Gun Prices - Are They Justified?

[Ignition Override]

New 'angle': how about the fact that many city govts. Refused to Comply with their Highest Priorities (protect citizens), starting in early 2020, along with the "defund" movement which somehow (the original purpose) has made certain movement leaders very wealthy?

So many big city (you know the color of the sky) Mayors and DAs were not trying to keep violent mobs off the streets, and also since then have often not tried to require a solid bond from, or didn't charge violent thugs with crimes which are supported with evidence?

Considering this and how much federal money was pushed into circulation , plus statistics on the increases in Violent crimes——gun prices are not very high.

 

[D.B. Cooper]

I can't justify $2000 or more for a top shelf AR like a Daniel Defense or other maker.

I've never understood why some of those "top shelf" ARs support such high purchase prices. Mil spec is mil spec. I don't see what those guns have that a poverty pony doesn't have. Dare I say it? "It's just as good."

 

[AlexanderA]

The value is the maximum amount the market will reasonably bear, not what one person or one shop is able to pay or sell the gun for.

The fallacy with this is that there is not one single market. There are many different markets for the same item, and the price (value) of that item may vary significantly from market to market. There is money to be made by buying low in one market, and selling high in another market. This is called "arbitrage" and clever traders do it all the time. So, if you buy a gun at a local shop (or a local flea market) for x dollars, and then turn around and sell it on Gun Broker for 2x dollars, you are engaging in arbitrage. The fair market value is either x dollars or 2x dollars, depending on the market.

 

[Mauser fan]

Capitalism in its finest form. You either love it or hate it.

 

[Bronco72]

I guess it depends on whether you are buying or selling as to your take on things

 

[I6turbo]

The fallacy with this is that there is not one single market. There are many different markets for the same item, and the price (value) of that item may vary significantly from market to market. There is money to be made by buying low in one market, and selling high in another market. This is called "arbitrage" and clever traders do it all the time. So, if you buy a gun at a local shop (or a local flea market) for x dollars, and then turn around and sell it on Gun Broker for 2x dollars, you are engaging in arbitrage. The fair market value is either x dollars or 2x dollars, depending on the market.

^^^ This is the correct answer. Those of us in the business of selling identical products into various markets, whether they be different markets within the US, or different markets around the world, make a living managing these markets and the relationships between them.

The LGS vs. Gunbroker thing is kind of like a person selling their house with a For Sale By Owner sign in the yard vs. putting the house on Zillow so the rest of the world can find it.

 

[CoalTrain49]

Online purchases are risky unless you're dealing with an established business. Some people would rather deal with a person behind a counter. I know I would.

So in that regard you truly are buying and selling in two different markets.

Some people will buy cars online and some people won't. Two different markets. The guy doing online sales at a dealership isn't the same guy working the walk-ins. Why? Two different markets and one wouldn't know anything about the other. Yet the product is the same.

 

[Sistema1927]

The economics are the same for firearms as they are for any other product.

What is the proper price? Whatever a motivated seller will take as well as whatever an educated buyer will pay.

 

[silicosys4]

the internet has blown the idea of regional markets or local markets out of the water. There is no such thing as a local or regional market these days,
Just people not willing to work within the national market.

that makes no sense and i've explained this to my LGS several times when they had overpriced used guns in that I liked.
I'd just find one and order one in from online that was in several cases, hundreds of dollars less than the LGS.
Because there is no such thing as a local market with the internet

 

[AlexanderA]

The economics are the same for firearms as they are for any other product.

With the added overlay of more government regulation. The net result is that gun prices are higher than they would normally be, absent this overlay.

