When will the hyper gun demand bubble burst?

[Kynoch]

I'm curious as to when the current hyper gun demand bubble will burst and when will prices drop? It will happen. It's just a matter of when?

Guns are a durable product. They aren't consumed for the most part and they aren't typically thrown away -- they are sold, traded or given away. At some point the current hyper demand will lesson because of far greater saturation of product (particularly in semi-new markets like small 380/9mm pistols) and possibly because of potential political changes.

Gun makers in the USA have been extremely shrewd in not stepping up production on most products (small semi-auto pistols would be a notable exception as they build market share) and flooding the market with output. That would put a lot of pressure to lower pricing to keep the flow moving, particularly once the bubble breaks. They face far less foreign competition (both high quality and lower quality products) due to the GCA of 1968 so that too plays a part. If the GCA didn't exist there would far greater price competition today.

On the other hand once demand decreases there will finally be increased competition amongst the different manufacturers which should lead to price erosion if the market is indeed free (except for the GCA of course.)

This is a fascinating subject to me. Gun sales have been a feast/famine industry for well over 100 years in the USA. Gunmakers do well during times of war and uncertainty. Then (at least in the past) they had to compete with the surplus sales of what they had earlier built for the gov't. Any insights?

 

[hso]

Prices won't drop.

 

[GCMkc]

Supply and demand.

The post above is all so right. Prices won't drop especially when people keep buying guns while the prices are going up.

 

[Texan Scott]

hyper children should not be given bubble guns... just my opinion.

Demand - and thus prices- go up regularly in response to perceived risk of gun control and also during election years (both of which we have now).
Prices may not go down across the board, but in some markets, peak saturation will be reached and decline in demand will occur. In other markets, increased demand has yet to be appreciably noticed (thousands are not rushing out to buy a new marlin .30-30). Capitalist democracy doesn't always make sense... we just haven't found anything that works better.

 

[DefiantDad]

My opinion is that there is a QUALITATIVE difference in firearms purchasers' perspectives nowadays, fueled in large part by much wider accessibility to firearms information via the Internet (and even mainstream TV), and kept alive by widespread concern about the future.

I have not specified the exact area of concern because it is different for everyone, and everyone can make a fairly good case for why they are concerned about the future, and thus want firearms.

Of course, this is for America. For countries that do not allow firearms, the citizens probably WANT firearms, and just are not allowed to get them (or can, but in less quality/quantity). (There are a growing number of Europeans, for example, who are trying to get firearms because they expect unrest with the escalating collapse of their financial positions.)

So, essentially, my view is that this "bubble" is not going to burst anytime soon (if at all) unless and until everyone is super happy and contented with life and can hardly give a hoot about needing a firearm for protection in the coming days (given everything going on in the world now, and in particular in the good old United States of America).

 

[Bobson]

I don't see prices dropping. Rather, I expect to see steady price increases, as we have up to this point. Americans are hoarding things more now than ever, and in a society that praises consumerism, things are only going to worse.

As far as the feast/famine during times of war and peace, I can't say much other than I think its going to be a very long time before this country experiences true "peace" again. America involves itself in the problems of other nations, and the way things are going in the world, we may never see peace again.

 

[DefiantDad]

Prices are going to increase anyway due to the steady march of inflation, but unfortunately there are also other factors going into that, adding to even higher prices. This goes for everything, not just firearms. Buy now if you need it in the future, and it doesn't have much of an expiry date or can get obsolete. That's my opinion, but I am following it every day. (Note that where prices are increasing due to inflation, it does not mean the firearms manufacturers are making more profit, since their raw materials and probably labor costs are also increasing, not to mention factory fuel/shipping costs.)

 

[Walkalong]

Prices won't drop.

any time soon because they are selling all they can make almost as fast as they make them, not to mention all the ammo and components flying off the shelves at today's price. Much will depend on November I believe. That will make have a great affect on the urgency of people buying.

 

[DefiantDad]

Everyone keeps talking about November election but I think regardless of who is elected, 2013's continued economic collapse (you can pretty much take it to the bank... oh wait...) will give even more reason to worry.

 

[Kynoch]

Prices won't drop.

Sure they do. They drop when there is an increase in competition for sales -- at least in a free market.

 

[DefiantDad]

Agree totally in principle but realistically I do not think we will ever reach a production capacity that can even meet the growing demand, much less exceed it.

EDIT: Upon further thought, I have to put an exception, and that exception will be because people who want guns CAN'T AFFORD TO BUY ONE. And that will reduce demand. So, in fact, I do see that happen in the next 2 or 3 years. And that actually brings up something interesting... the market for inexpensive firearms. When people cannot afford quality, by heck they will buy what they can rather than be unarmed.

 

[Kynoch]

Everyone keeps talking about November election but I think regardless of who is elected, 2013's continued economic collapse (you can pretty much take it to the bank... oh wait...) will give even more reason to worry.

Indeed.

Sales will be impacted not only by political concerns -- concerns about being able to buy a gun in the future but also related economic ones -- do I have the money to buy a gun?

