AR prices

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Redfisher60

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How long will these lower prices continue? I am thinking of getting another one before they go up.
 
This is just my opinion, but I think that under the current president, we are going to be good for a while. I think that the panic buying during the election made parts and complete rifles scarce and therefore more expensive due to demand and people willing to pay for them. I can't give you a time line, but don't foresee them skyrocketing any time soon. Of course if you have the funds, having a spare is a nice plan.
 
a-sheepdog said:
This is just my opinion, but I think that under the current president, we are going to be good for a while. I think that the panic buying during the election made parts and complete rifles scarce and therefore more expensive due to demand and people willing to pay for them. I can't give you a time line, but don't foresee them skyrocketing any time soon. Of course if you have the funds, having a spare is a nice plan.
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It was actually the exact opposite. All the panic buying over the last four years has created an economy of scale we will likely never see again. Now that the panic is over for the next 3-8 years, production of AR components will return to pre 2008 levels, and likely drop well below them, and the prices will go back up.

Another thing that will happen is that as demand slows down distributors and retailers will have to raise prices again. They have to make a certain amount of money to keep the doors open, so they either have to sell a bunch of rifles at low margins or a few rifles at higher margins. When they're selling ARs all day long they don't mind taking 10%, but when it's only a few a week they're going to want 20% just to make it worth their while to even stock them on the shelves.

So buy up if you want them because once this overstock runs out prices will rise again, and may even rise before the overstock runs out if demand gets so low that they can't move them at rock bottom prices. My gut instinct is that prices still have a little ways to go, but when you have a 700 dollar gun selling for 350 then how much lower can they go before everyone decides to just hold onto them and wait it out? If they can't at least break even, and they aren't in dire need of money, they might just hold onto them for the next election.
 
Hard one to call. The subcontractors are producing parts at a breakeven they can live with. Those production numbers are often not very scalable. It's really hard to schedule factory work and arbitrarily say a given run of parts will be 50 hours a week or 30 hours a week. You have to produce parts with a given number of machines, a gven number of machinists, and given amount of time.

So, this may be the profit economy. At least until some other environmental factor intervenes.
 
grampajack said:
Another thing that will happen is that as demand slows down distributors and retailers will have to raise prices again. They have to make a certain amount of money to keep the doors open, so they either have to sell a bunch of rifles at low margins or a few rifles at higher margins. When they're selling ARs all day long they don't mind taking 10%, but when it's only a few a week they're going to want 20% just to make it worth their while to even stock them on the shelves.
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Prices do not go up as demand reduces. Retail mark up doesn't follow demand - shops make their mark up when they can (high demand), and sustain their mark-up high when demand slows down to help cover their inventory costs.
 
It's just a perfect example of supply and demand. They ramped up production during the scare. Now there's a ton of parts out there sitting on shelfs that need to be sold before they become obsolete. Too bad that too many people ramped up production of obsolete parts.

I'm watching a ton of rails and barrel types becoming near worthless that were cutting edge tech 10 years ago. A perfectly good m4 profile or gov't profile barrel is worthless for example. $80 tops. A $400 M4 is nice for new shooters, but compared to the new stuff.....

The new, cutting edge tech will continue to carry decent prices. Like sub moa pencil barrels with fat bases.
 
Varminterror said:
Prices do not go up as demand reduces. Retail mark up doesn't follow demand - shops make their mark up when they can (high demand), and sustain their mark-up high when demand slows down to help cover their inventory costs.
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Each spot on the shelf of a retail gun store costs a certain amount in rent, employees, etc. Every gun on the shelf has to pay its rent in one way or another. If they're selling 10 a day they don't mind cutting their margins a little, as just about every LGS has done across the board in the last 8 years. I've watched prices at my LGSs go from 20% above internet to on par with it. When you have endless supply and endless demand, you can survive on very low margins.

When you have limited demand, even if supply is still unlimited, each gun still has to pay its rent on the shelf. If that spot on the shelf costs you $10 a day to maintain and you're only selling one AR a week, the conclusion is obvious. You either stop stocking that gun and replace it with something else, or you raise the margins until it's worth your while to keep it there. When you get right down to it, LGSs are brokers, and they don't work for free. I'm not saying LGSs will stop stocking ARs, but they will pare them down and raise their margins.
 
They stop stocking AR's. We've seen it. I run a couple businesses of my own, which have included my own gunshop in the past, I know about inventory cost and control, btdt.

I'm sure some shops are foolish enough to price themselves out of sales by gouging margins to make up rent, but raising prices against a low demand item is what it is - foolish.
 
There's actually still a decent market for the higher end stuff; it's more basic rifles that the market is flooded with. I expect some companies may fold, but big boys like PSA are obviously doing OK, even selling at rock bottom prices. I can't imagine their average gross profit per rifle, including kits or uppers & lowers bought separately, is much over $50, but when you're moving thousands of units and the man hours in each one are to the right of the decimal, it's still profitable. Walmart type economy of scale.

I don't think we'll see them drop much lower, but I expect prices will hold for some time. Trump's win was a double edged sword for the industry; it ensures that there is an industry, but it also knocked the bottom out of the market. People no longer feel pressed to "get it while they can", so now they'll get it when they can, which means when it's a comfortable purchase, or the deal is just too danged good to pass up, like being able to put a basic .308 together from PSA for under $500 shipped.
 
