 2020. 

Despite this, sporting shotguns and sporting rifles (not assault rifles) remain widely available from big sophisticated retail superstores throughout the US.

A shrinking multitude of distributors service retailers and independent, smaller gun shops. Despite this, there remain more than twice as many registered firearms dealers in the US as there are McDonalds and Starbucks outlets combined. However, the last two years have witnessed a particular squeeze of these ‘middle man’ in the distribution of firearms.

Backing Hillary

It did not help that AcuSport, one of the US’s largest gun wholesalers, made a bet in 2016 that a democratic victory for Hillary Clinton would mean tighter gun laws and record sales.

AcuSport stocked up, big time. Trump’s victory removed fears of tighter gun laws, and demand cooled. AcuSport had to ‘settle its bet’, and offloaded stock at reduced prices to another distributor, Ellett Brothers.

In 2018, AcuSport filed for bankruptcy, and Ellett Brothers announced its own entry into bankruptcy proceedings last year. Many of the guns involved in this debacle made it onto the market and helped bring down prices and remove margins.

Last year, continued price pressure and surplus stock were felt across the gun distribution industry. Distributors like L M Burney from Waco, Texas with 67 years of history, announced that they would withdraw from the business. In 2019, Burney was joined by Green Supply, Lew Horton and Williams Shooters Supply, as they cited the inability to make a profit. 

Dear John

The letter announcing that Williams Shooters Supply was closing offers a real insight into what is happening inside the gun distribution industry: “We regret to inform you that we have made the decision to begin closing Williams Shooters’ Supply, Inc. We are not going bankrupt and we are not liquidating. The marketplace has changed such that we are no longer able to make a positive return on our investment.” 

In the US, it would seem that direct selling of manufacturers to retailers and fulfilment to consumers is helping cut out the role of the middle man. Despite this, if you have a product to launch in the US market, the least-risk and least-cost route remains selling via a distributor.

To get distribution to the large chains, you must recognise that each of the large gun retailers has sophisticated supplier stocking systems, with paperless interface a requirement of supply.

In today’s web-centric retailing, fulfilment of customer orders can also be called for, placing a further US-domestic warehousing requirement on suppliers.

There is also the need to have a US warranty and return/repair facility. Lastly, just the sheer logistical task in such a big country can be daunting without help. Distributors can assist with all of this, making the right introduction for services they don’t provide.

Shot shown

For those in the gun trade that are more interested in buying from the US than selling, the choice is wide and the products are brilliantly showcased at Shot Show.

However, as I mentioned last time, many of the famous US gun manufacturers have had to get through bankruptcy to survive, and certainly size would not seem to protect a company from this. In such circumstances, it would be wise to ensure that payment was only made against presentation of documents when the goods arrive in the UK. 

The US is the most financially sophisticated market for guns. The industry is full of regulation, financial investors/owners, volatility, and therefore risk. You need to do your homework to participate in this market. You need friends and knowledgeable partners if you are going to be successful.

More from Roger Williams

• Currency trends w/ Roger Williams
• Roger Williams explores trade sanctions
• Roger Williams explores benefits of trade deal with Switzerland
• Roger Williams on possible trade partnerships with the Netherlands
• Roger Williams on the rise of online retail