The business of Silencers

M

Machineguntony

New member
I am hoping to get some insight into the silencer business, as there are members, who work in the business and are very knowledgable.

A while back, I spoke to a silencer dealer who complained about another silencer dealer. The complaining dealer stated that competition from the bigger dealers was driving down the margins on silencers. His words were, 'they make $20 a can, and they're happy with that, it's killing me.' I won't say who he was complaining about.

My first thoughts were, 'yay for capitalism'. But then I went and checked some of the bigger dealers, and yes, he was right.

Compare, for example...

http://www.silencershop.com/shop/aac-ti-rant-9/

Cost is $499, and they offer a free mount. I'm a big fan of the Silemcer Shop, just as a disclaimer, as the guys are friendly and very knowledgable.

Compared to...

http://www.gunbroker.com/Auction/ViewItem.aspx?Item=468376519

Cost is $679.

My question is how can they afford staff, rent, and overhead at such small margins? How many does a typical retailer sell in a month or day? What are the true margins on a suppressor (meaning are there any factory to dealer incentives or factory hold-backs that are paid on sales)?

Why do none of the big boys of firearms retailing, like Cabelas or Bass Pro sell suppressors? Are they afraid of the negative Hollywood connotations? Volume not high enough. I would imagine that if Cabelas started selling suppressors, the form 4 wait would probably skyrocket, due to volume. Many people still do not know that suppressors are legal: I get asked regularly, 'aren't those illegal?'
 
Silencershop has the same business model as Buds........high volume, low margins.
They each buy in such large quantities that they get a better wholesale price than the shops who order a dozen or two a month.

The reason Cabelas and others don't get in the NFA game is the process......the dealer gets to sit on the silencer for as long as a year until the Form 4 is approved. Big box retailers would gag at that idea.
 
I look at how a silencer is built, read articles on illegal silencers and the prices for those illegal cans. Somewhere on this board or another, they referenced an article where a government agency was buying cans for $50.00, or something like that. I don't think any dealer is not making good margin on cans. The legal hassle and the time involved looks like the only reason the big box retailers don't sell them. I would like to have one for my ar. When high quality cans come down to $300, "stamp included", out the door with a lifetime warranty, I might think about getting one. The overall experience at a range where most shooters are using cans is much better than the same range without cans.
 
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Tom, I can't do links from this tablet for some reason. Look at my stats and see a thread I started on can pricing. There is a link there. Please tell me what you think. I was shocked myself.
 
Silencers

A can is just what it is. Any body can make a silencer for cal. that is under
1080fps. The fitting of the can to barrel is only part that is critical. As far as
I know silencers have been legal for years as long as you went through BTAF
regs. I read that a empty can from GI issue m16 silencer will do a 22lr as far
as possible with single stage silencer. I got ahold of one when I was in Vn
It was burnt out from auto fire with GI ball. Never had the chance to try it out.
No parts or the subsonic ammo it was made for. The only reason for high prices
is what people are willing to pay. Shouldn't cost much more than a oil filter.
 
The oil filter adaptors can be found easy enough and there are intructions all over the net on how to build silencers so buy a stamp and make one.
 
My question is how can they afford staff, rent, and overhead at such small margins?
Click to expand...
You've stumbled on the True Secret of Firearms Retail. Margins stink. Dealers have to make up the shortfall by selling in volume and providing auxiliary services.
 
dogtown tom said:
The reason Cabelas and others don't get in the NFA game is the process......the dealer gets to sit on the silencer for as long as a year until the Form 4 is approved. Big box retailers would gag at that idea.
Click to expand...

Cabelas won't even sell real black powder because of the additional regulations.
 
I will try to answer the Ops question as best I can. We are a small (3 people) 07 Sot.
Places like silencershop are true Internet based businesses. Suppressors are either sitting in a room, or are ordered when needed, and shipped direct. Checking the form 3 when it arrives at your local dealer will answer that one. If ordered direct, they have no investment in the item beforehand, none. Staff is minimal, a few people in a room, or more likely, at home. I know one suppressor manufacturer we deal with whose sales people all work from home.
If they ship direct, and their sales people work from home, there is almost no overhead.
Second would be a room somewhere full of inventory, with one or two people to manage it, and some salespeople working from home. Hell, the inventory room could be at someone's home. Atf will give you a home based ffl if you meet the right qualifications.
No store, no high paid sales staff, just some guy filling out form 3s in a den and sending in credit card payments to the bank.
Suddenly, $20 per isn't so bad.
 