 

[DeepSouth]

the internet has blown the idea of regional markets or local markets out of the water. There is no such thing as a local or regional market these days,
Just people not willing to work within the national market.

that makes no sense and i've explained this to my LGS several times when they had overpriced used guns in that I liked.
I'd just find one and order one in from online that was in several cases, hundreds of dollars less than the LGS.
Because there is no such thing as a local market with the internet

i remember when if you bought a gun from a LGS and had a problem with it, you took it back to them. It was handled differently by different stores, some would send it back to the manufacturer for you, some would try to repair in house if possible, I have seen some give a new gun under certain circumstances and I presume send the old one back for repair or replacement to be resold. I remember one store that let my dad mic the choke on every REM 1100 in the store so he could pick the one he wanted….If anyone wonders, machinist’s really are perfectionist’s.

They would mount scopes and sometimes sight in rifles for customers. The point was if you bought from them, you dealt with them you had a relationship with them in way. I noticed that fading away about the late 90’s.

Today, we can do research on all sorts of guns, we aren’t simply limited to what’s in the store. So if they don’t have it there needs to be some incentive to buy from them, some value. Now, in most cases they want to do the exchange, and when you walk out the door that is the end in every way.
Today auto parts stores today are doing something similar, they have to order nearly everything, well I can do that. They seem to want a premium price. Need information about the product, you’re out of luck. Knowledgeable people behind the counter are rare, they normally can’t do much other than operate a computer, and again, I can do that on my phone.

In an effort to try to tie this back to point of the OP, that service does have value, and that should result in a higher price. Unfortunately that service is exceptionally rare today. Labor (in the form of warranty service and such) during and after the sale are also part of the value and therefore the price.

 

[I6turbo]

the internet has blown the idea of regional markets or local markets out of the water. There is no such thing as a local or regional market these days,
Just people not willing to work within the national market.

that makes no sense and i've explained this to my LGS several times when they had overpriced used guns in that I liked.
I'd just find one and order one in from online that was in several cases, hundreds of dollars less than the LGS.
Because there is no such thing as a local market with the internet

I think it's pretty safe to assume that most LGS would soon go out of business if they matched the internet prices and routinely sold for "hundreds of dollars less" than said LGS normally does. The typical LGS just doesn't have the business volume to allow him to get by on wholesale-level internet prices. So, they have to depend upon local customers who are either, not inclined to buy on-line or sight-unseen, or just want to support the local LGS and economy.

 

[mcb]

With the added overlay of more government regulation. The net result is that gun prices are higher than they would normally be, absent this overlay.

Firearms and ammunition are one of the lesser regulated product we commonly buy and sell. There is a minor tax on ammo and AFT regulation is only a minor burden on a gun company compared to to many other industries like medical, food, etc.

 

[silicosys4]

I think it's pretty safe to assume that most LGS would soon go out of business if they matched the internet prices and routinely sold for "hundreds of dollars less" than said LGS normally does. The typical LGS just doesn't have the business volume to allow him to get by on wholesale-level internet prices. So, they have to depend upon local customers who are either, not inclined to buy on-line or sight-unseen, or just want to support the local LGS and economy.

There is an epidemic of LGS's who are going out of business for exactly that reason. They have not been able to adapt to the fact that the regional market is dead, and its an internet based, national market now.
The ones that are surviving are the ones that HAVE adapted to an internet based, national market.
They are doing transfers, they are doing online consignment sales, they are keeping their stocks as current as possible, and they do their best to price match.

 

[lysanderxiii]

There is an epidemic of LGS's who are going out of business for exactly that reason. They have not been able to adapt to the fact that the regional market is dead, and its an internet based, national market now.
The ones that are surviving are the ones that HAVE adapted to an internet based, national market.
They are doing transfers, they are doing online consignment sales, they are keeping their stocks as current as possible, and they do their best to price match.

Most of the local gun stores around me have an on-line presence, either a webpage, or through Gunbroker or similar. (Or are pawn-shops, so they don't live or die on the gun market.)

 

[D.B. Cooper]

...AFT regulation is only a minor burden on a gun company compared to to many other industries like medical, food, etc.

dare I say...the OIL industry?

 

[AlexanderA]

Firearms and ammunition are one of the lesser regulated product we commonly buy and sell. There is a minor tax on ammo and ATF regulation is only a minor burden on a gun company compared to to many other industries like medical, food, etc.

