AMMO Inc’s Jarad Smith on Ammunition, Gunbroker and Change

Our sister site, QA Outdoors recently sat down with AMMO, Inc. CEP Jarad Smith and talked about the challenges facing the ammunition business as well as the company’s ownership of 

QA Outdoors: Jarad, a little over a year since the last time we sat down and talked. You’d just joined Ammo, Inc. What have you seen a year into the job? How’s how’s the world? What have you picked up?

Jarad Smith: You know, 2023 was a tough year for the industry. Lots of inventory retail, lots of inventory in the warehouses inflation reduced wallet share out there for firearms and ammunition and the business had to transition and transition quickly.

The first six months at Gunbroker as president and COO you know, we put in core processes to change the business; proper SOP process for sales and forecasting. We really worked hard at better cash flow, management of inventory; then realigning the ammunition business around OEM and strategic brass cells.

We found more business and more opportunity than we’ve been able to execute on. We also flushed out a lot of slow moving product in 2023 on the ammo side of the house. So I think the re-presentation of Ammo, Inc. to the market post-COVID was a success.

We’re in the process of rebranding. We’ve realigned the factory. We’re starting to work through the constraints in the manufacturing process to bring that plant to scale. But it’s fun. It’s a one-and-a-half year-old ammunition plant competing against companies that have been in business for 140 years.

There is still a ton of work to be done in the supply chain for some of the energy components in the industry. Today, primer demand’s at an all time high. And there’s not enough propellant out there to service the market going forward due to shortages from the Ukrainian war and an artillery war for the first time in I don’t know how long. So…from an ammunition perspective, I think we’ve had huge success at establishing an international client base, re-establishing our relationships with all the OEM manufacturers that AMMO, Inc. left back going into COVID in 2020 and 2021.

We’ve realigned the business for bottom line profitability and realigned the entire management team on bottom line profitability versus top line growth.

I also think we’ve made the right business decisions from a perspective. I inherited a very talented team that had a key position in the U. S. firearm space. Today, it’s still the 600 to 900 pound gorilla.

We just had to find the right partners to enable us to take Gunbroker and make it something more. We had to bring Gunbroker into the 21st century, and I still think we’re on the path to do that.

So when we first came in, we said we needed to to ‘get a cart up and working to allow a firearms buyer to check out with all the accessories that are necessary’ to really kick out the firearm business. We needed a payment application that matched the 21st century. And I think we’re well on our way to that roadmap, but it took us probably six to nine months longer than we would have liked.

QA Outdoors: Banking is hard now…

Jarad Smith: It’s hard and in this industry…finding the right banking partner that supports this industry is difficult.

QA Outdoors: Jamie Dimon — who touches about 78% of all the people who bank in the country — who is not a pal of the gun business. Yet he says, ‘I know we’re missing an opportunity,” but works against the gun industry.

Here in Tennessee there’s a measure sitting on the governor’s desk right now, waiting for Governor Bill Lee’s signature. It’s a law that prevents coding — whatever you call it — to an audit banking transaction so you can track ammo and guns.

Jarad Smith: That’s right. Ultimately, it’ll be down to the state levels. You have states where it’s relatively business friendly, but we’re looking at interstate commerce, and shipping guns nationally. It’s difficult and it will continue to be that way. Our biggest hurdle going forward is navigating the state and federal laws to have a compliance solution.

Then making sure that you’ve got a software solution, and a flow of funds from a consumer to wherever that money is being parked, and then back out to that seller community.

We’ve articulated our go-to-market strategy late from 2023. I think the sellers in the community on Gunbroker have rejoiced in our decision on how to do that. We’re still working on the tools to empower smaller seasonal sellers – one-time sellers – on the platform.

I see Gunbroker today and think the vision is bringing the platform, the “look and feel” of Gunbroker into the 21st century. The software code – the tech – is secure as ever.

