If an industry’s overall profitability (and thereby its health) is based on sales growth, then the firearms industry has met its enemy… and it is us.

Unlike other products, guns not only retain their value but can appreciate. For every new gun sold, a used gun is created. The used gun market is vast and lively, taking place at gun shows, pawn shops and online markets such as Gun Broker. Friends selling guns to friends, dad’s passing heirlooms to sons, guys upgrading and selling off their trade-in, all yank on the hand brake of new gun sales.

I once asked the international sales manager for Beretta, whom he viewed as his biggest competitor. “It must be Browning,” I posited somewhat naively. “Not at all,” came his reply. “Beretta’s biggest competitor is Beretta. Used Berettas.”

He had a point. Of the last five guns I've bought, four were used and one was new. The four were all Smith & Wesson revolvers, including a NIB Model 40 Centennial (What a cherry find that was!). My sole new gun purchase was a 20-gauge Benelli Cordoba.

From an overall industry standpoint, a sale is a sale and Spurlock's Gun Shop in Henderson, Nev., probably made as much profit on the used wheelguns I bought than if had I bought identical guns new. However, from Smith & Wesson’s standpoint, no sale took place at all.

There are dealers, traders, brokers, auctioneers and purveyors of used guns that don’t sell anything new at all. I don’t think anyone has ever tried to put a dollar figure on the total used gun business in the U.S. every year, but I’ll hazard a guess that it’s somewhere between 15 and 25 percent of the new gun business.

Figure that the total U.S. firearms annual production is around 2 million firearms and you’ll see that we’re not talking chump change here. There could be anywhere from 300,000 to 500,000 used guns being traded every year.

Let’s say I’m way off base. Let’s say the used gun trade is only 10 percent of the overall industry’s sales volume. Hello? That’s still 200,000 guns a year!

It’s not equal, however. There’s a direct relationship between the value of a gun and its significance in the used market. Go to a high-end shotgun dealer and you’ll find more used Perazzis and Kreighoffs on the rack than new guns. Why? Because expensive guns are traded more frequently than cheap guns.

The used gun market is a significant and often over-looked aspect of the gun business. After all, they’re Beretta’s number one competitor.

Industry Insider