I was thinking primarily about the FFL distribution system. That's by nature monopolistic, and like all monopolies, tends to raise prices.

 

[D.B. Cooper]

I was thinking primarily about the FFL distribution system. That's by nature monopolistic, and like all monopolies, tends to raise prices.

Not exactly. What makes a monopoly? Only one place to buy from. Whether that is through patents, regulation/legislation, or control of resources. Certainly there is regulation and legislation in the firearms industry, but the barrier to becoming an FFL is quite low. I've met lots of guys with FFLs who worked out of their home with pretty low overhead. Yes, the current administration like to harass FFLs, but pretty much anyone who is not a prohibited person can start a LGS and sell firearms. Given that, with the advent of smartphones and the internet, firearms buyers should be extremely well informed about the products they buy, the firearms retail world is closer to a pure competition than to a monopoly.

However, here is a different angle. Think about the manufacturing and distribution of firearms. There really aren't a lot of gun makers out there. (Even less quality gun makers.) Those manufacturers only distribute through certain distributors. When I worked at an FFL, we used RSR. There aren't a lot of distributors.

Now think about the barrier to entry into the firearms manufacturing and/or distribution inustry. That is a very high barrier. How many millions of dollars in start up funds would you need to buy/lease/build a factor, hire designers, engineers, and laborers, buy machinery, buy raw materials, etc. etc. etc. The government's petty harassment is a very small part of the cost to start a gun making business. So, what we have here is an oligopoly, the textbook description of which is a high barrier to entry into the industry with a limited number of players in the industry-so much so that what one company does impacts all of the others. (Designs. Models and calibers offered. Pricing. etc.)

The firearms manufacturing/distribution industry is an oligopoly, perhaps, but the firearms retail/sales industry is almost a pure competition.

 

[tarosean]

Because there is no such thing as a local market with the internet

There is still value in "kicking the tires". You see so many questions on forums that could be solved by putting ones grubby mitts on it.

 

[wayneinFL]

I would have to disagree with all the above. If it doesn't sell for $500 in a LGS but it does for $1000 online, it doesn't mean the gun is worth different things at different times, or even to different people.
The value is the maximum amount the market will reasonably bear, not what one person or one shop is able to pay or sell the gun for, and the market will reasonably bear $1000.
If one particular person isn't willing to pay $500 but another person is willing to pay $1000, the market doesn't change, simply your ability or interest in maximizing your market potential.
If you sell a gun for $500 because thats what one shop or person will pay, you aren't realizing market value if you can sell the gun for double by other means...you are simply choosing not to pursue the means by which you will realize the full market value.

So you're defining the market value as the value your firearm will sell for in the entire market? You don't want to restrict the definition to your LGS's target market, their town or county, but the entire state or the US, or North America, or the world?

Yeah, your LGS probably doesn't want to get an export license and apply to send a Winchester to Australia. Or sell it on the "black market". Some people won't even ship to CA or NJ. Yeah, he's probably not getting "full market value" if you define the market as EVERYBODY.

Or are you restricting your definition of "full market value" to legal sales within the US market?

Just because you choose to value products in your head in the US market or the Gunbroker market doesn't mean the other markets don't exist, and that people don't have to recognize those markets and devise strategies and techniques to work within those markets.

 

[silicosys4]

So you're defining the market value as the value your firearm will sell for in the entire market? You don't want to restrict the definition to your LGS's target market, their town or county, but the entire state or the US, or North America, or the world?

Yeah, your LGS probably doesn't want to get an export license and apply to send a Winchester to Australia. Or sell it on the "black market". Some people won't even ship to CA or NJ. Yeah, he's probably not getting "full market value" if you define the market as EVERYBODY.

Or are you restricting your definition of "full market value" to legal sales within the US market?

