What is the future of the fine firearms market

[Alistair]

You can going into nearly any Rolex boutique and find there are no watches for sale, only display models, so that you may get on a list. Most used Rolex are selling well above retail and retail is very hard to find.

Long lines for custom guns is only because there are few to make them

But that has nothing to with fine firearms. Today at Richmond gun show saw two H&H shotguns sub $5k. There we plenty of classic doubles and BB in the 2k range. Mostly from collections of former soldiers stationed in Europe back when. All a tiny island compared to the vast sea of tactical kit.

Demand for fine guns is currently way down. Rolex watches way up.

If you'll allow a slight thread diversion, this is a common misconception that Rolex actively promotes.

Firstly, pricing. Rolexes are a specific type of luxury good called a Veblen good [1]. What does that mean?

Well, for most goods, demand is inversely related to price point. i.e as price increases, demand decreases.

For Veblen goods, this is not true. For these goods, as price increases, demand increases. This is because the appeal of the brand is exclusivity. High prices make it unattainable to most, which makes it desirable to all, which makes those who can afford it, pull the trigger.

Rolex knows this, but they also know that to maintain this position, they can NEVER reduce prices [2]. If they do, then they lose their brand reputation and have to start actually being competitive with brands like Omega on price [3].

So, how do you ensure you can always raise prices?

Well most companies when forecasting demand work out how many units they think they can sell, then plan to make that many units. That maximises profit.

When Rolex forecasts, they work out how many units they think they can sell, then make 50% of that amount. As a result, there is always a wait list, they can charge whatever they like, and ideally second hand prices remain higher than MSRP as there are more people in them market than there are units available.

They justify this as 'production constraints', usually related to trained staffing. This is a cool story for the brand; 'Oh we couldn't possibly make any more units to this quality as there are no people who meet our standards', but it's also bullshit. Omega manages to respond to changing demand just fine, Rolex themselves have ramped up production every year over the past decade, they could easily eliminate wait lists. They just chose not to.

What does this have to do with the situation today?

Well, you cannot assess demand for Rolex by MSRP. That is not driven by outside market forces, it is driven by Rolexes internal strategy. Second hand pricing might be an indicator of overall demand, and the second hand prices ARE dropping [4].

Revenue is probably another indicator. They're selling at the same price or higher, but how many units are they making? In 2021 revenue was $13bn. In 2022, it was $9.7billion [5]. They've intentionally made less units, presumably becasue they believe that demand is dropping...

1 https://www.investopedia.com/terms/v/veblen-good.asp
2 https://www.minus4plus6.com/PriceEvolution.php
3 https://www.prestigetime.com/blog/omega-vs-rolex.html
4

5 https://legitcheck.app/stats/rolex/

 

[Hunter-Habib]

If you'll allow a slight thread diversion, this is a common misconception that Rolex actively promotes.

Firstly, pricing. Rolexes are a specific type of luxury good called a Veblen good [1]. What does that mean?

Well, for most goods, demand is inversely related to price point. i.e as price increases, demand decreases.

For Veblen goods, this is not true. For these goods, as price increases, demand increases. This is because the appeal of the brand is exclusivity. High prices make it unattainable to most, which makes it desirable to all, which makes those who can afford it, pull the trigger.

Rolex knows this, but they also know that to maintain this position, they can NEVER reduce prices [2]. If they do, then they lose their brand reputation and have to start actually being competitive with brands like Omega on price [3].

So, how do you ensure you can always raise prices?

Well most companies when forecasting demand work out how many units they think they can sell, then plan to make that many units. That maximises profit.

When Rolex forecasts, they work out how many units they think they can sell, then make 50% of that amount. As a result, there is always a wait list, they can charge whatever they like, and ideally second hand prices remain higher than MSRP as there are more people in them market than there are units available.

They justify this as 'production constraints', usually related to trained staffing. This is a cool story for the brand; 'Oh we couldn't possibly make any more units to this quality as there are no people who meet our standards', but it's also bullshit. Omega manages to respond to changing demand just fine, Rolex themselves have ramped up production every year over the past decade, they could easily eliminate wait lists. They just chose not to.

What does this have to do with the situation today?

Well, you cannot assess demand for Rolex by MSRP. That is not driven by outside market forces, it is driven by Rolexes internal strategy. Second hand pricing might be an indicator of overall demand, and the second hand prices ARE dropping [4].

Revenue is probably another indicator. They're selling at the same price or higher, but how many units are they making? In 2021 revenue was $13bn. In 2022, it was $9.7billion [5]. They've intentionally made less units, presumably becasue they believe that demand is dropping...

