Selling to the High End

The past few years have been difficult for many Americans to make ends meet. Two years ago, the country faced near-record-high inflation of 8%, which has only slowly improved. As a result, consumers are paying more for everything from food to durable goods.

Even “luxury goods” such as watches, shoes and sports cars — products often considered “recession-proof” — have been impacted by inflation. These items tend to be what economists describe as “highly elastic” as demand often changes due to fluctuations in income as well as the availability of less-expensive substitutes.

Firearm sales, which hit record highs during and immediately following the pandemic, have also long seemed immune to inflation — at least until they weren’t.

But with inflation easing, high-end markets could rebound the quickest.

“While overall firearm sales continue to decline from the pandemic high, the market is seeing some shifts toward higher-priced products,” said Nancy Bacon, VP of outdoor analytics firm Southwick Associates.

The high end of the market has quickly recovered.

“Although it is not the majority of the sales, the percentage of firearms purchased retailing for more than $700 has been increasing,” Bacon told Shooting Industry. “The overall average price paid reported by consumers has also increased over last year, primarily driven by handguns and shotguns. Whether this is due to recent price increases or a shrinkage in the number of consumers only willing to spend at lower price ranges is unknown.”

The State Of The High End

The true luxury end of the spectrum remains strong, but it likewise requires those product offerings to stand out in an increasingly crowded market.

It also needs to be understood those paying with an American Express Centurion Card (i.e., Black Card), or simply don’t bother asking the price value quality above all else. In some cases, those doing the buying — or at least setting it up — aren’t the actual buyers. Rather than a straw purchase, however, these individuals do the legwork for those who have shoppers for their fine wine, watches and cars.

“We don’t expect those customers to generally walk through the door, as they have a ‘point man’ they’re already talking to,” explained Mike Waugh, purchaser and former sales manager for Rifle Gear. “But we do see some higher-end clientele come in and they’re looking for recommendations.”

This is where a well-rounded knowledge base for the retailer is even more crucial. Waugh shared while the shop doesn’t typically sell $30,000 custom shotguns, they still have clients who have an appreciation for such firearms.

“High-end guests are unique,” suggested firearms industry advisor Miles Hall. “Tending to follow their own path, they’re more about the experience and being treated respectfully — yet quietly. Once mutual trust is firmly established, they will rarely haggle over price.”

These customers may want something exclusive and are willing to pay a premium.

“When they know a dealer handles such special items, it builds a bond between them and the dealer,” said Hall, who was also the founder and president of a firearms retail store and gun range in Oklahoma for 36 years. “Both now feel a bit of belonging, if you will. We lovingly referred to our high-end buyers as ‘whales.’ Then we found once they were comfortable with the dealer, they would tell their inner social circle. This in turn brings in more opportunities. In the end, this can become a very healthy yet quiet department in the business.”

Affluent Clientele May Require Special Attention

There are also those customers who might be more readily described as “affluent” rather than “wealthy” — where they work for their money rather than it working for them — but may still need to be courted accordingly. They may not have a point man and will therefore put greater trust in the retailer.

“Some of these higher-end buyers may not know guns as well, and the sales staff needs to keep this in mind,” counseled Waugh.

This includes not risking a long-term relationship for one massive sale.

“You can’t BS a customer and hope they’ll come back,” he continued. “One big sale isn’t worth driving away a potential return customer.”

Italian shotgun maker Caesar Guerini has carved out a niche in the market by offering a diverse range of products, with a more recent focus being on the higher end of the shotgun market.

“By providing top-quality products, special edition runs and limited distribution, along with an industry-leading warranty and service program, we empower our dealers to maintain stronger margins,” said Tom Smith, Caesar Guerini USA VP. “Our commitment to crafting classic over/under shotguns, while utilizing modern production techniques, has positioned Caesar Guerini as a distinguished name in the premium shotgun market.”

In addition, the company has catered to the market with its lifetime warranty and service program to instill confidence in both its dealers and the end consumer. 

“While the premium shotgun market may not be entirely recession-proof, it is less affected by the typical market fluctuations seen in the broader firearms industry, such as seasonal hunting or competition cycles and changes in the political landscape,” Smith added.

The Custom Market

The firearm manufacturers have also been impacted by higher inflation in recent years, but Simon Khiabani, founder of SK Guns, said his firm has weathered the storm by delivering unique products to the customer.

“We have three divisions in the sales realm,” Khiabani said. “We have your counter guns, which people buy and shoot. That’s about cash flow.”

SK Customs serves as the “second division,” offering limited-edition production runs tied to a particular theme. With multiple handguns in each theme, it can lead to repeat customers who desire all the offerings in a particular series. Then there is its SK Bespoke Collection of one-of-a-kind Colt handguns with hand engravings completed by FEGA (Firearms Engravers Guild of America) Master Engravers.

For SK Guns, quality has to come first as its customers are about the uniqueness of its offerings, and it has strived to ensure its “limited edition” remains limited. Many companies may claim a product is “limited” but still release it in the high hundreds to thousands.

“We’re not doing that,” Khiabani emphasized. “We do 200 to 300 units in our series, and we’ve seen them sell out fast.”

In fact, because of the demand, SK Guns now ensures those who bought the initial offerings in a series are given the right of first refusal on the next release.

“If you bought into the collection and you want the next one, it’s waiting for you,” he said.

Future themes are already lined up through 2029, so SK Guns has no shortage of releases in the pipeline. But the company is also seeing a need to adjust to the demand slightly.

“We are looking to bump up the number of guns in the production run just slightly while reducing the offerings,” Khiabani explained. “We recently did 14 productions of 200 to 300 units, putting just over 4,000 firearms in the SK Customs line.”

Instead, SK Guns will look to do nine productions with a total of 4,700, which will still keep the total of limited-edition models under 525 units each. 

Market Conditions & An Election Year

As with the rest of the firearms industry, the uncertainty in the run-up to the 2024 presidential election is impacting sales. In 2020, sales increased before and then after the election, and 2024 could be the same. Yet instead of driving the high-end of the market, it could be softening it as consumers are worried about the future of the AR platform, not over-under shotguns or custom six-shooter revolvers.

“The uncertainty of the coming election may have shifted demand to guns that might be more likely to be banned than lever guns,” said Greg Buchel, president of Big Horn Armory.

Buchel shared the market has been strong in recent years, but the higher costs of consumer goods have taken a toll.

“Demand for our lever guns has softened some this year, and I suspect inflation plays a large part,” he noted, “especially for our customers who may not have high-end income but would like our high-end quality.”

A Growth Business

There have been fears for several months a recession may be looming, but gun sales at all levels have previously been able to weather the storm. Moreover, unless there is a complete economic meltdown, the high end of the market is likely to continue to see the same level of sales as usual.

It may just be a bit leaner times for some manufacturers.

“I can’t say we’re recession-proof,” admitted Khiabani, “but we’ve been able to keep the same margins, which have never changed for us.” 

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