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The Second Amendment has made the United States the world's largest firearms market. While gun ownership in every other country is a licensed privilege, in America, it's a constitutional right. That distinction makes the US the only nation in the world with more guns than people and the undisputed leader in civilian gun ownership. Americans don't just buy one firearm for life. They collect millions every year. Civilian spending on guns surpasses even what the US military spends on its troops, an astonishing benchmark for the most heavily funded, globally deployed army on the planet. In the simplest terms, the American civilian market is the most coveted and lucrative prize for gun
manufacturers and dealers anywhere. Even as state and federal regulations tighten, the US remains by global standards the most accessible consumer firearms market, where purchases are the most frequent, markups are the highest, and margins are the richest. Any gun maker that captures a fraction of this market earns more than they would from any government, military, or law enforcement contract. But the gun business is unlike any other. The retail side is ruled by old-school relationships and word of mouth. There's no data, standardized benchmarks, rating aggregators, price trackers, and little literature from even the manufacturers themselves. The information that does exist is anecdotal and scattered across
niche forums, publications, and YouTube videos. With tens of thousands of different models offered in various configurations, trims, and calibers, pricing is opaque, and knowledge is fragmented. Buying guns is a lot like buying sneakers, watches, or Pokémon cards. Purchases are driven more by perception than performance, and the business is fueled by information arbitrage over hard data. Every firearm is like a stock, which goes up or down based on supply and demand for that specific model. In this low-information industry, successful dealers and stores must wield their intuition, knowledge, and relationships to predict and stock what customers will want to buy. The reality is that the information gap
begins upstream. Retail is just where it shows up. Manufacturing is globally fragmented and shaped more by politics than logic. There are popular guns, but no single design, standard, spec, or manufacturer rules the world. Even though most of the money is in retail, innovation is driven by the military, the main application for guns around the world. Every major power develops an arsenal for its armed forces. It's not just the US, as long-standing allies like Israel, the UK, and South Korea build their own firearms. Neutral nations such as Switzerland, island powers like Japan, and even struggling economies like Italy or Mexico maintain domestic firearms production. And within
NATO, the world's largest military alliance, most members prefer their own designs. For any country, domestic gun production eliminates dependence on foreign suppliers, optimizes weapons for local combat, keeps sensitive information inside borders, and provides leverage in foreign policy. As a result, the industry is tightly bound to politics. Manufacturers can't pursue profit over state, as exports require government approval from both sides. In some countries, that makes firearms a low-margin and low-volume business. In Singapore, gun-making only survives as an arm of the state. The island's military is its only customer, and the government has only allowed exports to
remote, non-aligned countries like Botswana or Peru, far removed from any major West-East flashpoints or war zones. In contrast, the gun business is surging in Japan. Lawmakers have invested larger sums into the military, despite the sluggish economy and the country's post-war pacifism. Howa's business has grown with new rifle contracts for the Japanese armed forces. Yet their growth is capped. Japan permits Howa to export sporting rifles to the US, but bans foreign sales of their military-grade firearms. Meanwhile, in South Korea, the industry is booming thanks to a president intent on making the country a top-four global exporter. Korean gun makers are encouraged to sell to governments and US civilians. In short, politics determines
what gets made, how much goes out the door, and where it ends up. And the same dynamic plays out in the American civilian market. The US government decides which foreign manufacturers get to sell here, and the logic is more political than economic. The major players today are gun makers based in NATO member nations or major US allies, while those from adversaries like China and Russia have been shut out. Yet before their respective bans in the 1990s and 2010s, Chinese and Russian manufacturers dominated as leading suppliers of AK rifles to American civilians. In short, US policy determines who gets to participate in this market. Ultimately, companies who do get to sell to American civilians grow significantly more than those who don't. The highest-grossing
manufacturers in the world, Italy's Beretta, Austria's Glock, and Germany's HK, each reap 30 to 90% of their sales every year from American civilians. So even though governments are the main driver and customer for firearms, the money is really in the American public. For gun makers, government contracts deliver nominally large payouts. Deals worth hundreds of millions, sometimes billions, spread over multiple years get awarded with the stroke of a pen. They provide steady cash flow and prestige, but competition is fierce. With so few armies and law enforcement agencies, procurement is slow and complex. Gun makers compete with each other not just on performance, but also on price,
production, and support. With field tests and bureaucracy, it can be years before a bid is selected. But while government contracts are winner-take-all contests decided on function and value, the civilian market is the opposite. Accuracy and utility ultimately take a backseat to brand, aesthetics, perception, and the feeling of how a gun shoots. The market value of every gun rises and falls based on changes in supply and demand for that specific model. Pre-ban Chinese and Russian AK rifles have tripled in value over the past decade for their craftsmanship, authenticity, and scarcity. Civilians willingly pay a premium for Polytech, Norinco, and Molot rifles, as it's unlikely their manufacturers will ever
