I was disheartened to read last night that Daniel Defense, a titan of the firearms industry, lead by an honorable and ardent supporter of the second Amendment, dedicated to creating a high quality line of products was suffering from up to 100 layoffs of full time positions.
This is unfortunate. My condolences go to each hard working, dedicated employee there. I have always had the best experiences with Daniel Defense staff, customer service and product.
I believe the issue is not solely to blame on Daniel Defense or their marketing entirely, however reflects on the industry as a whole. If we take a step back from our somewhat often myopic view of the firearms industry we will see that the AR market was a bubble, and with all economics bubbles tend to pop.
Last year, while discussing issues related to this with a friend I stated that within 5 years 50% of the companies dependent on the AR platform would be out of business due to a market saturation of similar product lines and competition for market share. It’s simple supply demand economics.
Everyone who wants ONE AR has THREE. There are other companies in this market I know of through contacts that are struggling as well as suffering layoffs. This is not specific only to AR producers, as a gentleman that is a large regional dealer and distributor for Glock, recently told me he has sold 77 Glocks in the year 2017, whereas he averaged over 70-80 Glocks a month in prior years.
Think back to 2003, how many manufacturers of the AR platform were there? Less than half a dozen. There are now an innumerable number of companies whose primary focus and product line is the AR. With a saturated market of competing products, what I believe is a shrinking pool of potential customers, and a product that is durable enough to last decades (not planned obsolescence or deterioration) the current environment of tens of thousands of jobs, production and costs is not sustainable with current demand levels and other semi-auto variants and firearms competing for the same customers.
We all know that most owners will never shoot their AR enough to wear it out. With that known, how many can be sold? I attend gun shows where I see the same racks of the same black rifles 6 months apart. In shops in my region, some ARs have sat for 9-10 months or more. I myself have money, consider myself an AR-Phile, totally immersed in the platform since a youth, and I can tell you I own 3 and would only ever consider perhaps one more – a retro style or original 727 for memories sake. That is it. I will likely never purchase another AR again. I have no need to and there is a large world of firearms out there to explore.
The precision bolt gun market appears to have really taken off over the last couple of years, with an explosion of differing bolt gun set-ups in chassis and long range capable calibers: Ruger RPR, Tikka Tac A1, Bergara, Savage, the list of affordable “budget” long guns is extensive, and then there are the high end rifles such as GA Precision, Surgeon, and Sako among others out there as well. Then take into consideration the ever expanding other semi-auto rifles on the market; AK, FN SCAR, TAVOR, etc. All of these are competing for customer dollars.
We’re still coming off of the “War Years” of 2003-present where there were huge overseas contracts, private contractors (many friends of mine) who made large amounts of money that they poured into firearms themselves, a large defense industry built up around the Wars in the Middle East, private shooting schools and training, the rise of forums such as this, all of it created a fervor for an industry that exploded in new ideas, products and volume of sales to meet a ever growing demand, coupled with a political environment that saw impending doom on the rights to own or purchase these products, that itself stimulated an artificial rush and hoarding demand for products. The AR market reached an apex, a zenith where the only direction it could take is downward. This bubble popping is a market correction where the free market will be cruel, and determine the sustainable amount of “supply” necessary to meet the actual and real, “demand”.
I am surprised more companies have made it this far and that DD of the others out there is in the position it is currently in. I can tell you that if the AR Market was an index on the stock exchange, I would not be buying shares right now. I would be selling. That is my observation and opinion.
In writing this, a close friend of mine very prominent in the industry messaged me shortly after reading this, “It’s gonna get worse, the market is dead.”
