Releasing The Gun Industry From Operation Choke Point
The gun industry was riddled with uncertainties during the Obama administration, primarily due to an anti-firearm government and relentless gun control activism. As a result, financial institutions regarded gun trading as an extremely high-risk sector, whose participants had little chance of success. Banks either refused to offer merchants financial services or charged exorbitant rates and interests.
However, the unsupportive stance the government took against gun ownership seemed to fuel the industry even more. Because of constant fears that President Obama would restrict the purchasing and possession of firearms and ammunition, gun enthusiasts were seemingly stocking up their arsenal while they still had the chance. Consequently, gun dealerships continued to enjoy favorable demand levels and steady sales.
The 2016 election
The months leading up to last year’s ballot saw a significant surge in gun sales all over the country. The concern that many customers had was that a win by Hillary Clinton would lead to stricter gun laws. In anticipation for another Democrat administration, merchants stocked up on inventory, and manufacturers ramped up production.
But instead, Trump won. Suddenly, gun enthusiasts no longer felt the pressing urgency to own a firearm. Distributors were canceling orders in dozens because, for the first time in decades, Republicans now controlled the White House, the Senate and the House of Representatives.
According to research conducted by the Washington Post, FBI background checks decreased by 17 percent in the first quarter of 2017, compared to the same period last year.
The same figures were echoed by major gun stores and manufacturers. Vista Outdoor Inc. suffered a 28 percent plunge in profit while Olin, a conglomerate that manufactures ammunition, reported an 11 percent drop in sales for its Winchester Ammunition division.
Reduced “political sales” weighed heavily on an industry, which after eight years of prosperity, had become a victim of its success.
The current situation
We’re now halfway through 2017, and although some states are reportedly seeing a promising recovery in firearm sales, the situation remains largely unfavorable. Industry specialists are speculating a sustained contraction of the market, at least until the end of the third quarter.
In response, manufacturers and retailers are struggling to push their inventory out the door. Cabela, a major outdoor products distributor, is offering a 40 percent ammo discount for brands like American Eagle, PMC, and Winchester, while America Outdoor Brands (formerly Smith & Wesson) has a “buy four get one free” deal on its AR-15 rifles.
A shimmer of hope
Despite the current challenges, some believe that the industry is set to get back on its feet as we near the end of the year. Senator Joe Manchin reportedly gave the industry new hope by suggesting that Trump would be open to some forms of gun control.