get to re-enter the US market. But if you don't want to splurge, a better option will be the cheaper Serbian Zastava M70 or Romanian WASR-10. Since these countries can import in these models every year with no restrictions, high supply means less appreciation, even though they're all fundamentally the same rifle. The AK is just one example of how every type of gun is a market in itself, vulnerable to booms or crazy crashes based on changes in supply and demand. Guns are like any other consumer commodity. There's one group of budget-conscious customers, another that spares no expense collecting rare or luxury models, and the rest of the market that settles in between these two extremes. And manufacturers exist along
this spectrum. While gun ownership is a right in the United States, gun promotion is not. Every major publication, cable network, social media platform, and search engine bans gun ads and restricts gun content. Gun manufacturers and stores can't advertise on TV, Facebook, or in the newspaper. Unlike sneakers or Pokémon, where sales trackers, aggregators, and marketplaces help narrow down the information gap for sellers and buyers, no comparable infrastructure exists for firearms. GunBroker, the industry's equivalent of an eBay and Craigslist, offers no data, even in its paid reports. Credit card processors and point-of-sale systems refuse to release transaction data out of fear of lawsuits and optics. With
high liability, deplatforming risk, and little reward, there is no incentive for anyone to close this information gap. That leaves the average American with one option: their local gun store. For generations, brick-and-mortar dealers have filled the knowledge gap between manufacturers and consumers. Insulated from the internet, gun stores uniquely possess the knowledge and inventory across brands and provide education to civilians that no single gun maker ever would. It's a market unlike any other in the world, where a VC-backed startup or corporate entity can't muscle in and carve up competitors with cash the way they can in other industries. With the blanket ban on marketing and the
generational suppression of information, word of mouth and relationships are the only path to success for gun stores. In this Modern MBA original, we go boots on the ground with one of the largest gun dealers in the nation, Mr. Guns, who owns four stores across Dallas and Zero Whiskey Tactical Arms in Austin, an emerging high-end gun shop that was once the second highest seller of Barrett.50 caliber rifles in the state. What does the future hold in business? Ask nine experts and you'll get 10 answers. Turn on any news channel and you'll see talking heads pounding the table proclaiming it's a bull market today, only to call it bearish the next.
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opportunities. Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com/modernmba. The guide is free to you at netsuite.com/modernmba. The modern American civilian gun market has been shaped by four paradigm shifts that permanently altered supply, demand, and gun culture. The first was the 1986 Fire Arms Owners Protection Act, which divided civilian semi-automatics and military automatics for the first time. Before FOPA, civilians could legally buy and shoot fully automatic machine guns that fired continuously with one trigger pull. After the bill passed, any new civilian firearm manufactured or
imported into the US had to be a semi-automatic, requiring a trigger pull for every round. But, the government could not retroactively confiscate the 180,000 machine guns already registered. Those grandfathered firearms decades later remain the only machine guns an American can legally own, and in turn have become a hyper-inflated market. A single one of these guns today retails for five to six figures, and since no replacements will ever exist, they enjoy incredible appreciation. The second paradigm shift was the 1989 import ban on assault weapons, prompted by a mass shooting that involved a Chinese AK-47.
The American gun market at this point was flooded with AKs, FALs, and G3s from Europe, China, and Russia that were much cheaper than any American-made rifle. Under President George H.W. Bush, imports of these military-styled rifles were banned as inappropriate for civilian use. Americans simply turned back to Colt and other domestic manufacturers to fill their demand, turning the AR-15 into the default rifle, a standard that endures to this day. The third was the 1994 assault weapons ban under President Bill Clinton. A 10-year ban on new imports and domestic production for certain semi-automatic firearms and magazines holding more than 10 rounds. Just like
with pre-1986 machine guns, any pre-1994 firearms and 30-round magazines exploded in value. Yet, this legislation ultimately backfired. After the ban was lifted in 2004, Americans channeled their pent-up demand into mass AR-15 adoption. It also conditioned gun manufacturers and gun owners to associate politics with scarcity, where any hint of gun control triggers panic buying and stockpiling. The fourth paradigm shift was in 2012 with the Sandy Hook shooting, which involved an AR-15. The tragedy sparked the strongest legislative push for gun control since the 1994 ban. But, within the industry, it set off mass panic buying and an unprecedented rush to gun ownership.
Demand soared and prices skyrocketed overnight for every firearm, with AR-15s seeing the greatest appreciation. It was right before this moment when Mr. Guns launched. Roe grew up around firearms in Louisiana, worked a day job in electronics, and sold guns out of his house part-time to make ends meet. His online business exploded after Sandy Hook as Americans bought his AR-15s by the truckload, bidding three times their usual price at auction. By 2013, his house was so full of inventory that he opened a storefront. 13 years later, Mr. Guns is Dallas's leading gun store with four locations, and is one of the largest online dealers in the nation.