Now that we’ve empowered the ability to cart up multiple items, from multiple sellers, and to pass that credit card information onto those sellers so that they can integrate the sales info into their back office solutions and manage their inventories that sit inside their own point-of-sale solutions, I don’t think they could be any happier.

QA Outdoors: How many different POS systems are there? Too many?

Jarad Smith: There are different POS systems. And each POS system supports a different credit card process. So it’s supporting all that API framework so that when we take a credit card, we’re passing on the 80 to 85% to the seller community out there. Our team has done a great job at that. Fortunately, I don’t have to do any of the work, I just get to articulate what they’re doing.

QA Outdoors: There’s a lot of code base under there.

Jarad Smith: Yeah, a lot of coding. On Gunbroker going forward, we’ve chosen not to sell ammo and brand our own branded stuff on Gunbroker because we want Gunbroker to be a true marketplace.

QA Outdoors: You have to be agnostic?

Jarad Smith: You have to be agnostic. We want the Winchesters, the Hornadys, the Federals, the Fiocchis, the Berettas, the Normas of the world to know that..and the CSG’s, the CZ/Colts. We want all these players to be able to use Gunbroker as a true marketplace and not feel like one company or another has an edge. So every time those opportunities come up, they see an opportunity to make margin and think, ‘Hey, there’s a long term play here.’

We’ll continue being a unifier to the community. I think through the content that the team has built around the ‘No Low Ballers” podcast and really starting to reach out across all channels, to reach deep into the vaults and the historic knowledge of the historians in this space.

QA Outdoors: So you’re starting not just looking to conduct commerce with the community, you’re starting to speak to it, right?

Jarad Smith: Yeah, and we want to pull in that community that cares. We all have different passions, whether it’s duck hunting, or deer hunting, sporting clays…whatever it is. It’s really getting the knowledge experts onto the platform to start speaking and telling the story and getting Gunbroker to be that place where you wake up at five o’clock in the morning and you open up Gunbroker and check the latest content to know what’s in season and what new item’s up for auction. All that.

QA Outdoors: That sounds good until the phone rings at 4:30 in the morning and it’s a CEO telling you that he didn’t get his Outdoor Wire and wants to know where it is. Every upside has as a moderator with it. I know exactly what you’re talking about in when you talk about trying to speak into the marketplace. But it’s hard to develop a voice. It’s hard to develop a voice that’s right. And you can’t develop a voice every time.

Jarad Smith: Sometimes you use the loudest voices out there and invite them to your platform.

QA Outdoors: Sometimes you can whisper and people listen, too (laughing).

We’re not going to talk stock specifics, but it would seem Wall Street’s fairly happy with you guys.

Jarad Smith: They are. I think having somebody from the industry that can just speak to what’s happening is a huge help because the people that are investing and people that move the stocks are your Black Rocks and your other big Dow Jones, NASDAQ, Russell 2000 investors. They’re in that space no matter what and they take up a big chunk.

But the piece that moves us is our people, people who are passionate about this industry. I think when you can get on the phone and tell them what’s happening in your business, and speak to them about the future direction of where the company’s going, there’s really nothing but upside from there.

At the end of the day, we are producing rifle brass casings, and pistol brass casings. And through proper manufacturing and operational excellence, we’re going to make money. It may not be this year, it may be next year. But we’re gonna make money. And the stock has reflected a very devalued price. If you look at the profitability of Gunbroker, we’re making money. We just gotta get the noise out of the way and really focus on the core aspects of the business.

Gunbroker is a behemoth, but it’s done one firearm at a time, and has been for the last 20 years up until February of this year. Now it’s really just allowing the team to go out and tell that story.

QA Outdoors: Blocking and tackling.

Jarad Smith: Blocking and tackling. It really is that simple.

One Response

  1. Hey Jarad, maybe do something about keyword spamming on GB, would be nice not to see a Hotchkiss Portative feed block tagged with every major friggen small arm used from 1939-1975 in it

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