Why do gun dealers like to jack up the prices?

[yeti]

Why do gun dealers like to jack up the prices?

Why do I like getting paid $25 an hour instead of $12.50?

 

[Remo223]

Because, above transfer fees, many dealers need make a 10-15% profit margin to remain in business. A dealer whose only profit on a deal is a transfer fee isn't making much money. The reason gun dealers "jack up" prices is the same reason wholesale prices are ALWAYS lower than retail. At the retail level, items are sold at low volume for maximum profit. The same reason the dealer marks a "$300" dollar gun at $400 is the same reason your local grocery store buys candy bars for $0.50 a piece and sells them for $1.25. Even if i "KNOW" the candy bars are only "worth" .50 cents.....Unless I'm buying in bulk just like the store....theres no way I'm going to see that price when the store has to make their profit as well. Comparatively, even at the "inflated" prices you seem to believe guns are sold at...the profit margins on firearms are much lower than they are with many other goods.

Oversimplified

Gun dealers buy guns at lower prices than you can buy them on the internet

I bet they need more than a 15% markup!

Usually its a tie between buying in a gunshop and buying on the internet once shipping and transfer fees are added. Normally the only thing you save is sales tax. But the internet is a really big place and if you look hard enough you can find some unusual deals that won't be available in a gun shop.

The advantage to a gun shop though, is service. If you have a problem with a new gun, you don't have to do anything. You just tell your gunshop and they take over from there and make everything good.

I can buy motorcycle parts on the internet for my harley much cheaper than from a mom&pop parts store near by. But I prefer to do business with the mom&pop shop because I know they are working for me to make me happy. I don't have to take any risks on unknown companies on the internet. They take that risk for me. They also know from experience what kind of hassles I will have with what kind parts and what kind of compatibility issues could come up.

Basically, it's worth it to use the mom&pop shop.

mom&pop gun shops are the same way imo. I use a gunshop where the entire family(3 generations worth) live above the shop. I really don't care if they cost a little more. They are worth it. Older guns no longer made and hard to find are a different story though. I buy those over the internet

 

[mgmorden]

It's simply capitalism at work. They are free to charge what prices they like. You are free to look elsewhere. I personally have found that usually "looking elsewhere" (ie, online) is the way to the cheapest price. Those that adapt can stay in business. Those that don't, will go out of business.

The reality is the competition drives prices lower. I think that's where a lot of people make the mistake in understanding capitalism. Nobody is "owed" profit in a market economy. As a matter of fact that idea that everyone along the line is owed their "fair share" is the direct antithesis to capitalism (communism). In capitalism you must EARN your profits through beating your competition. That can be in quality, price, service, etc, but realistically, the market has shown time and again that price typically towers above all the rest. If you can't beat your competition, for whatever reason, you need to shift to another market segment.

With that in mind, I don't really MIND that my local shops have what I consider to be ridiculous prices, but I also am not going to pay them. If they want my business, they're free to work for it.

If they get their prices to within $25-30 of what I can get it for online + shipping + transfer, then I'll consider it. Otherwise, "handling" the gun in person just isn't worth that much to me.

 

[Lou McGopher]

I went to a store/range last night that I had never visited before, to rent a lane. When checking-out afterward, I asked about FFL transfer fees. They said $40 for something they don't have and can't readily get through their primary sources, $100 for something they have or can get. Okay, that's fine. I can understand not wanting to simply help out the competition.
I asked if they sold online, or listed inventory & prices on line. Nope, they don't do that.
It's odd to me that so many stores don't do this by now. Even if you're not going to sell online, at least let people know what you have or can readily get. I don't have time to call every store and ask about stock and prices on the multitude of things I'm looking for, in the various configurations these things come in. And I doubt the store can afford to have someone spend that much time on the phone. Put it online, let people know what you have. Sure, maybe you can't price things as low, but I do recognize there are benefits to being able to drive out to a store right away and deal with someone face-to-face, and that may justify the additional cost to me. But if I can't readily see what you have, I'm a lot more inclined to buy from someone who does make their inventory available, and I will find an FFL to do the transfer for less than you will. I'm going to get the gun I want either way.
As more people buy more guns and such online, I expect that those stores who can't compete on prices will have to shift the focus of their business away from gun and ammo sales, and toward gun rentals, range rental, training, and gun smithing. And if this is what serves consumers best, good. No sense crying for the buggy whip makers.

