How Firearms Reach Consumers: A Unique Supply Chain Compared to Other Industries

JACKSONVILLE, Fla. — May 17, 2025

The journey of a firearm from the factory floor to the hands of a consumer is a complex process, distinct from many other industries due to stringent regulations, cultural significance, and a unique distribution model. While the firearms industry shares some similarities with the automobile industry, its supply chain remains unique. At Derya, we focus on manufacturing high-quality firearms, working with three key distributors—RSR Group, Sports South, and Lipsey’s—to reach dealers, highlighting the industry’s reliance on distributors despite trends toward direct-to-consumer (D2C) sales in other sectors.

Firearms manufacturing begins with companies like Derya, producing rifles, shotguns, and other firearms. Unlike most consumer goods, firearms face strict federal and state regulations enforced by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). They must pass through licensed entities, creating a multi-tiered supply chain: manufacturers, distributors, dealers (Federal Firearms License holders), and finally consumers, who undergo background checks via the National Instant Criminal Background Check System (NICS).

The automobile industry is the closest parallel to firearms, with both involving complex manufacturing, regulatory oversight, and dealership models. However, firearms have smaller price tags—ranging from hundreds to thousands of dollars—compared to cars, which often cost tens of thousands. Firearms also face stricter transfer regulations, requiring background checks for every sale through a licensed dealer. In 2020, over 19.5 million firearms were sold in the U.S., reflecting higher transaction volumes than automobiles.

No industry perfectly mirrors the firearms supply chain. Consumer electronics rely on D2C sales with minimal regulations, while apparel and household goods lack the legal oversight of firearms. Even regulated industries like alcohol and tobacco don’t require background checks or licensed intermediaries for every transaction. The firearms industry’s reliance on distributors is distinctive, generating over $15.2 billion in revenue in 2021, with distributors connecting manufacturers to over 36,000 dealers nationwide.

Unlike industries disrupted by D2C models, such as Tesla’s direct car sales or Amazon’s e-commerce, the firearms industry relies on a “two-step” distribution model: manufacturer to distributor to dealer. Key factors include:

• Regulatory Constraints: Federal law mandates FFL transfers, limiting D2C opportunities.
• Distributor Power: Distributors like RSR Group, Sports South, and Lipsey’s offer vast inventories and same-day shipping.
• Economies of Scale: Bulk purchasing reduces costs for dealers.
• Specialization: Distributors provide exclusive models, like those from Lipsey’s, valued by enthusiasts.

Direct resale, where manufacturers sell to dealers or consumers without distributors, is growing but limited. Platforms like GunBroker and Davidson’s Gallery of Guns enable direct ordering, but distributors remain central due to regulatory complexity and logistical advantages. The firearms market is projected to reach $76.3 billion by 2033, with indirect sales growing at a 6.9% CAGR.

At Derya, we prioritize manufacturing excellence, producing high-quality firearms like lever-action shotguns. While we could expand to more customers, we focus on quality and work with RSR Group, Sports South, and Lipsey’s to reach dealers efficiently. This model ensures compliance with ATF regulations while allowing us to concentrate on craftsmanship.

The firearms supply chain, driven by regulation and tradition, is unlike any other industry. While sharing traits with the automobile industry, its smaller price points, stricter oversight, and cultural significance set it apart. Distributors like RSR Group, Sports South, and Lipsey’s remain vital, even as D2C trends reshape other sectors. At Derya, our focus on quality and strategic partnerships ensures our firearms reach consumers reliably and responsibly.

Headquartered in Jacksonville, Florida, with operations in Türkiye, Derya is a leading manufacturer of high-quality firearms. Visit www.derya.us for more information.