1 https://www.investopedia.com/terms/v/veblen-good.asp
2 https://www.minus4plus6.com/PriceEvolution.php
3 https://www.prestigetime.com/blog/omega-vs-rolex.html
4

5 https://legitcheck.app/stats/rolex/

Nice analogy. Would you say that James Purdey & Sons is the Rolex of the bespoke gun making industry ?

 

[Alistair]

Nice analogy. Would you say that James Purdey & Sons is the Rolex of the bespoke gun making industry ?

I think most of the English makers fit the description here, as does Apple, Montblanc, Ferrari in other sectors.

These are always going to be expensive goods, but based purely on production costs, a Purdey should cost maybe 25% more than a custom shop Browning. In reality, they cost maybe 2-5x what the Browning does.

Purdey could choose to expand production and sell more units, but don't. They're also sold by Richemont, who know a thing or two about Veblen goods...

 

[Ontario Hunter]

I think you guys are missing one point about the younger generations. They didn’t wake up wanting a black plastic gun, they were pushed on them by companies wanting to sell low cost easy to produce products.

If all the YouTubers were paid as much to plug dakotas as opposed to AR’s, you’d see the market shift.

Yeah, I don't get it. Millennials will fight each other at a gun show over a $1200 "black gun" but turn up their noses at a fine sporterized Springfield or Mauser for half the money. Corporate brainwashing for sure. And making guns with a Xerox copy machine? What's up with that? Just as well buy a Playdough kit and some water color paints if you want an imitation gun.

 

[Altitude sickness]

Ducati motorcycles also have the exclusivity pricing figured out. Along with DeBeers. If you want to feel good about what the higher priced rifles sell for. Look up collectible Italian motorcycles and cars. Firearms are in the minor league’s comparatively.

And I am in the Busch league:>))))

 

[alby]

Does anyone have any idea todays value of an original Rigby Dangerous Game SSB
Magnum Mauser .416 Rigby in well cared for condition? I believe 159 were made.

I’d be interested to know as well Lon, had a fondle of a very nice one this year. Wasn’t for sale though!

 

[Rem280]

I'm curious to know what collectors of high quality firearms feel about the market in general. I am open to buying the right firearm at the right price but have some hesitation.

1. Central Banks have dumped excessive liquidity on the market since 2008. It has sent all collectibles up in value.

2. All markets go through expansion and retrenchment and we have been in a longer than normal bull market in all asset classes.

3. Collectibles like fine time pieces and cars seem to be in a softening market already. Are firearms in a similar situation.

4. Hunters with fine firearms that hunt the world are a dying breed and fewer hunters are in the pipeline to maintain prices.

5. Boomers, the large collector generation are dying off. Are there enough X'ers to fill the gap and maintain prices.


In my mind, this is partially offset with the fact that western economies have so much debt that their only recourse is to print more money and debase their currencies forcing the values of most asset classes to continue to rise.

Is it still a good time to buy or will the market come down causing better opportunities for deals in a few years.

I welcome your thoughts.

Being in Florida I have noticed how exclusive hunting is. No one wants to bring new hunters into this. When I finally got the opportunity to learn and enjoy, made the most of it. Helped many people shoot their first hog and enjoy it. We the hunters need to do more to include others. Even if it involves sharing meat.

 

[cash_tx]

Somewhere around 2005 the prices of Rolex started going off the charts. I've seen recently that you can buy a new Rolex from boutique (wait listed of course), wear it for a couple of years...then sell it for a profit on the used market. Currently the Daytona models are through the roof on the used market.

I've always been an Omega man so it's meant very little to me. As for the sea of tactical and the tiny island of classics...I'd like to say that I'm surprised, but I'm not. That's pretty much how it's been at most gun shows for the past 30 years, but it's been ramping up more and more. I'm happy to see people buying firearms in general, but the fancy wood, engraving, double barrels, sidelocks and polish bluing is being pushed to the rear. Supply and demand, can't sell what people don't want.

I suppose this would be the wrong time for me to say that I'm looking at buying an AR...

From what I see, AR prices are actually pretty friendly right now. Can't say the same about their ammo, as of about a month and a half ago.

 

[WAB]

I was at the annual nomination dinner for ‘The Worshipful Company of Gunmakers’ in London this week. If London Best is your definition of a fine firearm, the market is doing very well indeed. All of the major makers are sold out with delivery times measured in years not months.

 

[Flewis]

I was at the annual nomination dinner for ‘The Worshipful Company of Gunmakers’ in London this week. If London Best is your definition of a fine firearm, the market is doing very well indeed. All of the major makers are sold out with delivery times measured in years not months.