Just because you choose to value products in your head in the US market or the Gunbroker market doesn't mean the other markets don't exist, and that people don't have to recognize those markets and devise strategies and techniques to work within those markets.

I truly don't know what hyperbolic rant you are engaging in here, but you do you.
There is this thing called the internet that has radically changed marketing and markets on both a national and global scale.

 

[shafter]

Prices are what people are willing to pay. Sometimes prices are adjusted well below what people willing to pay and we call that a bargain. Other times the price is set too high and the item sits on the shelf forever. Generally though, in a free market prices find equilibrium.

 

[wayneinFL]

I truly don't know what hyperbolic rant you are engaging in here, but you do you.
There is this thing called the internet that has radically changed marketing and markets on both a national and global scale.

That was neither rant nor hyperbole. A market is whatever group you are trying to study. You're saying "full market value" is whatever the internet price is across the US. I don't understand how you determine what that price is among various retailers and marketplaces across the internet, let alone saying that the the local or regional markets are "dead" or no longer relevant.

There are too many variables to say a gun is worth a specific amount across the entire country on a national market.

We're not talking about grain or oil or some other commodity traded on an one large exchange with a recorded price. These are goods with a fairly high level of differentiation, that can't legally be traded interstate without going through a dealer and following local regulations, selling to people in different regions with different needs. There are a LOT of factors that affect price in a local market.

I can find police trade Glocks for anywhere from $320 to $500 on the same website, because there are 3 common calibers, 5 generations of pistols, and varying levels of wear or damage. Let's say you buy off the internet at "full market value" as you call it. Even if you found two matching pistols, same make, model, and generation, with the same scratches and scuffs in exactly the same places, the price of that gun is going to vary depending on what online retailer you buy it through, and where you're picking it up. If you're in an area with a lot of competition and few regulations, the transfer is as low as $10, and you might have been able to buy the same in stock at a large LGS for close to what you paid at an internet retailer. If there is little competition and the state is highly regulated, you might pay $50 for the transfer, and no locals with cheap Glocks to compete with that price.

Khaled at Shoot Straight has 10 stores across our state, and owns his own gun show circuit. He didn't build his business by setting his prices to whatever your idea of a national market price is. He doesn't sell the same gun for the same price online, at his stores, or at gun shows. He doesn't even sell the same gun for the same price on the same day at the same show.

 

[silicosys4]

That was neither rant nor hyperbole. A market is whatever group you are trying to study.

Thats an inherent misunderstanding of the meaning of the term "market". A market is whatever group of customers is available to you.
The internet has vastly changed that group of customers to a nationwide market.

That you would choose to focus on a subset (only buying/selling local) of the market does not change the fact that you are focusing on a subset while ignoring the broader market that exists and is available to you.

1. 
   Dictionary
   Definitions from Oxford Languages · Learn more
   
   mar·ket
   
   noun
   noun: market; plural noun: markets
   1. 1.
      a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
      "farmers going to market"
      • an open space or covered building where vendors convene to sell their goods.
        h
        Similar:
        shopping center
2. 2.
   an area or arena in which commercial dealings are conducted.
   "the labor market"
   • a demand for a particular commodity or service.
     "there is a market for ornamental daggers"

You're saying "full market value" is whatever the internet price is across the US. I don't understand how you determine what that price is among various retailers and marketplaces across the internet, let alone saying that the the local or regional markets are "dead" or no longer relevant.

Look, its real simple. When your LGS has, say, a Colt Python in the shop and its the only one for sale in the entire town, and your LGS has it at a price that is indicative of the LOCAL scarcity,
thats the LGS pricing for the local market.
BUT
When I can jump on the internet and find a wide selection of Colt Pythons in a selection of finishes, barrel lengths, condition, year, etc, and order them in at a price thats competitive across the entirety of the internet, then order them in instead of being bound by whats available on hand locally.....
THE LOCAL MARKET IS DEAD.
This happened to me the other month. A shop had a NIB python for sale for $3.5k. Nice gun. I looked online right there in front of him and found a gun with the same features in the same condition in the same year range for $2400. He countered with $2800.
Did the value of the gun in the local market just drop by $700 in the few minutes that I spent looking it up?