Some markets are going great guns right now. A perfect example would be the small 380/9mm handguns. When that market is better satiated (it could well take a few years) the impact to a manufacturer like Ruger will be fairly profound. They're not going to make things up by selling more No. 1's. Instead they'll do what they can to take some of S&W's business and one of the ways will be to lower prices...

 

[Kynoch]

Agree totally in principle but realistically I do not think we will ever reach a production capacity that can even meet the growing demand, much less exceed it.

EDIT: Upon further thought, I have to put an exception, and that exception will be because people who want guns CAN'T AFFORD TO BUY ONE. And that will reduce demand. So, in fact, I do see that happen in the next 2 or 3 years. And that actually brings up something interesting... the market for inexpensive firearms. When people cannot afford quality, by heck they will buy what they can rather than be unarmed.

Demand for guns is not unlimited. History has shown that time and time again. All it takes it increase capacity is money. Gunmakers are doing well know but that has always been the case before the decline -- be it gradual or off a cliff.

I don't equate low prices to lower quality gun. I'm not sure what the margin is on a Glock or a plastic Ruger but it's got to be huge. Were it a product other than guns, the competition would already be so fierce that they would have already had to react.

 

[Balrog]

I am 46 years old, and have never seen prices go down in my lifetime, only up.

Guns are a commodity like gold to some degree. People dont mind owning more than they need. They dont take up much space, last indefinitely, and make excellent barter items.

 

[DefiantDad]

OK, I agree. That is why I did not write "cheap" but used "inexpensive" - that lead to the next statement about not being able to afford quality, which was not actually supposed to be a directly following train of thought, although I had mistakenly written it that way.

What I really meant was, when high quality (sufficient quality) inexpensive guns are no longer to be had, THEN people will buy even lower priced guns, whether or not they are of sufficient quality.

And it is not only the price of guns moving up or down; it is also the REAL BUYING POWER (i.e., adjusted for inflation and cost of living) of the people, going up or down (and going down in the coming months).

 

[Kynoch]

More and more I think the biggest reason for high gun prices is artificially choked supply due to the GCA of 1968 the what many consider to be the unseemliness of the gun business.

If guns were another durable good with increasing demand. other companies would get into the business -- more and more by jobbing out the manufacturing while focusing on marketing, sales and distribution. Even if the product is made off-shore, it doesn't mean that it's low quality (or low priced either.)

Were it not for the GCA and the unseemliness of the gun business, someone like Nike would purchase designs for whatever their market research told them would sell. They'd job the manufacturing to someone else and focus their time on what they do best. Sales and marketing.

Depending on what lines they got into, they'd go hire Kim Rhode, Jessie Harrison, Jerry Michulek (Nike could crush S&W when it comes to paying for endorsements), etc. and it would be off to the races -- and lower prices.

 

[Kynoch]

I am 46 years old, and have never seen prices go down in my lifetime, only up.

Guns are a commodity like gold to some degree. People dont mind owning more than they need. They dont take up much space, last indefinitely, and make excellent barter items.

We are almost the same age. I bought a quart of Gatorade today. It was cheaper (without even taking into consideration inflation) then it was in 1985.

My Ping golf clubs are cheaper today then when they were in 1990.

Many, many consumer goods are cheaper today then they were decades ago. Microwave ovens, drill motors, TVs, computers, etc. etc.

 

[Kynoch]

any time soon because they are selling all they can make almost as fast as they make them, not to mention all the ammo and components flying off the shelves at today's price. Much will depend on November I believe. That will make have a great affect on the urgency of people buying.

That's sort of the point. The current supply/demand relationship won't last forever...

Actually I would say "all the want to make."

 

[DefiantDad]

I think we should not overlook the extremely pertinent factor of many people buying guns (often for the first time ever) because they feel "something" is coming down real soon now.

Every time I visit any of my LGS I see many first time buyers getting "prepared" and the shop owners freely talk to me about this "zeitgeist" going on, especially since about a year ago.

 

[12131]

Prices will drop, if MR is elected.
They will continue to rise, if BO is elected.
Just my WAG.

 

[DAP90]

Guns are a durable product. They aren't consumed for the most part and they aren't typically thrown away -- they are sold, traded or given away.

…or endlessly acquired and added to a collection. They may not be consumed but they sure do hate to be alone.

 

[12131]

…or endlessly acquired and added to a collection. They may not be consumed but they sure do hate to be alone.

You got that right.

 

[Midwest]

Only 10 years ago SKS's were selling for $99 and Spam cans with 640 of 7.62 x 39 were selling for $49. What are they now?

Ten years from now they will double or triple from what they are now....

 

[gym]

Prices are here to stay, no drop

 

[JagerRanger]

I am 46 years old, and have never seen prices go down in my lifetime, only up.
[snip]

For example, the prices for AK-47 clones (WASR-10) went up in 08 from ~$300 to ~$800 and up, and the same applies to AR-15s. The prices pretty much came down to 08 levels.

The same applies to ammo.

Now the prices are going up again, but still under the top 08/09 prices.