Collusion among gun dealers at gun shows perhaps?

[JellyJar]

Take a look at this thread:

http://www.thehighroad.org/showthread.php?t=600280

This reminds me of a warning I heard about some people in the antiques business. Sometimes ( perhaps ) a group of antique dealers will get together and collude with each other to not bid high on valuable antiques at auctions. That way they can buy valuable antiques at low prices and in the process cheat people.

Reading the above thread it occurred to me that perhaps in this instance the dealers there may have colluded with each other to not buy guns for what would be a reasonable wholesale price and therefor cheat people.

Do any of you think this thing happens sometimes?

 

[oneounceload]

Not at all. If you have something that folks can resell, and it is popular, you'll get a good price. These guys are in business to make money, not be kind to you - they want to buy it as cheap as possible and sell for it as much as they can get - called profit - and since they are in competition with each other, collusion, especially at a gun show, is not going to happen.

 

[9mmepiphany]

I don't think they collude with each other...they would undercut each other in a moment if they knew what the other was offering...but it is likely that they are working from the same script.

As already said, they are in the business to make money. If they gave you what the gun was worth, they would be what they could sell it for, and they would be out the opportunity cost of tying that money up...and that is a very poor business plan

 

[Onmilo]

Just keep believing all dealers are against each other.
You wanna sell AR15s and I wanna sell M&P & XD pistols this show, lets talk,,,
Everybody knows everybody and everybody will generally match a lowball price unless the dealer is being stupid or desperate and giving stuff away just to move it.
When word gets out most everybody removes the hot ticket seller from their tables and let him have his fun.

 

[dogtown tom]

Onmilo Just keep believing all dealers are against each other.
You wanna sell AR15s and I wanna sell M&P & XD pistols this show, lets talk,,,
Everybody knows everybody and everybody will generally match a lowball price unless the dealer is being stupid or desperate and giving stuff away just to move it.
When word gets out most everybody removes the hot ticket seller from their tables and let him have his fun.

Seriously?
Dealers are there to make a profit off of selling guns. If I sell more guns than the next guy...good for me.

There isn't "turn taking" as to what guns are displayed for sale......thats just so ridiculous it defies any logical thought process. I would love to see what proof you have that dealers organize their firearm sales in such a manner.

 

[hermannr]

Trading guns is like trading coins. Dealers will always grade harder when buying that when selling and they all grade off the same sheet..

That is where "slabbing" coins came from. An independent appraisor grades the coin, then puts it in his sealed case and labels it with a grade, that depending on the reputation of the appraisor, is accepted by everyone.

The same could be done with collector firearms, but it is expensive and only worth doing on higher end coins, so it would be the same with firearms. Say going from 99% to NIB would be a difference of several thousand dollars, Trading using an independent appraisor might be the way to go.

 

[Sgt.Murtaugh]

Not to offend anyone here who is a gun dealer, but I have met hundreds, maybe thousands of gun dealers and so many of them are such shady individuals. Obviously, there are a lot of good natured, kind folks too, but I have never met such a large group of <...(cheats?)...> in any other industry as I have in the gun industry. This is why I do all my business through one local gun dealer that I trust.

 

[dogtown tom]

Sgt.Murtaugh Not to offend anyone here who is a gun dealer...

If you didn't mean to offend anyone why did you then go on and do so?

 

[chiggerbyt]

Having been on both sides of the gun show tables over the past 30 years I think it's fair to say its even. That is, all kinds of people are on both sides.
There is no collusion between dealers across the board. At most gun shows each dealer brings a different element/interest when buying or selling.

And "almost" all Sergeants I've met have been real understanding and fair.
sorry just had to throw that in. chig

 

[ridgerunner1965]

gun dealers

i think what a lot of people dont realize about the prices they see on guns for sale and the prices dealers want to give for guns, is the labor and over head involved by these guys.they get up early and drive for anywhere from 50 to 500 miles to a show in a gas guzzleing truck pulling a trailer,move maybe a ton of gear into the building by hand on opening day and then do it all over again when they leave on sunday to go home.add to that eats and a motel.plus table cost.plus wear and tear on the guns and the truck.i have no idea what they make but id be hard pressed to say they are getting rich off of us.i really dont see why they bother but im glad they do.i dont buy anything from them except parts and maybe some ammo if its hard to get or cheap.i have more fun selling or tradeing with the guys walking around the shows who are just like me.especially the older fellas who are more than happy to stop and tell stories and school yu on the guns they are carrying.

 

[orionengnr]

In my experience (going to gun shows for the last 25 years or so) dealers at gun shows are not interested in giving you retail, or even wholesale.