Even as he scaled, Roe has never lost sight of the core value prop for a successful gun store. There's an old adage in the gun industry that you don't want your store to be stale, pale, and male. And I guess that means you're going to make it a welcoming environment for everybody, especially in a town like we're in here in North Dallas. We have a lot of first-generation Americans, we have a lot of people that are different ethnicities and things like that. So, we have to be really conscious about providing an inviting space for everybody. A lot of times a gun shop can be an intimidating place for a lot of people that aren't, call them, traditional gun shop folks. How are you going to compete with the guys that have much better pricing and that sort of
thing? In my opinion, you must have good customer service. However, if that's everyone's value's proposition, it's no one's value proposition. Firearms fall into three basic categories: handguns, rifles, and shotguns. Americans tend to buy handguns first, followed by rifles, then shotguns. Handguns are cheaper, easier to store, lighter to carry, and most often used for self-defense, which is the primary self-cited driver of gun ownership. When you start shopping, the options are overwhelming. When we look at the biggest brands, SIG lists 25 models across 12 series, Glock 21 models across seven series, Smith & Wesson 29
models across 17 series, Ruger 29 models across 16 series, and Taurus 20 models across 11 series. If we pivot to revolvers, the choices are just as broad. Smith & Wesson sells 46 different revolvers across nine series, Ruger sells 30 across 13, and Taurus 25 across six series. Navigating this landscape of brands and models is where the gun stores prove their value. They help buyers narrow down their choices based on budget, use case, ergonomics, goals, and shooting experience. In some ways, the gun store is like a mattress store. You get to try before you buy, and you rely on the staff to help narrow the field. If a person comes in and says, "What should I buy for my first handgun?" The
question is, "What are you using it for?" So, we're able to narrow down if they're looking for a gun to carry on their person, or a gun to have in their nightstand, or just a gun to take down to the range and shoot. So, we're able to kind of narrow down based on their requirements what they're after. And then, of course, budget-based, we're able to a lot of times help them optimize what they're getting for their dollar. So, while they may find that there's 10 in a given price range, we may be able to narrow it down to one or two by saying, "Well, look, you know, these are the features that are a lot better." It helps those guys really filter through the noise and help them understand what they are really interested in. But, 15 or 20% of the
customer base is going to be a collector that has numerous firearms. They go to a lot of the functions or gun shows, and they spend a lot of time looking at guns because they're a real hobbyist. You know, an analog part of the world would be a guy that has a really nice sports car that he keeps tuned up. But, a much larger percentage are going to own a couple of guns or one gun, and that's going to be the vast majority of the customers. And they're coming in for information because they need to know, "What is this really good gun for my application?" Because the American civilian market is so lucrative, gun makers pursue nearly every price point.
Brazil's Taurus grosses hundreds of millions of dollars every year selling budget revolvers and handguns at the sub-$500 mark. These guns are cheap and have zero chance of appreciation. In the middle are Glock and SIG, who sell the most ubiquitous handguns today. Both manufacturers optimize for volume over margins with base prices that have persisted at the $500 price point for decades. Like a Honda Accord or Toyota Prius, their widespread availability, abundant supply, and mass demand mean no appreciation. But, in retail, perception drives demand, which in turn drives prices. Gun makers with models ingrained in pop culture generally enjoy greater pricing power as customers are willing
to pay more for the prestige and cool factor. While guns can't be advertised online or on TV, gun makers have still found ways to engage in indirect mass marketing through placement in movies, video games, and shows. And now, progressively through YouTube gun influencers who walk the line between education and promotion. This analysis focuses on estimated average retail prices per year for standard base models, unless noted otherwise. Even our own numbers are anchor estimates, derived from the limited data that is available. Smith & Wesson revolvers were standard issue for American police in the last century, and made famous by the film Dirty Harry and old-school Hong Kong cinema. This real-world prestige has enabled the brand continuous pricing
power for its flagship models in the upper mid segment of the market. The Colt Python commands high prices, immortalized over generations through movies, video games, and iconic shows like The Walking Dead. Yet, the Python is a prime example of how market values can diverge sharply by model, where something as subtle as production year can dramatically shape demand. New-in-box vintage Pythons made through the '90s retail for around $3,800 today, up 300% over the past 14 years. But, when Colt decided to restart production in 2020 and modernize the iconic revolver with better material,
more steel, and reworked internals, one might expect demand to shift to the remakes with their higher supply and superior quality. But, instead, vintage Pythons have only continued to appreciate as collectors double down on their authenticity and scarcity. Prices for new production Pythons have fallen, and they regularly sell below MSRP. Even though they're the same gun with identical performance, it's a demonstration of the irrationality and unpredictability that exists within the civilian market. Dealers or stores who bet heavily on the remake are likely sitting on dead inventory today. The Beretta 92F shot to prominence in the 1980s after winning the US Army contract
to become the standard issue sidearm for soldiers. That military prestige was quickly amplified by features in action flicks like Lethal Weapon and Die Hard. Decades later, the M9 still holds a slight premium over SIGs and Glocks as an '80s classic in the middle of the market, but its relevance is fading as the US military has moved on to newer handguns. With its last real pop culture moments being The Expendables and Call of Duty's in the early 2010s. The Walther PPK, famous for being 007's sidearm of choice, is in a similar boat.
Its outdated design makes it niche, but it still commands a premium above bread-and-butter Glocks and SIGs. On the other hand, some guns that never secured military contracts, like the HK USP45, command prices in the upper middle of the market backed by reoccurring pop culture appearances, real-world performance, and high customer satisfaction. The same is true for the Colt 1911, the classic sidearm featured in countless war movies and video games. All these models boast mainstream recognition through military pedigree and or pop culture, which helped them stand out to retail customers. This distinction and demand has enabled every manufacturer to continually raise prices
on these guns over the decades. And with ample supply, secondary appreciation is nonexistent. The high-end market is led by small boutique gun makers or legendary models with limited production. Most manufacturers at this level constrain production to hundreds a year to keep demand high and supply low, which fundamentally drives their appreciation and top-of-market positioning. Taran Tactical turned Hollywood glory into premium pricing with guns tied to the biggest modern-day action hero, John Wick. The Combat Master and Pit Viper were the characters' pistols of choice in the third and fourth installation of the franchise, with both models currently retailing for over $7,000.