 

[mgmorden]

Why do I like getting paid $25 an hour instead of $12.50?

If that's the case lets just make it $50/hour! Reality doesn't work that way. Your time is only worth what someone is willing to pay for it. If an employer is only willing to pay you $12.50 an hour for your time then you can LIKE getting paid $25/hour all day long and it isn't going to change the market value of your time.

I think too many gun dealers are trying to price on what profit they WANT to make on a sale versus what they CAN make on a sale.

 

[medalguy]

To add another point of view, consider this. We are all (I assume) fairly sophisticated in the ins and outs of buying guns on the internet, shopping safely and all that. Consider that there are lots of people out there who don't even own a computer, and that there are lots of people who even today don't "want their credit card information floating around out there" and would not even consider buying anything online, then add in all those who would NEVER buy anything they couldn't hold in their hands first, and you have just one more reason why brick and mortar stores can charge more than an on-line dealer. Now add in the convenience of examining that firearm before you make the purchase, and the after-sale service a local shop can provide, and you arrive at the bottom line.

It's called VALUE. You really can't look at just the price paid and arrive at a figure for value received. That, I propose, constitutes a good reason for local dealers to charge more.

 

[22-rimfire]

The "more" is the issue. One poster said if it is more than $25 above the online price, they go with online. Others say... $50. $100? $100 seems a little high to me with all things being equal. They usually aren't however. Me, I do support my LGS when I can and I do pay more at times. I don't worrry about it. If a few boxes of ammo cover the spread, it is no big deal one way or the other to me; just shoot it half as much for a while. At one time, I would have jumped at the chance to save myself sales tax, but I have come to the conclusion that sales taxes are necessary for the government to provide their functions. I like less government, but people sure kick when it snows and their street never gets plowed.

 

[ET]

If that's the case lets just make it $50/hour! Reality doesn't work that way. Your time is only worth what someone is willing to pay for it. If an employer is only willing to pay you $12.50 an hour for your time then you can LIKE getting paid $25/hour all day long and it isn't going to change the market value of your time.

I think too many gun dealers are trying to price on what profit they WANT to make on a sale versus what they CAN make on a sale.

There in lies the problem for brick & mortar shops. The profit they "can" make doesn't necessarily pay all their expenses. They go bankrupt. Employees lose their jobs. The landlord loses a tennant. The city loses taxes. Your garbage doesn't get picked up next week and you call up & complain about the lousy service you are getting from the city. All the while your neighbor, (you know the one who worked at the gun store?) goes on unemployment & quits using the product that you sell. Then next month you can't quite understand why your sales declined last month. Whoa! what happened?

 

[Remo223]

The "more" is the issue. One poster said if it is more than $25 above the online price, they go with online. Others say... $50. $100? $100 seems a little high to me with all things being equal. They usually aren't however. Me, I do support my LGS when I can and I do pay more at times. I don't worrry about it. If a few boxes of ammo cover the spread, it is no big deal one way or the other to me; just shoot it half as much for a while. At one time, I would have jumped at the chance to save myself sales tax, but I have come to the conclusion that sales taxes are necessary for the government to provide their functions. I like less government, but people sure kick when it snows and their street never gets plowed.

I'm glad there are people like you that want to pay sales tax. That way when I don't pay sales tax the roads still get serviced.

 

[Nushif]

Preferring an anonymous, bottom line transaction for anything is fine on rare (tight) occasions, but if I prefer to have a relationship with the moms and pops who are doing right by their customers. Money isn't supposed to steer the wheel every time.

This.

I buy exclusively local because I like going in, drooling, being greeted and getting to see some of the cool new toys coming in first. That is a service and it costs money.
There is a lot of hidden benefits to spending money in the same place repeatedly. It bought me a perfect anniversary gift, let me play with silencers, has gotten me free repairs from our (awesome) local 'smith, has gotten me invited to shoots and all kinds of things.