As a generalization, they are interested in giving you about 1/2 of what they can sell it for today.

So, take the normal selling price, knock off 20% for the sell-it-today price, divide by two. Expect to be offered this amount

Now, in those rare instances you have something he really wants to buy and keep, take the normal selling price, knock off 20%, start there. I have seen this exactly once, when the buyer really wanted a stainless Colt Mustang and offered $475 for it. I was amazed. BTW, the seller accepted his offer, which is a perfect example of Econ 101.

 

[BlkHawk73]

Having been on the other side of the table, know many on the other side and have family on the other side of the tables I can say, at least up this way, no. Be surprised but many actually work together. They know what another may be needing, looking for or be interested in and either point them towards it or get it, and offer it to the other dealer at cost or with very little profit at all. Kinda a "you scratch my back, I'll scratch yours" thing. I know that some will float parts to another dealer, sort of a credit type thing and then later on pay or trade something back to them. on the other side of the coin though, it's a close enough group that if one screws one, the others know and lets just say, black balling is alive and well. Same with customers, be a pain at one and the others will know you before you get there.

 

[Cosmoline]

I think Orionengnr's estimation is only slightly extreme. They assume that folks looking to offload firearms are going to be willing to take very low amounts. In the case of the post referenced in the OP, they screwed up big time. I'm not surprised, since the dealers at a gun show may not actually know much about firearms. And they're looking to offload their dogs, not accumulate.

Gun shows are moribund, anyway. If the dealers think they're going to keep them afloat by price fixing I wish them luck. The big local one has shrunk to 1/5th its original size in the past decade alone. Soon only the flea market people will be left, along with the collector's association with nothing for sale. And that knife guy, and the guy with the little rubber band guns, and the Hitler guy of course. He'll be the very last one left and will try to end it all, but will only have a rubber band gun.

 

[Double Naught Spy]

This reminds me of a warning I heard about some people in the antiques business. Sometimes ( perhaps ) a group of antique dealers will get together and collude with each other to not bid high on valuable antiques at auctions. That way they can buy valuable antiques at low prices and in the process cheat people.

I wish those folks would attend the auctions I go to, agree not to bid very much, and then I could win the auctions I want.

How do you get people who want to buy something agree not to bid higher than one another so as to cheat the seller? That sounds rather hokey.

 

[jerkface11]

They pay you what the little blue book says they should. Which of course has nothing to do with reality.

 

[HavelockLEO]

thats why I dont go to any of the local gun shows in Eastern NC, I used to work for a dealer back in 2007 and what finally got me to decide that working shows was not for me was exactly what this thread asks about. The last two shows I worked, the bottom-feeder dealers (probably 70-75% of the dealers) all started getting together and deciding what they were going to charge for ammo and certain rifles (WASR's and somme others), after that I was done. The dealer I worked for had been a friend for many many years and his complicity in the venture really opened my eyes to how he really is.

 

[Bubbles]

Doubtful it's collusion. A used gun in X% condition is valued at $X per the Blue Book. Dealers usually offer 25-30% of that amount.

If you want more, sell it privately or consign it.

 

[dogtown tom]

Collusion
col·lu·sion   /kəˈluʒən/
[kuh-loo-zhuhn]
–noun
1. a secret agreement, especially for fraudulent or treacherous purposes; conspiracy: Some of his employees were acting in collusion to rob him.
2. Law . a secret understanding between two or more persons to gain something illegally, to defraud another of his or her rights, or to appear as adversaries though in agreement: collusion of husband and wife to obtain a divorce.

Once again, "collusion" is only in the mind of those who think their Vietnam issue Glock is worth $800 more than any other Glock or that their Mitchell's Mauser is a rare SS issued collectors piece because the ad in a magazine said so.

When a dealer offers you less than what you think your gun is worth......move on. When every dealer in the show offers you half of what you think your gun is worth.........you need to face the reality that you overpaid or have no clue what the value actually is.

I get offered used firearms quite often. It's hard to tell someone that their used Glock 37 in .45GAP isn't worth the $475 they are asking....."but, but, but I paid $575 for it new at Academy three weeks ago..." (dealer cost is $440 or less for NIB). If you take that used Glock 37 to a gun show no dealer in his right mind would give $475.......and because no dealer would give you what you ask.... it doesn't come close to collusion, it's simply an example of a free market.

What you sometimes see as collusion among dealers on new guns is simply adherence to the manufacturers minimum advertised pricing policy or MAP. Ever wonder why you don't see NIB Glocks for less than $499? And every dealer has the same price? It's not collusion...... it's those dealers complying with Glocks MAP. (Glock isn't the only manufacturer with MAP btw)

So I'll ask again....who has proof of collusion amongst gun dealers at a gun show?