Why do none of the big boys of firearms retailing, like Cabelas or Bass Pro sell suppressors?
Click to expand...

Because they don't want to have to explain to folks how they need to get a lawyer to set up a trust; how to do the transfer paperwork and best of all, how you may be sitting around for 9 months waiting for approval......or......REJECTION.

Buying NFA is only for people who have the stomach and $$$ to jump through the red tape. Selling NFA is only for those who are experienced with Buyers who don't have the stomach and $$$ to jump through the red tape.
 
I've never heard of an application (filled out properly) that was rejected. Who is getting this raw deal?
 
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You don't get rejected.
No nfa dealer who is paying attention is even going to send in a form that would get rejected. It's like submitting the nics check after somebody answers yes to the " have you been convicted of a felony" question on the 4473. It's a non-starter.
Now, they may come back for a correction, but that is not a rejection. It also does not move them back to the end of the line. When it's sent back in, it picks up where it left off.
Nfa is a bit of a pain. You do have more paperwork and crap to deal with, it has to be perfect, and you sit on inventory for a long time with essentially a "pending" sale. Sometimes, you gotta tell somebody no, just because their cleo won't sign off. Then, you get into the whole trust thing.
For some, this is just all overwhelming. So, they say "screw it". Others say that because they don't want to wait.
 
I don't think it's a big deal for an average LGS to do. At least the one I dealt with. They answered all my questions, showed me the different models and I bought the ones I wanted. I paid up front, which I assume is normal practice. I mean, it's not the LGS's fault the Form 4 takes so long and that way they aren't sitting on a "pending sale" for months on end and they have the money to order more inventory. All they have to do is record the serial numbers, make sure your paperwork is in order, then stick the cans in a holding area until the stamps show up. It's not unlike when my customers need special-order parts. We charge them up-front for the parts and installation, then call them to set up the repair when the parts show. That way, I don't sweat if they take a few days(or weeks!) to do the job - I've already been paid and I don't have to worry about them backing out on it and leaving me stuck with a 25-30% restocking fee.
 
Paying up front is normal.
That said, we've been stuck a couple times now with items that don't even get started.
As in, nobody comes back to fill out the form 4. So here it sits, paid for, but no form filled out, taking up rather limited shelf space.
At the end of each year, it has to be counted, and taxes paid on it as inventory.
A lot of people don't realize that part of business. That each year, taxes must be paid on in Stock inventory. This is probably another reason big box stores don't mess with this. At any given moment, there'd be a large number of in process transactions that would still be counted as in Stock, even though it was sold, and taxes would have to be paid on those items.
So anyway, we paid taxes on one suppressor for 3 years before we finally just sold it, and now are sitting on another coming up 2 yrs, while getting excuses.
 
So, mostly, it's not really a pain, but sometimes it can be. It is more involved. You don't really make more money for your extra involvement, unless you've been in business a long time, and bought when things were cheap, and are now selling them off.
Basically, you do it because you enjoy it, just like anything else.
 
Gunfixr,

So is the margin literally around $20 or was he speaking figuratively?

Can you give us some examples of the typical margin on a specific silencer, such as the Octane 45 or Acc Tirant 9, which are both very popular?
 
Well, the op is comparing apples to oranges, unless he knows what the "other guy" is actually paying for the same suppressor.
An example: say I can buy "x" suppressor for $350, and sell it for $450. Dealer "y" is selling the same suppressor for $370. That means I must only make $20 on it to match his price.
What I don't know is how much dealer "y" is actually paying for the suppressor. He may be getting it cheaper. He may be getting it the same, but selling so Damn many that he doesn't care, and gets less per unit. He's selling so many because he's underselling everybody else by so much.
Most small shops try to make somewhere around $75 to $100 on the sale if possible. Sometimes they'll go down to $50 or so, especially for a regular.
Therefore, the cheaper they can get it, the cheaper they can sell it.
Really, gun or nfa, by the time it's ordered, paid for, shipped, opened, entered into the books, the customer does paperwork, background check done, item picked up by customer, paperwork finished, taken back out of books, several hours are consumed.
 
I don't own the shop, I am the gunsmith there. But, we do not sell anything at retail.
The owner marks up what he needs to make over whatever he can get it for, and will look to get what the customer wants as cheaply as he can.
We do get a lot of transfers these days. Often, it turns out that he could have sold the customer the gun for the same price, or maybe just a bit more, but still less than what the customer spent by the time he paid all the associated costs that come with a transfer. Talking about regular firearms. We've only had a few nfa transfers so far.
 
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