 

[Lou McGopher]

I prefer to have a relationship with the moms and pops who are doing right by their customers. Money isn't supposed to steer the wheel every time.

Online sellers have to do right by their customers, too, if they want to stay in business.

At one time, I would have jumped at the chance to save myself sales tax, but I have come to the conclusion that sales taxes are necessary for the government to provide their functions. I like less government, but people sure kick when it snows and their street never gets plowed.

This is way beyond the scope of this topic.

 

[Lou McGopher]

Then next month you can't quite understand why your sales declined last month. Whoa! what happened?

Then the following month everyone finds a job that provides a service that consumers actually want, and everything goes back to normal. C'est [strike]la vie[/strike] capitalisme.

 

[mgmorden]

There in lies the problem for brick & mortar shops. The profit they "can" make doesn't necessarily pay all their expenses. They go bankrupt. Employees lose their jobs. The landlord loses a tennant. The city loses taxes. Your garbage doesn't get picked up next week and you call up & complain about the lousy service you are getting from the city. All the while your neighbor, (you know the one who worked at the gun store?) goes on unemployment & quits using the product that you sell. Then next month you can't quite understand why your sales declined last month. Whoa! what happened?

OR, instead of going out of business, the shop owner figures out that rather than selling guns, he can do better as a range. Or perhaps he can make more money selling skateboards. However it works out, it's up to the market to decide.

Nobody is owed a thing. Communism isn't a label we just decided to stick on China and Cuba. It's the idea that everything should be equally divided and "fair". "From each according to his ability, to each according to his need". The problem with is it does nothing to promote hard work and ingenuity. The capitalistic model corrects that. Those that are not able to compete go out of business. Those that do, flourish. It's survival of the fittest, and it keeps our economy from stagnating as it would if everybody was getting "their fair share".

 

[Hanzo581]

Businesses in general must adapt to the era they exist in, the internet isn't going anywhere.

 

[22-rimfire]

I'm glad there are people like you that want to pay sales tax. That way when I don't pay sales tax the roads still get serviced.

Sales tax is one of the considerations when buying online whether it be firearms, ammunition, accessories, or the new computer. If nothing else, the differential pays for the shipping cost or you hope it does. Remo, you DO know that you are required in most cases to pay state and local sales tax on all mail order purchases (in most cases under state law) whether you agree with that or not. It just so happens that only the big dollar items are captured such as vehicles and so forth. WA is now requiring FFL dealers to charge a tax on transfers. With the changes in shopping habits, mail order purchases are becoming signficant and most states are searching for a practical way to collect these taxes from the merchant because chasing down every genius trying to save a few dollars isn't worth the time. This would increase the mail order merchant's cost to do business... more government forms to complete and maybe another employee or two to keep track of such things. What happens? The price of that firearm from J&G or Buds suddenly goes up a few percent to cover their cost to do business. Enjoy it while you can.

Businesses do have to adapt to the environment they work in. The LGS in Washington may have their shop in a good part of town, they have higher operating costs, or their typical clientele wants and is willing to pay for service. There are always blue light shoppers around. I'm glad that blue light FFL dealers exist. There is a niche for just about everything. If you are a blue light shopper, don't get upset when you can't find someone willing to assist you when you need the service. Then we'll see a thread about how FFL dealers are not standing behind their service and want to charge for something that seems to blue light shoppers should be "free". Nothing, absolutely nothing is free these days whether it is at your local place of worship or the the Porsche dealer. One way or the other, you pay for it. I liken the blue light shoppers to "friends" who just "happen" to drop by your place at meal time or never contribute anything such as food or drink watching your favorite movie or sporting event on TV. It gets old. Eventually it changes or it stops.

 

[browneu]

Most of the LGS in my area are higher than internet dealers on their posted prices. However, the internet store's price ends up being higher after you add in shipping, transfer fees, and my time.

I would rather support the LGS since that keeps my money in my community. The LGS is an employer which pumps the local economy. This is a benefit that can be missed from buying online.

 

[Bubbles]

One poster said if it is more than $25 above the online price, they go with online. Others say... $50. $100? $100 seems a little high to me with all things being equal.