There are too many variables to say a gun is worth a specific amount across the entire country on a national market.

Like what? If I've got the internet, I can find the range of prices the gun should be in, and of those, I can find the best price for what I'm looking for.

We're not talking about grain or oil or some other commodity traded on an one large exchange with a recorded price. These are goods with a fairly high level of differentiation, that can't legally be traded interstate without going through a dealer and following local regulations, selling to people in different regions with different needs. There are a LOT of factors that affect price in a local market.

And I don't care about any of those factors. I don't have to let them affect me since I can jump on the internet and find a gun at a price that isn't affected by local market factors and order it in.

I can find police trade Glocks for anywhere from $320 to $500 on the same website, because there are 3 common calibers, 5 generations of pistols, and varying levels of wear or damage. Let's say you buy off the internet at "full market value" as you call it. Even if you found two matching pistols, same make, model, and generation, with the same scratches and scuffs in exactly the same places, the price of that gun is going to vary depending on what online retailer you buy it through, and where you're picking it up.

The price may be different, but the value of two identical guns does not change no matter the sticker price on each one. Price does not equal value.

If you're in an area with a lot of competition and few regulations, the transfer is as low as $10, and you might have been able to buy the same in stock at a large LGS for close to what you paid at an internet retailer. If there is little competition and the state is highly regulated, you might pay $50 for the transfer, and no locals with cheap Glocks to compete with that price.

Khaled at Shoot Straight has 10 stores across our state, and owns his own gun show circuit. He didn't build his business by setting his prices to whatever your idea of a national market price is. He doesn't sell the same gun for the same price online, at his stores, or at gun shows. He doesn't even sell the same gun for the same price on the same day at the same show.

I don't do business with Khaled at Shoot Straight. The way you are describing his pricing practices, I wouldn't keep him high up on the rolodex if I did.
If he sells guns above what I can get them for elsewhere, I'd buy them elsewhere. If he makes good money selling guns for a higher price than others, good on him, he has found another way to maximize his value as a shop to the customers....or his customers don't do their due diligence and are content paying more than they could have elsewhere....which I suspect is the case from how you are describing him.

People overpay for goods all the time, often by choice. I've never claimed otherwise.

 

[wayneinFL]

Thats an inherent misunderstanding of the meaning of the term "market". A market is whatever group of customers is available to you with standard advertising and marketing practice.

1. 
   Dictionary
   Definitions from Oxford Languages · Learn more
   
   mar·ket
   
   noun
   noun: market; plural noun: markets
   1. 1.
      a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
      "farmers going to market"
      • an open space or covered building where vendors convene to sell their goods.
        h
        Similar:
        shopping center
2. 2.
   an area or arena in which commercial dealings are conducted.
   "the labor market"
   • a demand for a particular commodity or service.
     "there is a market for ornamental daggers"

Look, its real simple. When your LGS has, say, a Colt Python in the shop and its the only one for sale in the entire town, and your LGS has it at a price that is indicative of the LOCAL scarcity,
thats the LGS pricing for the local market.
BUT
When I can jump on the internet and find a wide selection of Colt Pythons in a selection of finishes, barrel lengths, condition, year, etc, and order them in at a price thats competitive across the entirety of the internet, then order them in instead of being bound by whats available on hand locally.....
THE LOCAL MARKET IS DEAD.



Like what? If I've got the internet, I can find the best price. Period.



And I don't care about any of those factors. I don't have to let them affect me since I can jump on the internet and find a gun at a price that isn't affected by local market factors and order it in.



No its not. The value does not change no matter the sticker price on it. Price does not equal value.



I don't do business with Khaled at Shoot Straight. I couldn't care less what his business practices are.
If he sells guns above what I can get them for elsewhere, I'd buy them elsewhere.

