LGS's that fear gouge. Would or will you go back?

LemmyCaution said:

Let's say the panic subsides, and M&P15 Sports are again selling for $600-700. Is the one in the shop going to still be marked at $3000 (reflecting the dealer's supposed acquisition cost), or is it going to drop back where it was the day the shop owner took the $650 tag off and put on the $3000 tag?

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Are you suggesting a profit margin cap? That's about a step short of total (aka Government) price controls.

There's nothing that says a seller can't strive for maximum margin on items he sells. In fact, that is exactly what he should do. If it's marked above what the market will bear, he either marks it down or accepts it into permanent inventory.

If you had an item to sell on eBay, and the price escalated to way over what you thought it would bring, would you contact the buyer and have him send just the amount you thought you'd get? Or would you happily take the money that the item was considered to be worth by that buyer? If you say you'd take that windfall, you're just like the guy with the M&P15. If you say you'd discount the item back to a price based on your acquisition cost, you're nuts.

There is a gouging and there is insuring he both has the funds available to replace them and the operating budget to stay in business with reduced inventory moving.

53 dollars doesn't seem like a gouge, it seems like a realistic price increase.

200 dollars is price gouging. 130 for a beat up issued AR mag is price gouging. 53 bucks? Sucks, but I'd not call that gouging.

I visited Kames Sports this week and was appalled. I've been going there for a long time and they have the best prices that I can find, that is until this week. When I went in and seen Tapco AK mags going for $55 and Thermold AR mags (the ones they give away free when you make a purchase on the net or are $5 or less on CDNN) for $40 I just left. I will not go back. I find it sickening. Two weeks before the prices for such things were the same as always, I picked up the Tapco AK mags for the everyday price of $16.99 a piece (more than they are usually on the net at $11.99) and the counter person told me that they were not going to raise prices, gouging customers is wrong. Let us remember S&W, STAG, COLT, and every other maker didn't raise the MSRP and are not charging more for their firearms to distributors or gunshops. It is the distributors or gunshops that are gouging. PERIOD.

This week I asked what happened. He said he didn't know what happened he said he came in last week and the price changes were already taking place. He said the owner didn't want to miss out, especially when other stores are making so much money. I understand raising prices, but tripling them is crap. I won't shop at Kames again. You can go up a little but this 200% or higher increase of prices isn't justified by the "I'm just keeping things on the shelf" argument. This will drive your customers away.

Have fun when prices go back down. You will not be open for long, as your previous customers like myself have found places like my 2nd favorite local gun shop that although the prices went up, they didn't go up any more than 20% to 30%. So when your greedy dirtbag owner suggests raising prices like Kames tell him you like having a job and if he likes having his business he won't screw over loyal customers. Keeping things on the shelves is an idiotic argument. Guess what, no one buying anything at all now because you've become a ridiculous moron will cause you to go out of business even faster.

You can go up a little but this 200% or higher increase of prices isn't justified by the "I'm just keeping things on the shelf" argument.

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Hey, guess what? You just found a case of AR-15 PMAGS in your basement. How much will you sell them for today? The current market price, or 20% over the price on 12/13/2012?

Made a stop at a gun shop in Central El Paso. A Wyndham (sp) AR for over $3200,Glock 19 mag for $99.95,Glock 20mag for $49.95, .223 no name ammo $1.00 a round,Remington UMC for $1.50 a round and the worse thing was CCI 325 round box of 22lr for $79.95. Ouch.

Yes, prices are ridiculous, because demand is ridiculous. Only a fool would buy now, unless he thought had to.

Don't be a fool.

I am of two minds on this. Normally I would think a standard markup over cost with an eye forward to replacing stock is reasonable, but when the buyer is apt to sell it for 2x on gunbroker then maybe it is time to share the profits.

If the gun shop picks the wrong strategy and pricing, the marketplace will decide if the shop continues to do business when things get back to normal.

Clutch

Some of these arguments I'm reading on this forum are ludicrous. People should pay multiple times the price of something in order to support a LGSs family and employees because they just aren't sure when they will get new supplied in stock? That ain't helping a LGS out, it's like a reverse Obamacare!

Having to charge a little more to cover the cost of buying new products that are suddenly being charged a higher price -- ok. Having to pay more for a product because it costs more for the LGS more to obtain it now than it did a few months ago -- ok. Private stores charging gunbroker prices just 'cause -- you can kiss my business goodbye.

Yeah, certain store in Jacksonville, Florida charging $5,000 for a Sig 716 rifle that was $3,800 two weeks ago, that was $3,000 a few days before that, that was $2,000 a month ago. You just lost my business forever.

