Ammo And Related Sales Figures Soar

Photo by David Levêque on Unsplash

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Although as it stands no national registry tracks the exact number of firearms bought and sold in a year, the FBI’s National Instant Criminal Background Check System (NICS) numbers are a good barometer. The FBI began reporting these numbers in 1988, and in 2019, these numbers capped out at 28.4 million.

But once the pandemic began, the numbers exploded.

With a roughly 30% increase in a single year, 2020 blew the previous record out of the water with 39.7 million. When the real impact of COVID was first felt in the U.S. in March of 2020 as lockdowns began, the U.S. set a single-month record of 3.7 million checks. This pace has largely continued with 2021 seeing nearly the same numbers – 38.9 million.

Background checks do not necessarily correlate one-to-one with a gun sale – some are run for permits and other reasons that don’t necessitate a sale. However, multiple purchases can be made with one check. For the record year of 2020, the National Shooting Sports Foundation (NSSF), a trade organization, estimates 21 million people made a purchase of one or more firearms, a 60% increase over 2019.

And almost 40% of these people were first-time buyers.

Pandemic Security Fears?

No one can say for certain what is driving the momentum, but a reasonable explanation would be the fear, anxiety and uncertainty the pandemic and civil unrest has caused.

Whatever the reason, consumers interested in protection or sport shooting represent good news for those in the business of manufacturing and selling guns and ammunition. Led by the likes of Winchester and Federal Premium — owned by Vista Outdoor Inc VSTO — the industry made about $18 billion last year, according to a report by IBIS World.

Running concurrently with this trend of increased purchasing is the consumer desire across markets to make their purchases online. E-commerce has made the acquisition of Gunbroker.com by the munitions company Ammo Inc. POWW, a potentially lucrative move for the company.

Gunbroker.com sits at the nexus of these two market trends. It is one of the leading online marketplaces for the legal sale of firearms, ammunition and accessories, with over six million registered users. The website adds a major direct revenue stream for the company. Ammo acquired Gunbroker for $240 million. $50 million in cash, $50 million in assumed debt, and 20,000,000 shares of AMMO Inc. stock. Its 2020 EBITDA was $40 million.

If you are interested in learning more about the company, check out https://ammoinc.com/.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

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