Suppressor Compliance and Trust Services Industry Analysis
Thesis: Against
The suppressor compliance and trust services sector is an attractive option for private equity investors, but a risky play for entrepreneurs. Over the past few years, suppressor purchases have seen unprecedented growth. More suppressors were purchased between 2021 and 2024 than the preceding 84 years. Consequently, suppressor compliance services grew in conjunction with the demand surge. This industry momentum is expected to continue, allowing for an opportunity for high returns in the short run. However for those focused on the long-run, such as entrepreneurs and search-fund investors, the underlying risks and lack of recurring revenue sources make it an unattractive option.
Market Overview
Firearm suppressor compliance and trust services is a niche subsector within the firearms market that offers a wide range of solutions for consumers and dealers to comply with NFA requirements when purchasing suppressors. Through several services, businesses aim to assist with creating and handling the numerous legal documents associated with purchasing a suppressor.
TAM
Total Addressable Market (TAM): The U.S. suppressor compliance & trust services sector is a relatively small but rapidly growing niche with an estimated base TAM of $34 million and CAGR of 20%. We estimate the TAM by considering the annual volume of suppressor transactions and the typical “attach rate” and fees for compliance services on each transaction:
● Annual Suppressor Transaction Volume: In recent years, suppressor sales have surged. Historically, only about 1.3 million suppressors were registered in the U.S. by 2017. By May 2021 that figure doubled to 2.66 million, and by January 2024 it reached 3.49 million[1]. Thanks to the new eForms system and reduced wait times, Americans purchased and registered about 2.2 million new silencers between May 2021 and mid-2024, an unprecedented surge[2]. As of July 2024, the total number of civilian-owned suppressors is roughly 4.86 million[3]. This means roughly 2.2 million suppressors were added in just three years (mid-2021 to mid-2024), eclipsing the number added in the NFA’s first 87 years[4].
● For TAM calculations, we use an annualized volume in the hundreds of thousands. While 2024 saw a huge spike (1.4 million silencers registered in the first half of 2024 alone)[5], that was partially a backlog being processed after eForms launch. A more normalized forward run-rate may be on the order of 500,000–800,000 suppressor transfers per year in the near term. This assumes continued strong demand but not every year repeating the extraordinary 2024 spike.
● Attach Rate of Services: Not every suppressor buyer uses an external compliance service, some may file on their own or go through manual processes. However, the attach rate has grown with the rise of streamlined platforms. We assume 50–80% range of suppressor transactions involve a paid compliance service or trust. This includes buyers who set up a paid NFA trust and/or use a facilitation platform. Given the dominance of Silencer Shop and Silencer Central in the market, this rate is likely high. A large majority of suppressor transfers now flow through specialized service platforms or dealers employing them. For instance, Silencer Shop alone has over 1,800 affiliated dealers using its system[6], which likely accounts for a substantial portion of all Class 3 dealers nationwide.
● Fee Stack Assumptions: The revenue per transaction can include multiple service fees. Trust setup fees typically range from $0 to $200. Fingerprinting and document processing fees might add $30–$50. Some dealers or platforms charge a separate filing or convenience fee ($25–$50) for handling the paperwork. In aggregate, an average customer using a full suite of services might generate on the order of $50–$100 in service revenues (excluding tax). For our TAM model, we assume an average of roughly $75 per transaction in revenue to the compliance/trust service providers.
Using...