GunBroker.com on Target for Continued Growth

Like any online business, Steve Urvan has seen a slowdown in recent months. But something happened around election time. Beginning just before Barack Obama was elected U.S. President, and just after, he experienced an uptick in sales of his online marketplace's primary commodity: Guns.

The reason is uncertainty about the future. But not economic uncertainty. "Gun control is one of Obama's stated campaign goals, and there is an assault weapon ban he might resurrect," explains Urvan, CEO and founder of GunBroker.com, a site that will soon celebrate its tenth year as an online marketplace.

Urvan launched GunBroker.com on March 15,1999. It's no coincidence that about three weeks earlier, eBay had stopped selling guns on its site. "At the time, eBay was concerned about their liability, even though guns were a tiny fraction of their revenue stream," says Urvan. "The bigger you are, the more you are a target. The equation is different if all you do is gun transactions."

Because GunBroker.com is a relatively small operation and because it focuses solely on guns, it focuses on operating its business in compliance with all firearms regulations. And with more than 1.1 million registered users and close to 2 million unique monthly visitors, business has been good indeed.

"The fact is that gun online sales are perfectly safe and legal," Urvan emphasizes. "Federal law states that guns have to be shipped to a licensed dealer in the buyer's state of residence, then the buyer must present ID and pass a background check to get the gun. The process is the same for online or mail order sales as it is for in-store sales."

Because of these regulations, persons who purchase firearms on GunBroker.com have to go through an intermediary. They can't simply buy a gun directly from another individual or business. The item has to be shipped to a licensed dealer near the buyer's home - usually a gun dealer. The buyer goes to the dealer, passes the background check, and only then receives the item.

This extra step hasn't slowed sales. In fact, Urvan says his biggest challenge has been dealing with a growth rate of 35 percent per year. "We constantly update our technology and security infrastructure to keep pace with the latest demands, requirements, and best practices."

Urvan has the background to keep up with the changes. He was director of engineering for a publicly traded company prior to founding GunBroker. He lives in the Atlanta area and will only describe his age as "Generation X."

You might wonder why anyone would buy or sell gun online. The answer is the same as with other types of merchandise: sellers make their inventory available to a far wider set of potential buyers than they would otherwise, and buyers can access a larger selection than they would find at their local gun store. GunBroker.com is especially popular with collectors who are looking for rare and antique firearms.

One of the most expensive items on the site sold for $140,000, Urvan reports. Hand-engraved guns from the Old West days sell well on the site. But perhaps the most unusual sale was that of an AR-15 assault rifle, pink in color. It raised $3,750 for breast cancer awareness.

Urvan, who says is business early in 2008 "has been terrific," said he expects lower sales next year due to the downturn in the economy. But he foresees a steady demand for firearms in the future. "One thing about guns is that, like cars, they are durable and last a long time," he says. "Certainly, if you want a garden variety item you can get something at your local store, with an instant background check. The bidding and payment process on our site is not quicker, but our people tend to be interested in collectors' items and guns that are out of production, like the old Winchesters."

One common misconception he wants to clear up about GunBroker.com is this: "Some people believe that you can order a gun online and have it shipped to your house with no questions asked and no paperwork. That is absolutely untrue. Gun sales are highly regulated. By Federal Law, any gun you buy has to be shipped to a licensed gun dealer and you must go to that dealer's business in person, produce identification, fill out paperwork called a 4473 form, and pass a background check. The process is no different buying on GunBroker than it would be buying a gun at a gun shop. GunBroker's value-add is a huge selection of guns for sale, not the ability to buy illegally or circumvent the law."

More information about selling on GunBroker is found in the site's tutorial.