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Posted By FFL Dealer Network on 03/23/2020 in FFL Business

COVID-19 and the Impact on FFL Dealers

COVID-19 and the Impact on FFL Dealers

The surge in gun and ammo purchases as the nation wrangles with the coronavirus is creating a subset of problems for gun owners, dealers, and the firearms and ammo industry. 

How can FFL dealers keep inventory in the store, and is a gun sales ban going to happen? 

Firearms and ammo are no defense against the COVID-19 virus, so why are guns and bullets flying off the shelves? 

The panic buying is largely because of the government response to coronavirus. With officials from the president on down warning people to stay indoors, retail businesses limiting hours, and even closing down, people are worried. The panicked purchase of toilet paper is another symptom, but a less dire one. People are buying guns and ammo because they are concerned about a breakdown of society, and they will need to defend themselves and their property. 

This kind of panic is creating another government reaction, which is leading to more panic and a tautological loop. 

GUN SALES BANNED 

As of this writing, no emergency gun sales bans are in place. Gun bans, enacted before the virus outbreak, are in place. New Orleans Mayor LaToya Cantrell signed an order allowing firearms sales to be restricted or banned. The local order is based on a state law that allows firearms to be suspected in an emergency. A similar possible ban was set up for Champaign, IL, by Mayor Deborah Frank Feinen. 

The difference is the New Orleans order is based on state law. The Champaign order is based on a City of Champaign City Code, not state law. 

As news outlets, especially those on the right and the far-right decried this as a sales ban, both mayors were quick to point out they have not implemented the ban, yet. 

However, gun stores are not deemed an “essential” business in many places and can be ordered to close. Since hardware stores, plenty of which do sell firearms, are considered an essential business and stay open, this is not exactly a gun sales ban. 

THE STAFFORD ACT 

Local ordinances and state laws are one thing. The Stafford Act is a federal law by which the federal government can shut down gun sales nationwide through FFL dealers. According to some legal experts, the Stafford Act may not be necessary anyway. A state of emergency, as declared by the president, gives the president broad powers to affect the economy, retail, and manufacturing industries. 

Just for the record, the nation was already under a state of emergency declaration before the COVID-19 outbreak. Twenty-eight state of emergency orders were already in effect. No president has used a declaration to suspend gun sales. No national emergency has spurred such an increase in gun sales, especially among first-time buyers. 

SYSTEMS CRASH 

The surge in gun buying is sometimes more than the background check systems can handle. The Pennsylvania system is not the same as the FBI background check required by the Bureau of Alcohol Tobacco and Firearms. The federal system is handling the surge. The Newsweek article also points to FFL dealer computer systems crashing because of the surge in buying. 

When people go to buy a gun and get handed a multi-day delay, it creates even more of a panic. That leads to even greater pressure on an already taxed system. Faced with an unexpected wait for a gun, some buyers may just cancel the sale and leave in hopes of finding a sales point with less of a delay. 

SALES SPIKE 

Firearms dealers around the US have empty shelves as panicked buyers wipe out the supply of low to moderate cost firearms, and whatever ammunition is on the shelves. 

High-cost firearms hang around a bit longer, but even those are moving faster than usual. 

A PAST LESSON 

Gun buyers old enough to remember the panic ammo buying from a few years ago need to keep in mind the lessons learned then. Ammo makers were cranking out ammunition just as fast as they could. People were buying it as soon as it hit the shelves. It is the same thing with toilet paper and other paper products right now. 

Ammo makers are not going to significantly invest in more production equipment based on what is likely a short term scare. Besides which, amping up production will take some time. A plant already running at capacity simply cannot make more ammunition because the demand is there. 

The same thing applies to gun makers. The exact number of gun manufacturers changes regularly. What is certain, the nation has more than 150 makers and all of them are turning out guns as fast as their equipment and employees will allow. 

As soon as the panic is over, guns and ammo production will return to normal, and FFL dealers will be able to keep inventory on hand. 

WHAT ABOUT NOW? 

Dealers are just going to have to weather this panic as best they can. Put in the orders. Hope the orders get filled. 

Once the storm has passed, take a lesson from investing experts and diversify. Sell more than just guns. Look at hardware stores, a business that is often considered vital even in a community ravaged by a natural disaster. If space is available, offer fishing gear and supplies, clothes, camping supplies and other resources people can use in an emergency. If gun sales get banned during the emergency, the other supplies may be enough to keep the doors open.

Stephen Ralph, Founder

About Stephen Ralph


Stephen is an Active Duty USAF Operations Intelligence Analyst, online entrepreneur, and founder of FFL Dealer Network.

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