The association with a blockbuster hero and engineered scarcity is what's kept both models at the tip of the market, even years after their film debuts. Nighthawk Custom goes even further, with each 1911 manually built end-to-end by one gunsmith. They market their guns similarly to Patek Philippe watches, Hermès handbags, and other luxury goods. Manual labor leads to low supply, which results in year-long waitlists and resale prices that reach hundreds or thousands above MSRP. But rarity and craftsmanship alone is sometimes not enough. The Korth Combat, referred to as
the German Rolex of revolvers, built its reputation in the 1980s amongst wealthy Europeans, hand-built with only hundreds made annually. But while new production Combats today still go on average for $4,600, by historical measure they've been depreciating in the US market. Without the Hollywood spotlight or military degree, Korth's German engineering and heritage is arguably too niche for the US, especially when stacked up against the cheaper vintage Python. But that hasn't stopped Korth as a manufacturer from trying to align with modern American trends. Their latest is an $84,000 limited edition Bitcoin revolver engraved in 24-karat gold, with only 20 ever imported into the US. Luxury goods
thrive on aesthetics, impracticality, and scarcity, and the Bitcoin revolver is an application of these same principles in gun form. Competition pedigree also drives demand. The CZ Shadow 2, released in 2016, took the market by storm, edging out SIGs, Glocks, and Berettas for national champions and grandmasters competing in run-and-gun shooting contests. Its distinct blue grip gives it easy recognizability and has enabled the Shadow 2 to stand out in retail cases just as much as on the firing line. Then there are high-end meme guns like the Desert Eagle that serve no practical purpose, but have achieved cult status
through video games and films as the ultimate hand cannon. While the base model has barely budged in the past 14 years, variants like the titanium gold and gold tiger stripe have risen 45 to 60% over the past decade. A Trump-branded edition, despite launching at triple the base price, has already appreciated by $1,000 on the secondary market in less than a year. There's no rational explanation except that demand outpaces supply and that they look different. These are just a few brands and models that we've cherry-picked from one category of firearms. They were chosen to contextualize just how vast the landscape is for handguns, the overwhelming number of options at every price point, and the various factors that can drive differentiation,
prices, demand, and supply on a per model basis. Ultimately, it's all down to individual taste. This makes a gun store no different than any retail business where local adaptation is critical to success. There's no sense in stocking $5,000 Nighthawks in a working-class neighborhood or exclusively carrying Glocks or Taurus in an affluent neighborhood. Mr. Guns in design and inventory is a reflection of what people in Dallas want. Majority of our customers, they're primarily urban people. So, it's unlikely, relatively speaking, that they grew up hunting. So, their type of shooting is going to be going to an indoor range, shooting handguns. If you were to try to open an indoor range in rural North Louisiana,
you would be a lot less likely to be successful because everybody's grandmother has land. There's readily available inexpensive hunting leases. Those folks are all able to afford to have a nice place to shoot outside. They grew up shooting outside. They have the highest concentration of sportsmen of just about any region I've ever seen, and I grew up there. You're going to do a lot better selling products that are outdoor focused, a lot more soft goods, boots, and camouflage, and things like that. Why would anybody in Dallas buy a camouflage coat, for example, other than for fashion reasons? There's nobody
that's spending a lot of time in the cold woods. And there are hunters here, certainly, but the product mix would be a lot different. You would sell a lot more hunting rifles and shotguns in an area like that versus in Dallas. I don't sell those very well at all. In my indoor range, I couldn't sell a deer stand if I wanted to. When you're in an area like Dallas where it's difficult to get access to large swaths of open land, you're not going to sell longer distance firearms. Whereas, if a person lived in Midland, Texas, where there's just miles and miles of open desert, or in states like Colorado where there's a whole lot of government land, that is a lot more conducive to certain types of product
like, you know,.50 caliber rifles and things like that people are going to shoot long distances. If you look at vacation areas where they are have, say, small populations of locals but large populations of visitors, there's some models that are more of an experiential type models. So, machine gun shooting, those types of things work a lot better in an area like that because you have customers that are not going to be buying firearms and taking them home with them, but they will come out and spend money someplace that like Las Vegas. Those types of business models do great.
The guns and brands that interest one individual have a lot to do with the generation they were born in, the part of the country they live in, and or the video games and movies they enjoyed most. Maybe you grew up playing Counter-Strike or Rainbow Six, so you have a soft spot for AK-47s, Desert Eagles, USPs, MP5s, and SPAS-12s. Maybe you're a military history buff and you place greater value on manufacturers who have battle-tested models like HK, Colt, or FN over those who build solely for civilian use. Maybe you grew up hunting, so your taste lean more towards practical shotguns, bolt-action rifles, and sporting rifles. Or maybe you just don't care about any of these things and just want a one-and-done that's reliable
and cost-efficient. With so many different entry points and possibilities, the industry abstracts customers into three types. The first are tactical Timmys whose tastes are driven by law enforcement and the modern military. This is the younger generation, in their 20s to 30s, raised on Call of Duty, Battlefield, Black Hawk Down, Sicario, and other titles that popularized the tactical special forces operator. They chase after the same rifles and handguns used by Navy SEALs, trick out their collection with all the optics, lasers, suppressors, and wear ballistic helmets, plate carriers, and night vision. The second is Elmer Fudds.