"That's an inherent misunderstanding of the meaning of the term "market". A market is whatever group of customers is available to you with standard advertising and marketing practice."

I thought it was pretty obvious I was referring to groups of potential customers, not dogs, cats, and squirrels. You can define a market by demographics, area, or just about anything. You seem to think it means just the people who think like you.

"I don't do business with Khaled at Shoot Straight. I couldn't care less what his business practices are.
If he sells guns above what I can get them for elsewhere, I'd buy them elsewhere."

Thats an inherent misunderstanding of the meaning of the term "market". A market is whatever group of customers is available to you.
The internet has vastly changed that group of customers to a nationwide market.

That you would choose to focus on a subset (only buying/selling local) of the market does not change the fact that you are focusing on a subset while ignoring the broader market that exists and is available to you.

1. 
   Dictionary
   Definitions from Oxford Languages · Learn more
   
   mar·ket
   
   noun
   noun: market; plural noun: markets
   1. 1.
      a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
      "farmers going to market"
      • an open space or covered building where vendors convene to sell their goods.
        h
        Similar:
        shopping center
2. 2.
   an area or arena in which commercial dealings are conducted.
   "the labor market"
   • a demand for a particular commodity or service.
     "there is a market for ornamental daggers"

Look, its real simple. When your LGS has, say, a Colt Python in the shop and its the only one for sale in the entire town, and your LGS has it at a price that is indicative of the LOCAL scarcity,
thats the LGS pricing for the local market.
BUT
When I can jump on the internet and find a wide selection of Colt Pythons in a selection of finishes, barrel lengths, condition, year, etc, and order them in at a price thats competitive across the entirety of the internet, then order them in instead of being bound by whats available on hand locally.....
THE LOCAL MARKET IS DEAD.
This happened to me the other month. A shop had a NIB python for sale for $3.5k. Nice gun. I looked online right there in front of him and found a gun with the same features in the same condition in the same year range for $2400. He countered with $2800.
Did the value of the gun in the local market just drop by $700 in the few minutes that I spent looking it up?



Like what? If I've got the internet, I can find the range of prices the gun should be in, and of those, I can find the best price for what I'm looking for.



And I don't care about any of those factors. I don't have to let them affect me since I can jump on the internet and find a gun at a price that isn't affected by local market factors and order it in.



The price may be different, but the value of two identical guns does not change no matter the sticker price on each one. Price does not equal value.



I don't do business with Khaled at Shoot Straight. The way you are describing his pricing practices, I wouldn't keep him high up on the rolodex if I did.
If he sells guns above what I can get them for elsewhere, I'd buy them elsewhere. If he makes good money selling guns for a higher price than others, good on him, he has found another way to maximize his value as a shop to the customers....or his customers don't do their due diligence and are content paying more than they could have elsewhere....which I suspect is the case from how you are describing him.

People overpay for goods all the time, often by choice. I've never claimed otherwise.

"That's an inherent misunderstanding of the meaning of the term "market". A market is whatever group of customers is available to you with standard advertising and marketing practice."

I thought it was pretty obvious I was referring to groups "an arena" of potential customers. You can define a market by demographics, area, and other factors. You seem to think it means just the people who think like you.

Not everybody is you.

There is still a large market for local shops- people who are not firearms aficionados. A firearm for most gun owners is a large purchase they make a few times in their lifetime. They're not familiar with transfers. They can't look at the pictures they see on the internet and make an informed decision like they can when they walk into a shop and put their hands on the gun. You say "THE LOCAL MARKET IS DEAD", and yet people like Khaled are thriving by selling to people who want to put their hands on the guns before they purchase them. If the local market is dead, it hasn't fallen down yet.

You don't see any value in being able to inspect a firearm before purchasing it? That's overpaying? I'll tell you what's overpaying- receiving a damaged firearm, and the seller from the other side of the country tells you to pound sand. Or the firearm doesn't show up. You get what you pay for- there's a risk associated with the lower price.