Burgeoned by shuttered offices, bolstered by busted brick-n-mortar stores, all the while trying to survive the onslaught of Coronavirus: e-Commerce has rapidly evolved in 2020. New niche industries have accelerated their online presence in the face of unusual, once-in-a-century challenges that many businesses will simply never face. And, as demographics across the country begin to explore new social norms, businesses that are savvy enough to survive in the newly expanded digital realm are, in fact, thriving. Some are controversial. Like weed delivery services, which have been popping up like, well, weeds. Some are simply molding new forms from old industries, like ghost kitchens serving delivery-only meals.
Many well-established industries are being disrupted by the new normal we all live in, creating a slew of unusual start-ups. Take the gun industry. For decades, gun dealers have largely spent their operating costs on maintaining massive physical overhead. We’re talking about large retail outlets and conventional distribution which, by all accounts, have been largely bled dry of their inventory. Sales have historically been conducted in-person, and only within the last decade has a surge in online FFLs (Federal Firearm Licensees) and e-Commerce gun shops begun to evolve a largely analog market. Last year, Coronavirus and myriad influences – a contested election, a push for new gun control by the new President and federal agencies, civil strife, and political hyperpolarization – accelerated that tectonic shift in how Americans engage in gun culture.
“My suppliers that supply everybody in the United States, they’re all pulling from the same supplier, so they were the first ones to go out. Then I couldn’t restock my shelves,” says Mike Shahan, who owns La Pine Sporting Goods in Oregon. “Now what I have to do for shopping is wait for allocations to come to me, which are few and far between, or shop for retail and try to get it in the store. It’s hard to do business that way.”
The lack of inventory is so intense, Shahan said his customers, many of whom are recreational shooters, have stopped coming. “It is threatening [our business],” Shahan said. “What I’m trying to do now is make it through this dry area until I can start getting things, because what I tell people is it’s like being a car dealer. You just don’t have any cars to sell.”
“It’s tough! It’s definitely scarce,” said Wayne Griffis, a gun owner in Florida. “You have to get up early — make sure you hit the stores. You have to know when they’re getting new shipments in,” Griffis said, referencing a nationwide shortage of not just guns, but ammunition. “We’ve been having to go out through other channels and basically bid on it. And buy it from different sources, buy it from private market, pay whatever the market is for it — plus shipping and to get it transferred here,” Zaideh Farhat, owner of Green Acres Sporting Goods in Jacksonville, said. Farhat indicated it’s not just distribution challenges on U.S. soil affecting supplies. “Also, the components to make the ammo — a lot of that raw material comes from overseas.”
Yet where conventional dealers bound by physical geography and over-the-road distribution are struggling to provide guns and ammo to their customers, the online sector, bolstered by lean start-ups who don’t seek full Federal Firearms Licensure but instead sell individual firearm parts, is booming. Companies like 80-Lower.com, which sell variants of a partially fabricated firearm receiver the end-user must ‘gunsmith’ to completion (aptly called an 80% lower) are ditching the conventional firearm supply lines, and the financial squeeze they’re putting on dealers, altogether. While it is technically less convenient than simply walking into a gun store and making a purchase, the idea of assembling a firearm from scratch has been embraced by millions. “I haven’t been able to get my hands on a single rifle or handgun I wanted to buy this year,” said Sean Steinberg, a gun owner in Pennsylvania. “I started looking around for individual parts to put it together myself, which I’ve seen friends do – I was able to get mostly everything I needed within a few weeks, and it wound up costing me about the same.” Steinberg’s assessment comports with marketing metrics, too:
Google’s Keyword Trends reports a 50% to 65% increase in search terms like “gun parts”, “gun kits”, “AR-15 parts”, and “80% lowers” compared to this time last year. Related long-tail queries like “ar15 upper” and other individual parts have seen break-out gains of up to 700%. The start-ups capitalizing on these organics are reaping the benefits.
The practice of building firearms has always been legal without licensing. That means firearm-centric lean startups who engage in minimally-viable-product (MVP) approaches to sourcing products get to forego the more expensive aspects of operating like a traditional dealer: Virtually all individual gun parts (except for frames and fabricated receivers) aren’t considered firearms. They don’t require special taxation, licensing by the Bureau of Alcohol, Tobacco, and Firearms, or additional overhead. Many startups have found success in 2020 with simple drop-shipping. And while a new administration works through Congress in consideration of new gun laws, one thing remains certain: A record number of Americans are buying (and building) guns like never before. The entrepreneurs who take advantage of this new industry are certain to find success.