They're an older, traditional generation who believe guns are for hunting and have little interest in Glocks, SIGs, AR-15s, and modern firearms. They favor old-school bolt-action rifles, revolvers, and shotguns. While the Fudds may not have as strong of an online presence as the Timmys, they're still big. There are many old-world manufacturers who have thrived exclusively catering to this market, like the $100,000 H & H Royal double rifle that's engraved by hand, produced in dozens per year, and boasts waiting lists that stretch up to 3 years. The last group are the boomers. Shaped by World War II lore and Westerns, their tastes lean more towards 1911s, M1 Garands, lever-action rifles, and
revolvers, and they have less enthusiasm for modern plastic-based firearms. Understanding these archetypes and how they desire certain models or trims helps us understand demand in the abstract. Row has come a long way from the days where he handled every deal and spoke to every customer. His breakthrough came from building a strong team. By surrounding himself with talent, he's freed himself to focus on strategy and scale. But finding great people isn't easy. That's why ZipRecruiter, the sponsor of today's episode, makes such a difference. Hiring is the most important decision any leader makes. But finding a qualified candidate is like finding a needle in a haystack. You'll get hundreds of
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ZipRecruiter, the smartest way to hire. The more practical but harder question to answer for dealers is which guns to stock. With tens of thousands of options across every category, no one has the budget or space to carry a little bit of everything. Manufacturers only care about moving their products. They lean into pop culture, competition pedigree, or military adoption whenever possible just to stand out to retail customers. But gun stores carry all the risk. Their success and ultimately survival relies not just on sharing knowledge with customers, but on choosing the right inventory and moving all of it across multiple brands and models.
I think that you're spot-on. I think it's worth about 350 retail. So, we pay about 60 cents on the dollar for these. So, that would be uh 360, 180, 190. About 210. Maybe 210, 220. I can do 210. You'll do that? All right. It's a very commoditized business. And so, there's a lot of price information on the internet. Everybody knows what everything sells for. So, there's not a lot of opportunity there for really broad margins. We have extremely narrow margins on new product. So, as a result, you have to move volume. And so, that's what we discuss with our new employees. We'll ask them, "What do we do here?" And they'll inevitably say
that we sell guns. And the answer is "No, they We move as much inventory as possible as fast as we can." In order to do that, you have to keep your prices low. You have to try to move things quickly. If you look at a business like Neiman Marcus or you look at a business like Walmart, you might think that Neiman Marcus is prestigious, let's say, but if you look at their numbers, Walmart destroys them every time, and they do it being like a vacuum cleaner sucking up nickels. They're out there making little bits of money a whole lot of times, rather than making one large hit on some sort of a luxury product. And in the gun business, that is definitely the case. You have a fixed amount of dollars that you can allocate
to purchase inventory with, and allocating your dollars to big-ticket items in a lot of cases doesn't make nearly as much sense as allocating your dollars to things that move quickly. Demand is to a lesser degree driven by supply. Much more recent example would be that HK released the VP9 A1. So, if you know, you had gone in and bought 25 VP9s 2 weeks before they released it, you're going to have a real problem because people want the new model. Those are in very limited supply right now. So, people, if you look online, people are paying almost double retail for what will inevitably, a year from now, just kind of be a common gun because it'll have come into supply and the prices will have fallen. I mean, I'm
not an oracle, but I suspect that's the case. If you look back, that's exactly how it worked with guns like the XDS. The XDS 45, when that thing came out, it would have been probably 2012, 2013, something like that. Those things were so hot that they were selling for two and three times what you could get them for, what retail should be. And now, you almost can't give one away. So, those tastes definitely change in the industry. And I think, especially if you're going to be a multi-store type business, in our case, we can't just buy one of something. We have four locations, so you have to be pretty confident that particular item's going to do well. You do that through understanding historical sales in your
own business, uh kind of having a little bit of intuition as to what you think is going to happen. I mean, a lot of this stuff's a guess uh to a large part. With historical data, it's easy to look back and rationalize why certain model rose or fell in value. But owners like Rowe are in the business of skating to where the puck is going. In retail, cash flow is king. Appreciation is never guaranteed. While manufacturers may watch the secondary market, their main priority is in the primary market with bulk sales to governments, distributors, and gun stores. Like Nike with sneakers or automakers with dealerships, gunmakers aren't interested in secondary appreciation as they don't benefit from
it. Their priority is wholesale volume at the highest markups while providing guidance on retail prices with MSRP and MAP, which gun stores can choose to follow or not based on real demand. In this way, the gun industry's low-information environment affects sellers like Mr. Guns just as much as buyers. And Rowe reads every possible signal to predict demand. Legislatively speaking, there is a very good chance that in Trump's big beautiful bill, that what they call the Hearing Protection Act is going to pass. And if that's the case, it's going to take silencers off of the National Firearms Act, and they're going to become like any other serialized item. And it's going to turn it into a single-day
simple transaction versus something that can take weeks or months now. And it's going to increase demand dramatically, and it's going to change it for guys like us, too, cuz we'll be able to sell them really quickly. And it'll change how we stock them. It'll It'll change a lot. The rationale and timing behind a gunmaker's decision to discontinue, refresh, ramp up, or upgrade a model is never public. Yet, upstream supply changes dramatically affect downstream demand and market value. Gun stores and dealers rely on intuition, relationships, and past experience to decide what and how much to stock. Any gun that sits for months must usually be discounted unless the owner is willing
to wait it out for the right buyer to magically Gold Deagles or Bob Hawks might look like safe bets as models with limited supply, loyal followings, and a history of proven appreciation. But if Magnum or Nighthawk suddenly ramps up production or introduces an even flashier, rarer model, demand will fall along with the tens of thousands of dollars sunk into this inventory. Guns are ultimately zero-sum. Customers rarely stockpile identical models. If a customer comes in for a Colt Python and you don't have one, that sale is gone and probably that customer, too. For Rowe, customer service isn't just lip service and something that applies only to new models. Mr. Guns offers the highest payouts for used guns in all of Dallas.
