Business Advisory

July 2005 Updates

Notice of the ATF restricting import of parts kits with functional assault rifle and or machinegun barrels is hitting the internet like a firestorm.   The rumors have been verified and are hotly trailed by news of new assault weapon bans being introduced at the national level in spite of a lack of any "blood running in the streets" incidents that were predicted by the gun prohibitionists in Congress.   The new high capacity magazine bans promise to be back with a vengeance and with further attempts to "close the loopholes" in the last ban.   Suppliers are rationing parts kits in order to smooth out the rush and keep them from being hogged up by a small number of well funded speculators.   Still, the smart money is in AK, Uzi and FAL parts kits right now as a short to mid term investment.   AR parts kits are likely to remain unaffected by the recent barrel ban.   

We have seen increased ATF surveillance of gun shows and the industry as a whole, but not the level of harassment that was common during the Clinton years.   Word has it they are prepping for the enforcement of the new laws that their "advisory comities" have passed on to their allies in the Congress and Senate.  Integration of gun owner registration databases with department of homeland security gives the potential for rapid and widespread sanctions to be taken against targeted gun owners if there is a significant regime change, but shortcomings in the sex offender registration databases are evidently getting a lot of notice in government circles.   

Ammo imports from Russia have apparently gotten sporadic.   This has caused Wolf brand AK ammo to rise significantly in price.   I have seen what used to be $80 per case at gun shows now going for $115 per case.   I think this has something to do with large quantities of the ammo being purchased by the new governments in Afghanistan and Iraq.   

FN appears to have yet again delayed release of the P90 semiauto rifles and is dragging their feet on the distribution of new non armor piercing 5.7 ammo in such a way that they are probably going to end up killing the entire concept of the .223 micro rounds actually reaching any significant market share.   

The gun market overall for June and July seems to be declining more than just the seasonal drop.   Handgun sales are down drastically and some of the manufacturers are running dealer incentives and rebates.  

Little is changing in the night vision business except that there is a batch of surplus PVS-14s hitting the market in modest numbers.  These are legit surplus rebuilt by ITT but sold at not much of a discount compared to brand new units.  

April 2005 Updates

Ok, as a suppliment to the various postings on the forums I have, here is a summary of what is happening these days:

Night Vision Business:

ITT and Northrop Grumman (Litton) are jacking their prices again.   They manufacture the intensifier tubes used in third generation night vision gear and this effectively drives the prices of the complete devices.  That situation on top of extreme demand from various government agencies is leaving the consumer shortchanged with having to pay higher prices for lower quality tubes in the devices being released for civilian sale.   Most night vision suppliers are no longer providing "tube sheets" with devices built with these new tubes because the performance on some aspect is an embarrassment.   They are still offering good warranties to counter the crapshoot that the market for used devices has become.   Many of the "dealers" in the business are offering products for sale that they do not have in stock and in some cases cannot even predict when they will be available.   Shoppers should take a realistic look at estimated delivery times and the reputation for sticking to those delivery schedules that any particular dealer or vendor might have. 

DEP of the Netherlands has partnered up with Photonis of France to produce some high quality 18mm intensifier tubes using their own innovative enhancements on Gen 2 technology.   Most of their tubes now give better performance than the early 1990s production Gen  tubes put out by ITT and Litton.   It has been predicted that DEP tubes will be used in the majority of high end night vision devices sold on the civilian market in the years to come.   

The market for used high grade night vision gear has become a total crapshoot.   Many of the used devices offer superior performance to what is being offered today, but then most are out of warranty and it becomes extremely difficult to determine what one is buying when purchasing a used device from an unkown seller.   Ebay is still full of absolute bargains and absolute ripoffs.  

Gun Business:

The traditional gun business has grown stale with tax return season sales being slower than expected in most parts of the US.    Manufacturers and importers are starting to offer some rebates and incentives to spike business in anticipation of slow summer sales.   Several manufacturers are coming out with proprietary new products and rifles in new calibers to stimulate the perception of new items on the market.  

With the constant threat of new assault weapon bans looming in the horizon is still dampening new development in gun designs for the paramilitary market but there is getting to be a little bit of a spillover from the military markets.    FN seems to be leading the way in that with the much anticipated release of civilian models of their P90 and FS2000.   Both guns are unique in their design because they are bullpup configurations that are fully ambidextrous.   Other companies are coming up with fairly radically "evolutionized" versions of the AR15 but they don't quite qualify as truly new weapon systems like the FNs.    Kel-Tec is introducing some of the much anticipated versions of their Sub-16 rifle which is a radical adaptation of the AR180 operating system.   

AR15 type rifles are now the largest volume fastest growing market segment of the gun industry in the USA.   This is due in no small part to the modularity and versatility of the weapon design and the tendency of veterans to purchase weapons similar to what they have recently used in armed conflict.   Given the growth in the US military and interests of the younger generation of shooters, I think this is more of a market trend than a temporary spike in interest in mid caliber assault rifles.   

