RockyMtnTactical
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- Oct 21, 2006
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Agree with the first part ... but not the second ... Last night, local gun sale forum reflected a $500 10-5 (no mention of condition, but photo wasn't that impressive) ... stainless Smiths seem to be collecting a premium. Another newsflash: used S&W revolvers AIN'T cheap as heck anymore, at least up here in the Pacific Northwest (perhaps there's just more of us who appreciate 'em up this way?).S&W still sells plenty of brand new revolvers, despite the cheap as heck used m64's and m10's out there
Think about the last housing bubble we had in this country. Once the bubble burst, tons of home developers went out of business because they were constructing new houses as fast as they could possibly build them. They were hoping to take advantage of the huge demand and high prices, but were left holding the bag when demand tanked and there was an oversupply of homes on the market.Maybe it's because I'm not an MBA, but how can a huge increase in demand be a bad thing?
Agree with the first part ... but not the second ... Last night, local gun sale forum reflected a $500 10-5 (no mention of condition, but photo wasn't that impressive) ... stainless Smiths seem to be collecting a premium. Another newsflash: used S&W revolvers AIN'T cheap as heck anymore, at least up here in the Pacific Northwest (perhaps there's just more of us who appreciate 'em up this way?).
As far as Glocks go, before the panic, there was a huge glut in this region, prices were reasonable, and guys who tried to sell 'em used at MSRP caught a lot of flack ... Best I can tell -- at least in my part of the country -- the only firearms that consistently hold their value are the better [production] 1911s, ARs, S&W revolvers and anything with a rampant Colt on it ...
Only thing that I agree with, as far as the article goes, is Fjestad's comment: "We'll see how the next six months go." The gun industry rebounded robustly from the last couple panics and (true) values re-asserted themselves. If there's one thing we should take away from all this, it's only that we can't predict the future.
The real issue with he housing bubble was that the expansion of supply (new construction of end user items) was financed. Without the demand keeping pace with construction, an awful lot of builders wound up not paying on loans and a lot of folk who bought speculatively wound up tens/hundreds of thousands of dollars upside down.Think about the last housing bubble we had in this country. Once the bubble burst, tons of home developers went out of business because they were constructing new houses as fast as they could possibly build them. They were hoping to take advantage of the huge demand and high prices, but were left holding the bag when demand tanked and there was an oversupply of homes on the market.
Which is exactly why no firearm or ammunition manufacturer is expanding in the face of this artificial spike in demand. That spike will go away overnight, and backorders will quickly become cancelled orders, once gun control legislation dies in Congress.I don't think that is analogous to either the firearms industry or consumer base, excepting perhaps a gun manufacturer who heavily finances a production expansion.
Ramping up infrastructure and staffing to meet a short-term spike in demand is problematic when the spike subsides (and it will, probably before you are done with the expansion). You invested a bunch of money (bank loan or otherwise) so you are able to produce 1,000 widgets a month instead of 100, but it is hard to pay the bank loan, salaries, etc. on a 1000-widget-a-month factory when you go back to selling 100 widgets-a-month.Maybe it's because I'm not an MBA, but how can a huge increase in demand be a bad thing?
While you're right I don't think this insanely high demand will last longer than the time it will take to catch up with what's already been ordered (even if 1/4 of them are cancelled because they were ordered by speculators).Think about the last housing bubble we had in this country. Once the bubble burst, tons of home developers went out of business because they were constructing new houses as fast as they could possibly build them. They were hoping to take advantage of the huge demand and high prices, but were left holding the bag when demand tanked and there was an oversupply of homes on the market.
Actually, it sure does. Without getting too far off our main focus here, I've been doing some studying of globalization and supply chain issues recently, and the benefits of just-in-time inventory are crucial to firms succeeding in a competitive market in the modern world. Inventory is wasted money, warehouse space is profit going up in smoke. I don't know how many manufacturers are operating in a JIT supply chain model (or if it would even matter if they were, these days) but if not, they SHOULD BE. They'll bank more profits and guns will be less expensive if they can.I think the solution is a lot simpler than building a bunch of new factories. Just quit trying to roll out firearms on a just-in-time basis like bread loafs. Get some back stock of them. In fact this is a problem that comes up ALL THE TIME, not just during these panic periods. Vendors from Midway to Track are constantly short of everything from components to firearms. With a return to the old style of actual warehousing, there could be a lot more flexibility in responding to market flux. Because trying to predict exactly what's going to be bought when appears to be impossible. I realize nobody likes to actually warehouse anything anymore, but it's not going to break anyone's bank to rent storage space and put up some racks.
I think there are a couple of differences from the housing market:Think about the last housing bubble we had in this country. Once the bubble burst, tons of home developers went out of business because they were constructing new houses as fast as they could possibly build them. They were hoping to take advantage of the huge demand and high prices, but were left holding the bag when demand tanked and there was an oversupply of homes on the market.
That would be awesome, and great for the industry as a wholeEven if you don't add capacity, when you run a large back-log, stop taking orders and are running at 100%+ capacity, that doesn't leave much opportunity to develop, market and manufacture new products. This can create a window of opportunity for new competitors to enter the market and add capacity to the industry.
Since it seems that an AWB or mag ban isn't going to happen (I think ), there will be dump of more expensive guns that will deter new sales in the future. Getting a lightly used AR, mags, Glocks, etc. will be nice for us but not stores.