Upfront quotes and transparent, consistent pricing is something that most other gun shops in town don't offer. But the industry's opacity and high liability has fostered a culture where relationships matter more than transactions. Reputation opens doors. With criminals eager to buy in bulk and intense regulatory the industry collectively prioritizes social capital and personal endorsements over hard cash or rapid expansion. Gun store owners must provide references, sales reports, and compliance records to get wholesale inventory. Beyond that, endorsements from respected peers unlock exclusive allocations and privileged information that would otherwise remain off-limits.
All right. So, what we do is we look at GunBroker currently, and we see what the like model is going for used retail. Then, based on that, we do a 60% or 60 cents on the dollar. Um we pay in check or store You can go down the road anytime you want to some other guy, right? You've got the big-box players, the guys like Bass Pro, Cabela's, Academy, those sorts of folks. And I don't know a lot of people that just like the sort of anonymous counter experience with random employee, right? So, they'll come into your store, they'll form a relationship with your guys, and it almost becomes kind of a club to where everybody is That's where they feel welcome. It's
their gun home, so to speak. And if you're able to provide the prices and provide the inventory that people want, that's one aspect of it. The other aspect is the relationships on the backside for the dealer themselves are very important with the manufacturers. And once you reach a certain level, you're going to have a representative for each brand. So, having relationships with those guys so that you can kind of get the good stuff when other people are not able to or they call you when the best deals are out that may be limited or even just providing you with really good support from the brand itself.
Despite a strong retail footprint, Mr. Guns ranks among the top 100 US dealers by online volume. 30% of Rowe's business comes from used guns sourced from walk-ins looking for quick cash. This steady pipeline of inventory is inspected, photographed, priced, and shipped at all hours, which keeps staff productive even when foot traffic slows. Mr. Guns grosses $80,000 on average a month for each of its two retail locations and $150,000 a month for each of its two gun range stores for combined annual run rate of $7.4 million a year. The used gun business is as much about efficiency as profit. Like sneakers, used guns deliver stronger margins and operate in their own market insulated from the irrational, unpredictable
swings in supply and demand that plagued new models. New guns are low floor, high ceiling, while used guns are high floor, no ceiling. They don't appreciate, but their values are far more stable. Rose's operating margin sits at 8%, and he believes he can get to 10% through better product mix and new services. If Mr. Guns is built on scale, Zero Whiskey Tactical is built on exclusivity. You want to stop by? In the morning, that's when I'm probably less busy. Less busy? Okay. Beast in Austin, owner Z, has carved out a high-end niche by curating and sourcing rare and premium firearms. My employees are also my customers as well.
He bought this, shot 100 rounds, and uh he traded it in for a Staccato C2. Very cool. Yeah. But it's nice, comes with three mags as well. It's pretty sighted at 100. Even though Mr. Guns and Zero Whiskey Tactical are opposites in positioning, the entry points of both owners are near identical. Like Roe, Z got into the gun world during an industry inflection point. Just as the Sandy Hook shooting led to an unprecedented demand for guns in 2013, COVID did the same in 2020. The political uncertainty, stay-at-home lockdowns, and civil unrest led to record retail demands at volumes never before seen. But while the frenzy from
Sandy Hook was largely concentrated in rifles, COVID brought in millions of new first-time gun owners looking for personal protection and home defense. Americans collectively cleared out their local gun stores, and whatever inventory still around was snapped up at record premiums. Z was one of the newcomers who saw an opportunity. I'll I'll give you some free ammo as well with a gun. If you want to trade it in? Yeah. Okay. Yeah. Yeah, we'll make it work. Okay. I was working tech doing product marketing for a little while, and uh during COVID times I saw a lot of news where it was just a lot of anti-Asian hate, a lot of attacks in
various cities, and I figured, "Hey, you know, let me buy my first gun." Bought my first gun about 4 and 1/2 years ago, and started doing a lot of research. I just played a lot of video games, and I thought it was just really cool to start owning these and start checking different prices and everything. And I noticed there was like a pretty big difference in prices, especially during COVID times where there was a big shortage across the board. So, I'm like, "Okay, maybe I can try to get into it, buy some guns, sell some guns, make some small profit, do as a side business." And there's a lot of my colleagues and friends were business owners in Austin. So, at first it was just a lot of learning. Learning every
single gun is kind of like learning Pokemons as in the sense of, you know, what's so cool about them, what's not so good about them. It was a lot of just learning and reading. There's a million different variations. I signed up for different alerts across different dealers. You have to be fast. So, first come, first serve. I spent a lot of time just stick around my computer, have all my alerts ready. So, as soon as something comes back in stock, I'm like, "All right, let's let's get this." So, the big ones, SCAR 17, SCAR 16, sometimes you could get them a little bit cheaper online and then and sell them locally. Uh just got to be careful who you're selling to. And then there's
the Heckler & Koch MP5 variant, a gun from, you know, 30 40 years ago, and they used to go for crazy amount of money. So, you know, every single one that you can find is about 5 to 800 bucks of profit. So, that's where, you know, having good connections, start talking to the dealers and say, "Hey, you know, can you let me know when you get the next couple in? I'll pay you whatever, save you shipping and timing." And kind of build that relationship. COVID was the best time to be in the US gun business. The market value for every model went up, whether it was stimulus checks or greater purchase urgency or both. Americans that were in the market for a gun were willing to pay record