It depends on how much you are willing to pay for convenience and customer service. Some folks want to handle a firearm and walk away from the store with it that day.

Other buyers are willing to take on more risk. For example, if the gun is lost or broken during shipping, or the buyer decides that a used gun isn't "as advertised", then the buyer has to work with the seller to make it right - the transfer dealer isn't going to help resolve those problems because his money isn't on the line.

 

[Remo223]

"Remo, you DO know that you are required in most cases to pay state and local sales tax on all mail order purchases (in most cases under state law) whether you agree with that or not."



internet sales were purposefully exempted from sales tax by design. The purpose for the exemption was to promote the internet. Some states are hurting financially and are trying to get more tax revenue from internet sales. Some states only collect tax from internet sales if the seller is located in the same state as the buyer. Some states collect tax if the seller owns an office or store location in the same state as the buyer. some states collect tax regardless.

It all depends on which communist state you live in and how fascist they are in extorting their taxes.

 

[22-rimfire]

What you say is mostly true. But what is not generally true is that these sales are not exempted. Collection of the individual tax for the merchant was I suspect too difficult as they would technically have to determine not just the state sales tax rate, but local cities and counties rates. So the responsibility generally fell to the consumer/buyer. In my state, you see a range of sales tax rates depending on where you are shopping.

In my state, there is no personal income tax and sales tax is the dominant revenue stream that pays for state services. Not sure about the break down on property tax and so forth but I suspect a portion goes to the state and a portion to the county or city.

This is a topic I find distasteful since I certainly don't want to pay any more taxes than what are required of me and volunteering to pay a sales tax for a purchase at Cabelas or whatever I find troubling. I'm simply trying to provide that larger picture regardless of whether or not I totally agree with it.

 

[Remo223]

I didn't want to get too much into taxes either, but since we are well down that road, here's how they work AFAIK


wheel tax and fuel tax pays all road costs
county property tax pays all public school costs
use taxes on phones, water, sewer, etc pay for things related to those things which are taxed
municipalities levy sales taxes(only within their jurisdictions) to pay for various municipal costs

State sales taxes should not exist
state property taxes should not exist
state income taxes should be extremely minimal to non-existent

and to keep on topic, nowhere in the above descriptions is there a place to fit an internet sales tax...not on firearms or any other merchandise. I'm not shortchanging roads and road maintenance by buying internet guns tax free.

 

[22-rimfire]

I agree with you. I think I'm going to drop this topic as well.... except for the last statement. Tax is tax and it gets used for whatever need that falls within the public jurisdiction (Federal, State, County/parish, Township if applicable, and municipality).

 

[mgregg85]

Hmm, why would they jack up prices?

Is that a serious question? I'm guessing they do it to make money, pay the bills and so on. If you don't like their prices then try to haggle with them, you might use JG sales as a bargaining chip but if they refuse to work with you then walk away, it'll be their loss not yours.

 

[Rembrandt]

Sadly for many their knowledge of economics came from the public education system.....far better had they gotten a degree from the school of hard knocks and owning a business.

 

[rtroha]

"The very atmosphere of firearms anywhere and everywhere restrains evil interference - they deserve a place of honor with all that's good"

-- George Washington

Guncite says this quote is bogus.

http://www.guncite.com/gc2ndbog.html

 

[gym]

I never bought a gun online. I have been buying selling and trading guns for over 40 years. and I just would feel funny not being able to see and touch the weapon prior to paying my money. There are always things that go wrong in life, I found that when you leave things to chance stuff just seems to happen. The only time I did a transaction was with a fellow who actually sent me his gun, "without me asking", having never met the guy, or spoken to him. He said that knowing I was a businessman and a trader for so many years he felt he could trust me to do the right thing. Weird right. So he sent me a pistol with instructions that said, if you don't want it for any reason, just send it back, otherwise send me a check. Franklly I couldn't believe it myself.
I had seen his ad on another well known site, and asked him some questions about it, and asked if he would be interested in a trade or a cash deal and put in a price I felt was fair. Go figure, most folks would never be as trusting as this fellow.
By the way I kept it.