Gear Business:

Awareness of the E-Jihad and integration of the online gun enthusiast community is reducing the frequency and severity of Internet related ripoffs of individuals but the E-Jihadists are still actively targeting businesses.   Several gun and gear related business owners and managers are reporting more sophisticated scams from overseas buyers using combinations of forged checks, stolen credit card data and other mechanisms of online theft.   These tactics are being used by the E-Jihadists to attack and isolate several businesses in the US which they perceive to be supporting of the US war efforts in Iraq and Afghanistan.   Now that some government intelligence and law enforcement agencies are becoming dimly aware of the threat and are starting to appear to act on it, many of the more common soft criminals are backing out of the scam attempts for fear of facing retaliatory action from counter terrorist efforts.   There are rumors circulating now of international vigilantes going after some of the more prevalent virus authors and online scam artists.   

October/ November 2004 updates

The Clinton ban of 1994 has expired and brought with it some renewed intrest in new production semi-auto rifles, but much has been significantly more tame than gun market watchers had anticipated.   Rather than sudden price changes on the deadline of the ban, sellers tended to wait and see what the effect would be and did not adjust prices.    There was so much going on with stockpiles of preban magazines and clandestine manufactuer and smuggling of high capacity magazines without the "law enforcement use only" markings on the market that prices changed very little when the ban ended.   There has been a short influx of restricted marked high capacity pistol magazines on the market that has made it tough to tell if the prices of some of the quality magazines for high quality duty grade pistols will go up, down or stay the same.    A lot of people think that if the ban stays gone, the "law enforcement" marked magazines will have some collector / curiosity value as time goes on and there was a lot of money made by dealers who stockpiled those magazines when they were dirt cheap during the ban and then will sell them for a collector's premium after the ban.   Even more valuable will be those made for the overseas market that are marked export only or not for sale to USA like we have seen with some Glock magazines. 

Nobody dares speculate on exactly when the bans will come back, but most gun collectors figure it will happen.   Manufacturers are being swamped with new orders for "preban configuration" guns.   If the bans of 1986, 1989 and 1994 are any indicator, then the smart money will be invested in two general directions.   First are the bottom grade guns that would be targeted by the ban.   In the older bans, that was the MAC type guns like the Mac-11 which doubled in price fairly quickly and then started going up from there.    Basic cheapo AKs did the same thing.    ARs seemed to go up, but on an investment percentage, the smart investment money goes into lower receiver assemblies and not complete guns.     HK rifles and Steyr AUGs at the time of the 1989 ban were not particularly "high end" compared to what else was on the market at the time and the increase in value through the 1990s was largely speculative.    Still, it shows the investment money did well to focus on what is percieved to be guns that are using the best technology and innovations at the time which are likely to remain current for a long time.    I think the current situation is no different except that the sellers have figured out the game and are pricing their stuff accordingly.   

 

November 2003 Updates:

What's going on.  

Very little of substance is going on in the gun and gear markets now in the early stages of the holiday season.   Shops and gun show vendors are reporting a tepid increase in sales.  While they are not encountering gun owners desperate to cash in prized collections to buy toys for the kids, they are also not encountering a significant increase in new buyers either.    Manufacturers and importers are holding off on new models, although the rumor mills are running strong in anticipation of the sunset of the AW ban next year.   Most observers are optimistic that it will end, but point out that it will not return to the "normal" of the true preban years of the late 1980s.   Many manufacturers and importers did not survive the double whammy of the ending Cold War and the import bans of 1989.   This means many guns like the Galil and HK-91/3/93 may never be imported again.   The Steyr Aug SA is likely permanently out of production.   We will, however, likely see a rapid availability and reduction in price for original factory high capacity magazines for several popular handguns like the Glock, Beretta, HK, and Ruger.   Prices for military surplus rifle magazines are not likely to change significantly.  

Judge Alex Kosinski of the 9th District Circuit court of appeals made his payback for an earlier court majority ruling which denied the right to keep and bear arms as an individual right.   In US v Stewart, the Kosinski's court ruled that home built machineguns were not in the federal jurisdiction if they did not enter into interstate commerce.   The decision was a surprise to the general public, but apparently not a surprise to the insiders.  In fact, it goes to explain some of the behavior of the feds over the last six months and indicates that they probably had a fairly reliable prediction as to how the ruling would go.   While Bob Stewart will likely not serve prison time for the original charges of manufacturing and possessing machineguns without federal license, it is likely he will be doing a considerable sentence for the alleged attempt to hire a contract killer to kill the lower court judge who had originally convicted him.   The centerpiece of the government's case against Stewart now surrounds the testimony of a jailhouse informant who was Stewart's cellmate while in federal custody.  