premiums across the board. The average retail price of an MP5 exploded 50% overnight from $2,700 to $4,000. The FN SCAR rifle went up $4,000 in the span of a month. The Israeli Tavor had been dropping in value for years before the pandemic due to overproduction, weak after-market support, and dying retail interest in bullpup rifles, yet exploded during the pandemic. And if you could get your hands on a gold tiger stripe Desert Eagle, you could flip it overnight for twice its usual cost. Even starter AKs and AR-15s sold hundreds of dollars above their usual rates. Z's early success came with the realization chasing quick profits can cost more than it earns. I feel like I got a little
over my head being that kind of get that reputation of being a scalper, which uh definitely uh taught me a important lesson of, you know, being doing the right by the people is a little bit more important. The gun industry is still pretty old school, and at the time of when I first started, I'm like, "Hey, let's just maximize our profit, make as much money as possible per gun, and not really think about how the customers feel." Once you kind of get your name out there and be known as kind of I'll say like a scalper or someone just flipping a bunch of stuff for maximum profit, it does not do well with the gun community, especially on the higher end side when
people are spending, you know, the 3,000 8,000 10,000 even 15 20K plus, right? It's a very tiny niche community, and once you have a bad reputation, it's kind of game over. Learned that pretty quickly. Since then, I rebranded my shop, really started focusing on just giving the best value to the customers by reaching out directly to the manufacturers and the distributors and try to get the best prices for my customers. If someone comes in, they look at our prices, and they say, "Hey, you know, can you go down a little bit?" If we do have ability to do so, we'll definitely help out there. But if it's like we're making sometimes maybe 10% even less profit margin, we just let them know up front as well.
Yet 5 years after COVID, the market has cooled dramatically. The economy is struggling. Retail prices for most models have plummeted from their peaks, and even all the high-end movie-famous guns are not holding their value. With most of his inventory costing thousands of dollars each, Z has to be ultra precise in his bets. He treats buying guns like investing in stocks. With enough information, you can develop an intuition for patterns, anticipate trends, and gauge future potential per model even without insider information. Z is neutral on the classics like Beretta 92FS and Walther PPKs. While they enjoy mainstream recognition, they're also too outdated to pull the tactical Timmys away from modern
military staples. And it's only a matter of time before Timmys become the largest block of gun owners. While he built his business on Desert Eagles during COVID, he's bearish on these meme guns and status pieces, especially as the economy worsens. Even though the CZ Shadow 2 has been a strong seller, the manufacturer's recent decision to raise prices by 15% has made him bearish. In his eyes, the gun's success was rooted in value as much as competition pedigree. He anticipates demand to fall as customers will start to question why they're paying more now for the same exact gun. Z skeptical of the FN SCAR. He sees its continuous drop as not just a market correction, but instead a free fall in demand. The stock
is prone to breaking. He gets regular complaints from existing owners, and the rifle never truly achieved military pedigree. The SCAR has only seen niche adoption by Army Rangers, Navy SEALs, and the UK, French, and German special forces. The only thing propping up demand today is video game hype, and that's a flimsy hook, especially when most modern titles are dodging the licensing fees with fake gun names. And asking customers to shell out $3,000 for a mostly plastic rifle is hard to justify in this current era of quality metal-based AR-15s. In Z's view, the SCAR suffers from the same problems that plague FN's other firearms. For him, FN has coasted far too long on its past glories, and these aging models have made the manufacturer
an afterthought in the race for modern military contracts. It's the same case with Colts. The M4 and M16 are iconic in history, cinema, and video games as the standard issue rifles for the American military since the Vietnam War. Yet the Colt AR-15 has been overshadowed in price and popularity by AR-15s from newer, smaller manufacturers like Daniel Defense and BCM, which demonstrate that even strong recognition, entrenched military pedigree, and legacy is not necessarily enough for pricing power. But Z is bullish on the discontinued FN FS2000 because permanent scarcity means guaranteed appreciation, even if the rifle is mostly plastic and just as fragile as the SCAR. And he stays far
away from the FN P90, despite its military pedigree, pop culture relevance, and futuristic design. The ammo is expensive, it's outclassed in the range by even the cheapest AR-15, and the constant overproduction makes appreciation impossible. But at the same time, pop culture hype is fleeting. Bushmaster marketed the ACR as a revolutionary rifle in the late 2000s, building up mainstream retail hype by having the gun featured as an intentionally overpowered multiplayer pick in Call of Duty. Yet the in-game popularity never translated to retail success as gun owners balked at the high price tag in a sea of affordable AR-15s. Without military contracts, ACR prices fell year after year until its discontinuation in 2016. But strangely
enough, the model is now appreciating as a collector's item simply due to scarcity. But demand can also collapse overnight based on real-world events. The SIG P320 had been one of the decade's most popular handguns, enjoying unparalleled pedigree as the standard issue sidearm for the US military and law enforcement agencies across the nation. Yet retail demand this year has cratered after widespread safety concerns. Hundreds of civilians and officers reported that their P320s discharged without a trigger pull, even while holstered. The issue reached a breaking point this year when the malfunction killed an on-base American