 

[robhof]

The average gun dealer will give you 30% to 50% higher than the average pawn shop and yet very few pawn shops will haggle on a gun price, unless they've had it in the shop over a year. Many dealers at gun shows will haggle, unless there's a lot of interest in the particular gun you are after. I am not a dealer, but I have worked in a pawn shop and am familiar with their policies.

 

[Strykervet]

The price rigging you mention usually takes place in a monopoly. Without the monopoly, it doesn't work so well as individuals will "find a better way" and circumvent the price rigging.

A good modern example: gasoline. It is essentially a monopoly, or a cartel, or whatever you want to call it. A few that control almost all the gas. They do whatever they want because you can't find it for $2 elsewhere.

But in the end there is always a way around, even the oil pigs. For me, I parked the truck, only use it when needed, and invested in Tesla Motors instead. Likewise, if I can't get a good deal for a firearm (and I stopped even trying years ago --I still fail to see how a firearm can lose 50% of its value just through the sales process) I will sell it on here.

I've gotten to the point now, from being offered so many low prices and charged so many high ones, that I don't really frequent shops anymore like I did in the 90's. They did it to themselves, now I buy online and only use them for their FFLs. But hey, that is how the free market works!

 

[Cosmoline]

When a dealer offers you less than what you think your gun is worth......move on. When every dealer in the show offers you half of what you think your gun is worth.........you need to face the reality that you overpaid or have no clue what the value actually is.

In my experience it is the dealers, particularly at gun shows, who are guilty of amping up the prices on "custom Mousers" and third rate dregs. And they can be stubborn beyond all reason. Which may be one reason gun shows are dying.

 

[henschman]

Collusion and cartels are extremely hard to put into practice. The problem is that every member of the cartel has a market incentive to break the cartel agreement/collusion agreement. The only way cartels have ever actually been able to successfully last is to use some sort of initiation of force to keep the cartel members in line -- sometimes they go around shooting or kneecapping non-compliant members, and sometimes they get their cartel agreement passed into law and use the government to force the members into compliance.

There is absolutely no way that gun dealers would be able to maintain any kind of cartel or collusion scheme. It takes way too much discipline and requires way too much cooperation. Judging by the personalities of a lot of the gun dealers around my parts, I don't think I am off base in saying that it would be well nigh impossible for them to form any kind of successful cartel.

More power to them if they can do it and it makes money... as long as force/government aren't involved it is a completely mutually voluntary way of making money... but that doesn't change the fact that it is very hard to do, and successful cartels that don't rely on force are few and far between.

 

[iawolfeman]

I'd take my chances with most gun dealers

I've dealt with quite a few and feel I've always been treated fairly. That's not to say I haven't made some really stupid purchases and sold some stuff too cheap, but that was my decision. Maybe I'm just a naive Midwesterner!

 

[oneounceload]

The price rigging you mention usually takes place in a monopoly. Without the monopoly, it doesn't work so well as individuals will "find a better way" and circumvent the price rigging.

A good modern example: gasoline. It is essentially a monopoly, or a cartel, or whatever you want to call it. A few that control almost all the gas. They do whatever they want because you can't find it for $2 elsewhere.

First - a MONOpoly is ONE company controlling the market, the way that JDR's Standard Oil was a century ago.

Secondly, oil companies do NOT set the prices for the gasoline- the speculators and commodity traders do on the wholesale level, and coupled with world events, other major governments and their usages, etc., there is no way oil companies set prices - just like there is no way that gun dealers set prices at gun shows - consumers, in the end, set every price in a free market

 

[Double Naught Spy]

When a dealer offers you less than what you think your gun is worth......move on. When every dealer in the show offers you half of what you think your gun is worth.........you need to face the reality that you overpaid or have no clue what the value actually is.

If a dealer pays you what the gun is worth, something is wrong with the dealer. Dealers cannot buy inventory at proper value and then expect to turn around and sell it for more than it is worth. Some may price guns more than they are worth, but they won't stay in business long by paying full value.

Anytime you try to sell a gun to somebody who will then be trying to resell it, don't expect to get full value. If you want full value, your best bet is to sell it to another non-dealer individual.

Every so often a thread comes up where somebody is mad that they weren't offered full blue book value for their gun that they claimed was X condition...from a gun dealer, pawn broker, or some other sort of reseller. These folks seem to forget that the resellers have no reason to do the deal if they can't expect to turn a reasonable profit on the transaction.