The growing number of tactical and field gear designers and manufacturers is telling of a virtual renaissance in field gear and tactical equipment as a byproduct of the war in Iraq and the war on terrorism.   Companies like Blackhawk are expanding operations in several countries while recent studies are showing that the average US troop heading overseas is doing so with an average of $300 worth of gear privately purchased by himself or family members.   Not surprisingly, most military commanders still forbid troops from taking privately owned firearms to war, but understandably, they are getting pretty lax on knives.   Switchblades are now openly sold in several US states, including California.  

 

 

 

 

A quick addendum for August.   It seems that the rumors of an ATF "recall" on PPSH-41 submachinegun parts kits is a reality.   I had my doubts about the rumors at first because I had purchased a couple of the kits in 2002 with little fanfare and no knocks on the door from the feds.   The kits I got from the company in question, Inter Ordnance, were obviously pretty butchered up with a blowtorch.   Apparently, however, not all customers were getting the same kits.   Some smart cookie at Inter Ordnance was allegedly giving some less than demilitarized kits to favored customers.   The apparent story on the part of the owner of the company was that someone just got lazy and did not cut the guns up enough.   The most serious of allegations involve the ATF apparently looking for people who had dealt directly with the owner of the company and were instructed on how to rebuild the guns.   It is unclear even how much the ATF has regarded the credibility of these allegations, which may have actually originated with a business rival of the company owner.   The ATF representative told me that the issue was that one of the agents was able to make a functional gun out of one of the parts kits by simply securing the trunion in place on the lower receiver and running the gun "open top" while this sort of "rebuild" was of questionable safety or durability, it was according to them, functional.   So functional in fact, that the new ATF determination is that a PPSH-41 trunion alone constitutes a "receiver"  and anyone who has a "functional" trunion needs to give it up.   This is not a recall or confiscation on the entire parts kits, which used to retail for around $100 to $150, but just that one section.   In theory, you may also cut the trunion in half with a blowtorch, and send it in to the ATF with a note that you want it returned once they determine and verify that it has been cut.   What the ATF people are asking for is the owners of these parts kits to simply mail the trunions in to the regional ATF offices via some sort of certified or registered mail.   You can usually find their number in the phone book and make the arrangements over the phone.   That said, the consider the phone contact and verified communication with you about the matter to be "fair warning" about the recall.    If you have a trunion and don't give it up, and they find you with one later down the road, they say they will retain the right to prosecute.   Same deal if you have a functional PPSH-41 that is not registered, and had claimed your trunion was sold or lost in the recall.  Well no shit, I always did figure that being caught by the feds with an unregistered machinegun might make them a little cranky.   

What is unclear at this point is the status of the demil and dummy guns that were built up from parts kits and had trunions with bolts and fake (solid) barrels welded in place.   My take on it is that if the welding was done to the extent that I welded them or have seen the other demil makers weld them, it is a non-issue, but if you have one of the dummy guns, be aware that the ATF people are not doing the door bashing thing over it, they simply want to verify that the trunion in its present form is not usable in a gun.   This might involve them having to take possession of the dummy gun to have their tech branch determine this, but in theory, you would get your dummy gun back in around two months.   Note, also in theory, some dickhead could declare that it is a gun and decide to have charges filed against you.   Note, that most states have their own laws about this, and a properly demilled gun will be compliant with state laws anyway.   Also note that this determination was made by ATF AFTER they were well aware of how and where the parts kits were cut up.    I had displayed one such parts kit in the front window of a gun shop for several months and posted pictures of it both on this site and on ebay in full public view in 2002, and did not hear a single peep from the ATF.   Furthermore, they did not contact me until a full year after I had purchased the parts kits and several months after I had sold the dummy gun (still listed in the sales index because I thought I could still get parts kits to make more).    The other parts kit had sold over the counter at a gun show that was well attended by law enforcement, and for all I know, the buyer was a cop anyway.   Now, Inter Ordnance apparently does not sell the parts kits any more with or without a trunion, and any such parts kits that are floating around these days are probably going for quite a premium in the underground.  

What is a little bit disturbing about this situation is that Inter Ordnance apparently gave up a relatively old customer transaction list.   Even more so, what were they even keeping that information around for?   If it takes at most 60 days to verify that a credit card transaction is valid or a shipment was lost or not lost, what gives with keeping records that are a year old?   The parts kits are supposed to specifically be non-regulated items, but apparently a number of these companies are keeping detailed lists of who buys them and when.   I did a little research on this and found out that it was a similar situation with a company called Cole's Distributing that had imported a bunch of Uzi parts kits in 2001.   There are also some more questions being raised about the FAL kits that were confiscated from a warehouse in Washington state, but apparently most of the kits that company had were unsold at the time of the seizure.   

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