soldier and led to the Air Force issuing a suspension for all P320s. SIG has responded with rapid categorical denials, insisting that the handgun meets all safety standards and no mechanical defect exists. But this wall of denial has only deepened public skepticism about the gun and its manufacturer. Z has witnessed customers avoiding the SIG brand entirely. New P320s have dropped as low as $200, over half off their average retail price, and still no one's buying. Z fears this negativity will start to spread to SIG's other models, and he isn't stocking any new SIG products for the immediate future. In his eyes, Taran Tactical fills a valuable niche in high-end handguns and can catch buyers who might walk into a
store seeking a Nighthawk, but would still be open to a Pit Viper. Still, he wonders how much mileage is left in the John Wick Halo, especially as the franchise drifts into spin-offs. The guns that he is bullish on are the ones that nail aesthetics, performance, and strong modern military pedigree, like the Knights Armament SR-25, the HK MR556A4, the LMT MARS H, and the SIG MCX Spear. These rifles are firmly entrenched in the modern Western military arsenal, and all it could take to drive up demand and market value is footage from Ukraine of any of these guns tearing through Russian armor. LMT, Knights Armament,
and HK are also all military-first manufacturers that prioritize the civilian market last, which also means that overproduction is unlikely. Yet, some manufacturers never make it onto Z's shelves. Brands like Palmetto State Armory, Christiansen Arms, Springfield, and Bear Creek, to him, are all hype over substance who pedal unreliable, shoddy, overpriced products. For Z, it's not a matter of opinion, but his way of protecting his customers. We want you to come back and maybe spend more with us for your next build and so forth. And eventually, maybe, you know, instead of just having like one gun, you have three or four guns from us. And the very nice thing is customers
coming back and telling us how they appreciate us giving them certain suggestions. And even say, "Hey, maybe save up for a little bit instead of paying this much, save up for another month, buy something a little bit higher-end, you're going to be a lot happier." That really brings joy to us as a shop because, at the end of the day, we can't do too much advertising in the firearm industry. We're kind of gatekept by all the tech companies. Unfortunately, I can't use a lot of my skill sets from my previous job to run paid ads to, you know, even if you're not really careful with being on Facebook or even Instagram, wherever, they'll just ban your account outright.
Z sticks to the models and markets he knows best. He doesn't pretend to have any insight on fud firearms, like break-barrel shotguns, bolt-action rifles, and lever actions. Just like the average Joe investing in stocks, most dealers and gun store owners generally stick to what they know. In a low-information environment, the difference from fact, informed opinion, and educated guess is impossible to separate. Z, like every gun store owner, has strong opinions because that's their job. They have to have conviction in the models and brands they invest in, and no one stays afloat buying one of everything. And because they've put their own money behind every gun in their store or have developed relationships with certain brands over
others, they naturally take losses and wins personally. But in the end, the most successful dealers and stores are the ones with the best information. If you know in advance that a model is being discontinued or that production is ramping up on a gun that's typically scarce, you can stock up before the boom or liquidate before the crash. That's why relationships are foundational in the gun world. They don't just build trust with locals, set you apart from other gun stores and dealers, and extend customer lifetime value. They also maximize information flow. Zero Whiskey Tactical is small enough where Z can meet, shake hands, and build connections with every single customer who walks in, and you never
know who's who. Someone's experience with a specific model, good or bad, could be a one-off or the first sign of a trend that alters supply and demand over time. In this regard, Z's evolution is fascinating, from a profit-driven, ruthless scalper to a conscientious, humble, and personable owner. We do have a very specific focus on making sure anybody who wants anything that's higher-end, difficult to get from the movies, military contracts, that's kind of war with folks. I think that that business model, very specifically, is a little bit more economic proof as well. Times are tough right now. You don't get as many customers that are purchasing from you, but the higher-end guys typically will be able to eke out an extra, you know, couple
hundred bucks to get something out of they or a couple thousand as well. Catching a drop can be extremely difficult. You might be working, you know, 10 hours, 12 hours a day, being a doctor, lawyer, and if it's just 2 seconds and then all the inventory is out, then you can't find anything. So, we're here to help you source and it's guaranteed that it's coming in. So, we don't take your money unless we know it's coming in within like a couple days or a couple weeks tops. So, you get first dibs on anything that comes in, usually a little bit of better pricing as well. Let's say there's something that's wrong with the firearm or there's something wrong with the purchase, we're here to make sure that you're taken care
of, whether it's our responsibility or not, just because I think that goes a little bit longer way than just you're just a number, I'm selling you a gun, and that's call it a day. Zero Whiskey Tactical grosses on average $200,000 a month for an annual run rate of $2.4 million a year. 95% of his sales are new guns. With only one store, Z works the shop himself every day. And since he's not paying himself, the low payroll means higher operating margins at an average of 15%. The gun industry is a paradox, at once enormous and fragmented, national yet local, political yet human to its core.
Low information is both its greatest challenge and its greatest moat, where small independent shops are insulated from the corporate consolidation that has taken over every other retail sector. Mr. Guns and Zero Whiskey Tactical are two gun stores chasing after different markets in different cities in Texas, and yet they have made the same bet as every other gun store in the nation. The only reliable tools to navigating consumer irrationality, supply chain uncertainty, commoditization, and non-existent data is constant observation and real human relationships. Did you guys need the receipt? No. All right. Well, you guys are all good to go. Have a great rest of y'all's day, y'all.
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