Is there another definition?

 

[ktk120]

I have said this before...lets estimate 500 million firearms in the US. Boomers are the only ones for most part with the collection of 100+ guns. Boomers on the young side are 65+ most nearing 80. In the next decade i suspect that 300-400 million of the guns in the US are going to go onto the market. You are already seeing this as last dozen guns i bought came out of a estate of someone who died.

Now the live auctions are still high because the boomers who are in good health are still buying because they are seeing guns they have not been able to buy in a long time. Anyone who does online or forums knows what things sell for. Already you cannot even give away most basic guns or 60s-80s model 700 or model 70s

I dont see many guns having much future especially high end big bore. Younger generations never even heard of them and they are spending 500k on houses they don't have disposable income. I think we will see a point where you almost cannot give away certain guns.

 

[Flewis]

Many build great guns, but FINE no.

 

[Safari Dave]

Maybe the mindset of 20-40 year old hunters will change as they get older, but my 25 year old son couldn't care less about fancy wood or pedigree.

Synthetic/stainless/lightweight/durable are what's it's all about for him and his cronies.

It's completely logical and I can't really argue with it.



Be the first one to our local transfer station when I croak, and you can find some fine walnut!

 

[Flewis]

Maybe the mindset of 20-40 year old hunters will change as they get older, but my 25 year old son couldn't care less about fancy wood or pedigree.

Synthetic/stainless/lightweight/durable are what's it's all about for him and his cronies.

It's completely logical and I can't really argue with it.



Be the first one to our local transfer station when I croak, and you can find some fine walnut!

yeah, used to be all wood and blue steel to me also but elk hunting and beat up guns changed my perspective.

 

[CoElkHunter]

I have said this before...lets estimate 500 million firearms in the US. Boomers are the only ones for most part with the collection of 100+ guns. Boomers on the young side are 65+ most nearing 80. In the next decade i suspect that 300-400 million of the guns in the US are going to go onto the market. You are already seeing this as last dozen guns i bought came out of a estate of someone who died.

Now the live auctions are still high because the boomers who are in good health are still buying because they are seeing guns they have not been able to buy in a long time. Anyone who does online or forums knows what things sell for. Already you cannot even give away most basic guns or 60s-80s model 700 or model 70s

I dont see many guns having much future especially high end big bore. Younger generations never even heard of them and they are spending 500k on houses they don't have disposable income. I think we will see a point where you almost cannot give away certain guns.

"They are spending $500K on houses". And for the younger generations, there's a MUCH smaller percentage of those in their age group that have the jobs that allow them to even consider a purchase like that, when compared to the boomers' at their respective ages given inflation. Their "work ethic" is just not the same as previous generations. I personally know of three examples. They're content working their self described "lazy girl" jobs while living with their parents or others while driving beater cars, if they even have one. I've told them they need to pursue a career, so someday they can purchase a Heym 89 DR to take to Africa. They look at me like I'm from Mars or OZ. Ha! Ha! Ha!

 

[Safari Dave]

"They are spending $500K on houses". And for the younger generations, there's a MUCH smaller percentage of those in their age group that have the jobs that allow them to even consider a purchase like that, when compared to the boomers' at their respective ages given inflation. Their "work ethic" is just not the same as previous generations. I personally know of three examples. They're content working their self described "lazy girl" jobs while living with their parents or others while driving beater cars, if they even have one. I've told them they need to pursue a career, so someday they can purchase a Heym 89 DR to take to Africa. They look at me like I'm from Mars or OZ. Ha! Ha! Ha!

I'll confess...

I took a Stainless/Synthetic Weatherby Mark V on my elk hunt 2 weeks ago. Sorry...





The Heym will be great for holding up tomato plants in the garden next year.

 

[CoElkHunter]

I'll confess...

I took a Stainless/Synthetic Weatherby Mark V on my elk hunt 2 weeks ago. Sorry...

6.5 Creedmoor? LOL

 

[Safari Dave]

300 WBY MAG, thank you!

 

[thriller]

As the number of hunters decreases and younger generations are only interested in black plastic stocks, if at all, I feel like I am part of a dying breed. I only hope at some point in the future someone will give a good home to the pieces I have.

Be careful about lumping everyone together it’s rarely true

 

[CoElkHunter]

I'll confess...

I took a Stainless/Synthetic Weatherby Mark V on my elk hunt 2 weeks ago. Sorry...





The Heym will be great for holding up tomato plants in the garden next year.

The Heym must be a .243? LOL