The Unintended Consequences of 41F and HPA

The Unintended Consequences of 41F and HPA

OP-Ed by: Aaron Bethlenfalvy, CEO and Founder of Alpha Dog Silencers

There’s no doubt that the suppressor segment has been hit hard by recent legislation. Last year’s 41F and talk of the Hearing Protection Act have both played a major role. Just how big was the impact and what can we expect moving forward from the guys who specialize in making things quiet?

Roll the calendar back to May of 2016, 45 days prior to Obama’s 41F executive order taking affect. The NFA branch was seeing approximately $1M per month of revenue from suppressor related tax stamps on a consecutive basis for the prior couple of years. That’s some pretty hefty cheese. So hefty, it covers 70% of the ATF’s overhead AND there was money left over which was shared with the Parks Department.

Step forward one month into June of 2016 and the NFA sees a massive spike in suppressor tax stamp revenue. It surges to $1M per DAY for approximately one month prior to 41F’s initiation date. WOW. More suppressors were sold in 30 days than the NFA would normally see in a year.

The suppressor segment was on fire, right? Not so fast…

“Demand” for suppressors didn’t grow in the course of a few months. It most certainly didn’t increase by 30x. Demand was simply pulled forward. Everyone who was thinking of buying a suppressor in the future purchased one to avoid an overly complex purchase process. Simple math indicates that nearly 1.5 years worth of demand was pulled forward into the month prior to 41F’s initiation date.

The effects of this started mid July of 2016 when suppressor sales began to plummet to levels not seen for over a decade. Most manufacturers, however, were busy celebrating the category success with champagne that flowed from the heavens and focused on rebuilding supply levels while conspiring to heavily promote their Hearing Protection Act (HPA) legislation which would remove suppressors from the NFA.

Promote they did! They promoted the HPA so well, most people had heard about it by SHOT show 2017. Most dealers that weren’t currently Class III were shopping the category with a high degree of certainty that they will be able to sell these hot commodities in the very near future.

What has become very clear, however, is that the HPA has had some very unintended consequences for the suppressor segment. On top of 41F pulling forward approx. 1.5 – 2 years worth of demand, we’ve now made the remaining potential suppressor customers believe that suppressors will soon be tax and wait time free in the very near future. So, they are all “Waiting for the HPA” before they purchase.

The sad reality is that no business can survive with such a tremendous nosedive in sales. The true unintended consequences of 41F and HPA are yet to be seen. Most of the smaller manufacturers will likely be forced out of business. The larger manufacturers will go through lay offs. Suppressor innovation will dwindle. Advertising will slow, forcing a lesser amount segment coverage. Industry lobbying groups will receive fewer donations from suppressor manufacturers and your constitutional support network will suffer as well.

The Leftists must be beaming with joy over what our industry has done to itself.

I encourage each and every person who reads this to think rationally of the bigger picture here.

Congress is very unlikely to give up $15M per year revenue, which funds 70% of the ATF. Even if by some miracle they decide to pass the HPA, the final legislation won’t resemble its current form. You ARE going to pay a tax because they are not going to lay off the majority of the ATF (which your stamps pay for). You are NOT going to get a refund since your tax stamp money was already spent on salaries and overtime for the people to approve your Form 4.

The longer you hold out on the purchase of a suppressor the higher the likelihood of severe damages to the suppressor segment. Yes, it would be nice to not have to pay $200 and wait 8-10 months to take possession, but is it worth it if it comes at the expense of quality manufacturers to choose from? More manufacturers will lead to a price war and the race to the lowest price is a losing proposition that leaves consumers with inferior product.

**End of Guest Post by Aaron Bethlenfalvy**

Are you negatively impacted by “the HPA effect”?

Gear-Report.com is leading a push to educate consumers about the legal and market impacts that are strangling many of the great brands in the firearms sound suppression industry. Contact info@gear-report.com so we can tell your story and educate consumers on the real impacts of waiting for the HPA to (hopefully) pass.

Buy suppressors online

"I Hear That!" - Hearing Protection Act Chances Low In 2017 - Gemtech GM-45 on ar15 in 300 BlackoutYou can legally purchase silencers online and have them shipped to your local SOT FFL, who will help you with the ATF Form 4 transfer process. Here are some links to trusted retailers who sell suppressors.

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About Jeff

Jeff is the Editor in Chief of Gear Report and a National Shooting Sports Foundation Media member. He reports on the outdoor industry, reviews gear for camping, hiking, shooting, hunting, paddling, backpacking and other active pursuits.

A USAF veteran, Jeff earned a MBA in Marketing and Health Services. He specializes in consultative selling and internet marketing. As the VP of BD & Marketing, Jeff provides sales and marketing leadership to MGECOM, Inc. and helps http://MGECOM.com acquire new clients in need of solutions for online merchants in need of Affiliate Marketing program management.

Jeff founded and manages Cress Sales & Marketing LLC, offering online sales and marketing consulting and services to online merchants and service providers.