Is it gouging or normal business? A common business model is to price your current inventory at the replacement cost of the item. That way, you have the money to restock.

It wouldn't surprise me that his restock cost for hi cap magazines is quite high with all the increased demand.

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That what I'm thinking. It would be nice to see what his supplier is charging him.

In the end, no one really wins.

Sell at pre-frenzy prices and brace for the lean times sooner.

Sell at hyper inflated prices and you soon find that there are a limited amount of folks who can afford a mid 2k AR or $5k FN Scar. You may sell your inventory, but now you are just as stuck as the first guy.

Unfortunately guns are not considered essential items for survival. Try price gouging after a natural disaster with gas, food or building materials and you will have the state after you, or at least in Florida.

Both are bracing for the inevitable...no inventory to sell.

Both are at the mercy of the manufacturers. The maket will even out when supply keeps up with demand, and the dealers who charged too much will make ammends with the buyers.

Want some good deals? Start combing the pawn shops when things get back to normal. Buyers will return to the gun store where he paid $1800 for a $800 AR and get offered $600.

A common business model is to price your current inventory at the replacement cost of the item.

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So in an environment when we don't know if supplies will return to normal in 6 months to a year, or if the item will be banned altogether, then the replacement cost would be Infinity. Since it is unknown what the replacement costs will be. Therefore charging the equivalent of a trip to Jupiter and back might be appropriate.

I'm friends with several LGS owners and their biggest worry is remaining open because of low stock availability/future of the gun market. When prices started going up one owner removed all the normal mags,ammo,and black rifles and said they were no longer for sale. He said he did not want to sell and item and then see the buyer making a huge profit when he sold it on GB. He was also worried about his own stock.
I have a question for the OP. Why were you buying the mags?
1--- your worried about getting them if they are banned? If so then you should have been prepared, knowing it was a possibility. If you don't like the price don't buy.
2--- you lost or other mags broke? If so they are worth $53

If you don't like $53, I bet you of find some 10 round mags for close to what you paid for before.


IMO,I hate to say it but it is only "gouging" if it is required for life.(food/water)
There is only a shortage for the unprepared.

So in an environment when we don't know if supplies will return to normal in 6 months to a year, or if the item will be banned altogether, then the replacement cost would be Infinity. Since it is unknown what the replacement costs will be. Therefore charging the equivalent of a trip to Jupiter and back might be appropriate.

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Might be.

But the flip side of that argument is that you have to find someone who will BUY IT.

As long as people are still paying what you're asking? You aren't charging too much. Period.

An item is only worth what someone will pay for it. Not one penny more, and not less. You, personally, don't want to pay a higher price today than you did yesterday, but someone else WILL, so they get the item.

No dealer will price a gun so high it won't sell. If it sells, that's what it's worth, today, to that buyer. Maybe tomorrow the same gun will be worth 1/6th that price. Is the gun dealer going to hold his maximum price while no one buys? No, because then he'd go out of business. He'll drop the price to find the "market" again.

Sales is a balance. You have to sell enough stock to keep the cash rolling in, but you want to get the most money for each unit sold. Set the price too high and you don't make enough sales. Set the price too low and you don't make enough money in total to keep the lights on.

Bottom line? If it isn't worth that price to you, today, don't buy it. Maybe you can buy it later. Maybe it will cost you more then, or maybe less. That's your gamble. Maybe the owner will make enough on his sales today to live through the lean times that may be coming (OR a glutted market where he can't GIVE ARs away for $600 like we had a year or so after the first Obama panic!) and maybe his guns are priced too high ... or low. That's his gamble.

Getting offended about it is kind of childish.

I'm glad I've got a few rifles and handguns and a thousand plus rounds of ammunition. Unfortunately, if prices continue in this nasty upward spiral, I can see myself down the road looking for another sporting activity. One that won't require a second mortgage. And I wonder how some buyers find the money to pay $3000 for a rifle they could have purchased a couple of months ago for $600. Are they going crazy in debt? And I can imagine a few strained marital relationships.

But for me, right now it's no more trips to the range.

My ticker has always been back orders or otherwise confirmed prices. those change you cannot be trusted.

Some of these arguments I'm reading on this forum are ludicrous. People should pay multiple times the price of something in order to support a LGSs family and employees because they just aren't sure when they will get new supplied in stock?

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Who said that? I certainly didn't. You'll pay what an item is worth to you. If the price is higher than its worth, don't pay the price. Simple.

Having to charge a little more to cover the cost of buying new products that are suddenly being charged a higher price -- ok. Having to pay more for a product because it costs more for the LGS more to obtain it now than it did a few months ago -- ok. Private stores charging gunbroker prices just 'cause -- you can kiss my business goodbye.