I think the point is that it can become cyclical. Costs are less driven by retail factors than it is driven by manufacturing an commodity factors. Retailers and producers will only continue to sell and produce products that produce a profit. This happens in commodities all the time, and AR parts have become commodities. When there is steady growing demand you get lots of people producing X commodity. Particularly so during very high growth opportunities. Lots of new producers of a given commodity will show up to meet the demand. Then you have a sudden drop off in demand, and now you have huge inventories. In order to maintain demand, commodity producers reduce prices to low or near negative margins as to not lose their investment. Producers begin to slow production on low profit commodities and shift to producing other higher margin commodities. The producers than can't adjust go out of business. With inventories dwindling you see a lack of availability. Those who are still in business that have the capability to produce will now only do so if it is as profitable as producing other products, so commodity prices rise. By this time consumers are ready to pay higher prices. Often because the first to return to generate serious demand are new consumers to the market. Former consumers may have their own inventory of these products and stopped purchasing because they didn't need or want more. Those who are continued consumers are tired of seeing "out of stock" everywhere and they are just happy to be able to get the product at this point. Thus, their willingness to pay more and why product prices will increase.
 
Varminterror said:
They stop stocking AR's. We've seen it. I run a couple businesses of my own, which have included my own gunshop in the past, I know about inventory cost and control, btdt.

I'm sure some shops are foolish enough to price themselves out of sales by gouging margins to make up rent, but raising prices against a low demand item is what it is - foolish.
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Some things they have to keep on the shelves just because, like Glocks and ARs. If this were a Kahr or something we were talking about, then yes, they would simply stop stocking them at this point. A LGS without a single AR would be like one without a single Glock. It would be like if McDonalds stopped serving hamburgers, and if you ever see that you know they're days away from going under. ARs are to guns what hamburgers are to fast food. If you see sales of hamburgers going down, you can bet fast food in general is going down. The same is true of guns. If you see AR prices suffering, you know demand for guns in general is suffering.

Mark my words, though, prices across the board will go up, and not just on ARs. And people will very likely go out of business, as well, or scale back dramatically. Manufacturers, distributors, and retailers are all pretty much at rock bottom; each one is selling as low as they can without going in the red. And demand is still dropping. Whenever they lower prices, they create a little bit more demand, which is exactly what we're seeing right now, but it can't continue. At some point they're going to hit absolute bottom and still not be able to move the product, the market being so saturated that they can't sell them at break even prices. So they have to stock a few just to stay in the game, they're not going to sell high volume anyways, so they have nothing to lose by raising their prices. Again, they're brokers, and you the customer have to pay them what it takes for them to get whatever you want. If that is no longer possible, then they take their money and go somewhere else.

However, guns will always be a popular commodity. Demand may return to what it was 10 years ago, or even dip below it for a while, but guns aren't going anywhere. You're just going to see the market scale itself back, and with that loss of scale will come higher prices. Just like we had 10 years ago before all this craziness started.

MachIVshooter said:
There's actually still a decent market for the higher end stuff; it's more basic rifles that the market is flooded with. I expect some companies may fold, but big boys like PSA are obviously doing OK, even selling at rock bottom prices. I can't imagine their average gross profit per rifle, including kits or uppers & lowers bought separately, is much over $50, but when you're moving thousands of units and the man hours in each one are to the right of the decimal, it's still profitable. Walmart type economy of scale.

I don't think we'll see them drop much lower, but I expect prices will hold for some time. Trump's win was a double edged sword for the industry; it ensures that there is an industry, but it also knocked the bottom out of the market. People no longer feel pressed to "get it while they can", so now they'll get it when they can, which means when it's a comfortable purchase, or the deal is just too danged good to pass up, like being able to put a basic .308 together from PSA for under $500 shipped.
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I think so, too. I still have trouble finding high end parts sometimes. Matter of fact, I think we may see an increase in demand for higher end stuff, as all these people who got into the market with Deltons and Ptacs will be wanting nicer stuff, at least the ones who stay in the sport.

With loss of scale, 500 dollar ARs will also be a thing of the past, and quality across the board will go up as a result. I think Colt will be the new Delton 10 years from now.
 
How long will prices hold? Probably until 6 months before the next election when gun show sales people, internet sites, and advertisers start working the fear factor and panic mode kicks in again. But any sales will probably have to be to new owners because every current shooter is now sitting on how many? lol
 
We'll always have sub $100 mosins and SKSs. Surplus rifles and surplus ammo are cheap!

Prices will go up. Odds are, people are trying to cover costs in the hope that others will drop out of the market. Several years ago, $600 was a really low price for an AR now you can get them at $400. If you want something buy it. I really hope EBITDA stays high at work and we get a good bonus next year before the elections......
 
I think that all "things" get priced based upon what people are willing to pay for them; the price for an AR will go up or down based upon that desire. I cannot say when that desire will change - too many contributing factors. Like the stock market - get in or get out as your instincts tell you. If everyone is buying, then sell; if everyone is selling, then buy. The "market" is signaling you to buy right now. Good shooting.
 
Redfisher60 wrote:
How long will these lower prices continue?
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Hard to tell.

The reduction in prices has brought purchasers into the market who could not participate at the higher prices. How many of them are there? Will they spend on an AR as opposed to a new dryer or a new set of tires? Also, how long can the niche manufacturers survive selling guns at or near the cost of production?

When you see the less well known manufacturers (the ones that are not subsidiaries of another corporation) closing their doors, then you will know that a change in the marketplace landscape is coming and that manufacturers like Colt, Ruger and S&W are going to be able to start exercising some "market power" so that the "race to the bottom" is pretty much over.
 
BobtheTomato wrote:
We'll always have sub $100 mosins and SKSs.
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Where can I get an SKS for less than $100?

Seriously, I want to know so that I can order a couple and give dogtowntom some business.
 
We'll always have sub $100 mosins and SKSs. Surplus rifles and surplus ammo are cheap!
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I think that was meant in jest, but was thought at one time to be true.

I agree, though, that Mosin rifles below $250 and SKS rifles below $300 are no longer the norm.
 
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