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"Just 'cause"?? Just 'cause that? Just 'cause the item is now worth more?

Tell me, if you owned a brand-new AR-15 today, say a model that sold for $850 on 12/13, and wished to sell it today, what price would you ask?

Yeah, certain store in Jacksonville, Florida charging $5,000 for a Sig 716 rifle that was $3,800 two weeks ago, that was $3,000 a few days before that, that was $2,000 a month ago. You just lost my business forever.

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Why are you offended? If it's overpriced, it won't sell. If it sells, it wasn't overpriced.

ToraBoraBlues said:

I avoid any place of business that tries to use high-pressure or cheap sales tricks. I don't think conning new gun owners is a good welcome or representation of our community either.

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Avoid? Yes.
Boycott? The answer would be no.

During the Great Ammo/Primer drought of '09 a local store got ahold of what they claimed was "pallets" of primers. They jacked the price up around $8-ish or so overnight. AND bragged about it.

Do I still go there? Yes. They have some great deals on consignment guns.
BUT... they have moved down to the bottom of my list of where to look for any sort of shooting/reloading supplies.

Not saying I would NEVER buy from "Less Expensive Than Soil" but IMO they're a disgusting mob and would be my absolute LAST resort.

If I choose to sell anything in this panicked atmosphere, you'd best believe I'd list it at the current market value, not the value of two months ago...

DammitBoy said:

If I choose to sell anything in this panicked atmosphere, you'd best believe I'd list it at the current market value, not the value of two months ago...

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Boy... I'm sure tempted to unload some stuff. What stops me is the argument that's been made already. How much would it cost me to replace it? WILL I be able to replace it?

I've kinda put away the torch & pitchfork. If somebody wants to pay $100 for an AR mag...

Someone posted 10 pmags for sale here this morning for $600. All the while westforkarmory is selling them here, still for $14.95 each.

I must have been in same store in Jacksonville. wanted to buy an m1a but his price for a standard was $4500,he did have two. I didn;t say anything other than no thanks. exercised my right to just walk away.maybe this summer prices will drop.

When I see a used AR that is in worse condition than if I were to drag one behind my truck for six miles,with a $1350.00 price tag I can't help but have a different perspective of the business. Doesn't mean I won't go back,but thats knowledge I'll use on the next visit. This is a product of a free market. But the result to me isn't any different than if there were fixed prices. Either way I would not view an AR as attainable at this time. With a fixed price, they would all be out of stock. As they are know as result of the panicked masses driving up the price I still consider them unavailable because I'm not willing to pay the increases. Only difference I see is a definite positive, at least with the free market I have and option if I'm willing to pay it. A free market is free at both ends, meaning that if you don't see it as a good deal you don't have to buy it.
On another note, you can easily figure if it is gouging or not by checking msrps. If they have not gone up then most likely the cost to the dealer hasn't ether.

"All the while westforkarmory is selling them here, still for $14.95 each."

They're sold out now and don't know when they'll get any.

"This item can be backordered, no ETA available, Ordering any color other than black may add months to your order!"

beatledog7 said:

Are you suggesting a profit margin cap? That's about a step short of total (aka Government) price controls.

There's nothing that says a seller can't strive for maximum margin on items he sells.

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I'm suggesting nothing of the sort. But you're clearly suggesting I am. I wonder what motivation you might have for so doing?

What I am explicitly saying is that the LGS has permanently lost my business.

Which belies your assertion that there 'is nothing that says that a seller can't strive for maximum margins on items he sells.'

Setting the price for a budget AR at $3000 has had the deleterious effect of losing a $500/yr customer for life. That would appear to be bad business sense. Particularly since no one is going to buy an M&P15 Sport for $3000. The LGS had racks of rifles and cases of handguns, and reloading components and holsters and targets and all sorts of plentifully stocked other products, and had plenty of customers for those products. He was in no danger of going out of business if he sold an AR for a reasonable markup.

He's not in any danger of going out of business because I refuse to shop there, either. But he's lost $500/yr, which will go to his competitors, and he's lost any referral business he used to get from me.

And isn't it a shame that this is the negative consequence of what we'll charitably term 'price discovery.' I'm not a free market capitalist. I'm not, in fact, any sort of capitalist. But I have money to spend on things, and how I spend that money is determined by factors unaccounted for by academic market theories, no matter how doggedly clung to they are.

Setting the price for a budget AR at $3000 has had the deleterious effect of losing a $500/yr customer for life. That would appear to be bad business sense. Particularly since no one is going to buy an M&P15 Sport for $3000.

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Got it. Again, I ask you: If you had a new-in-box, unfired M&P15 that you wanted to sell today, what price would you ask?