Why Prices Go Up

[drk1]

Every wonder why prices go up on firearms? Having worked in gun shops for a long time, I have a pretty good understanding of the manufacturers supply/distribution chain and how that all shapes prices with new firearms. But as a collector it has always amazed me to watch the prices on collector items go up just because. In the old days, i.e. before the internet, there was no reason for an increase other than inflation or some guy sold one just like this one to another fellow, so.... this one must be worth at least that much. Now there is a relatively new wrinkle in the process -- "the flipper". Maybe its all the tv shows that show people buying something and then "flippin' " it, usually making a huge profit in the process. I realize that in the good old days there were guys out there who tried to make money buy and selling guns. Somebody once said it was probably the second or third oldest profession. In any event, the internet has made it into something of a sport, although I view it more like extortion or maybe highway robbery. For example, there was a guy at a show about a year ago that had three tables packed with relativeley nice 19th century items. There were just a couple of issues: 1. Up until two weeks before the show he wasn't a member of the club, but somebody made a "special allowance" not only to let this guy in but rent him tables too; 2. he really didn't know anything at all about what he was selling other than what he found in the latest bluebook; 3. he clearly ripped of an heir or an estate giving all collectors a black eye. In a more recent example, just today, I discovered there is a dealer in Texas who bought an item on GB just a month ago. He drove up the price to the point that he paid more than twice what a similar one sold for just a month before that. Now, a little more than an month later, he has it listed for sale on GunsInt. at a price 1/6th more than he paid for it. Now, before anybody gets bent out of shape at me, it's clear that he can do whatever he wants, but my question is to what extent are actions such as his damaging the collecting community. With the recent problems at the NRA, it's already pretty cut-throat out there; guys like this only seem to be making it worse. In short, his greed is driving up the price way beyond the mechanism of supply and demand. So, I either pay the price or walk away, but if I pay the price, it's only encouraging other "flippers". At the same time, if this guy's price is now the benchmark, I have to raise my insurance, so he's costing me money even if I don't do anything! And then the next person through the door at the local gun shop with a similar item for sale will expect the "on-line" price he/she saw. So it becomes a vicious cycle. It's reached the point that in some speciality areas of collecting, the "flippers" are pushing up prices almost 50% a year! Can that really be good for anyone other than the "flippers."

 

[Barr]

People are greedy, now we can be greedy faster and easier. This is why there is always “that dealer” at the show who has the same over-priced goods for months. If its rare enough and with the right name you have to ask yourself will I see another like it soon at a decent price.

 

[FlSwampRat]

So it becomes a vicious cycle. It's reached the point that in some speciality areas of collecting, the "flippers" are pushing up prices almost 50% a year! Can that really be good for anyone other than the "flippers."

I'm a pawnbroker and I get asked all the time "What is ________ worth?" The simple answer is that something is worth what someone else is willing to pay. I've seen things sell on ebay for more than the same thing sells for new at a brick and mortar store simply because two guys got in a stupid bidding war. If no one is willing to pay the price then the people selling with silly prices on their items would either marry them (have them for a long time) or be forced to get real.

 

[denton]

Why do people raise prices? Because they can.

A few decades ago, Russian buyers scored a coup by simultaneously buying up a large portion of the US wheat crop. Bread prices here promptly went up sharply. Figuring that there is about a pound of flour in a 1 pound loaf, the incremental cost of the Russian purchase was just under a penny a loaf. But, no matter, people who bought bread also bought into the idea that it was now much more expensive, and paid the higher prices.

In roughly the same time frame, a couple of Texas boys succeeded in driving the price of silver up to $35 per ounce. Photographic film and paper prices promptly went up sharply. And they never came down. You'd have to process a huge amount of photographic emulsion to get a few ounces. But people bought into the idea that photographic products were worth a lot more.

If a lot of people believe that old firearms are worth more and more each year, then they are.

 

[jmr40]

I think it is a wash. Sure the internet has made it easier for some guys to make a profit, but it has also driven other prices down. Gun prices used to vary widely by region, especially on classic firearms. The internet has allowed those prices to stabilize across all regions. It has also educated buyers. At one time pre-64 Winchester rifles brought a premium. Any pre-64, but not all of them are collectible. Many are just like any other 60+ year old rifle. Lots of guys have overpaid for some of them and they'll have to let their grandkids make a small profit on them. The internet and technology has educated a lot of people and prevents them from making mistakes.

 

[tarosean]

Every wonder why prices go up on firearms? Having worked in gun shops for a long time, I have a pretty good understanding of the manufacturers supply/distribution chain and how that all shapes prices with new firearms. But as a collector it has always amazed me to watch the prices on collector items go up just because. In the old days, i.e. before the internet, there was no reason for an increase other than inflation or some guy sold one just like this one to another fellow, so.... this one must be worth at least that much. Now there is a relatively new wrinkle in the process -- "the flipper". Maybe its all the tv shows that show people buying something and then "flippin' " it, usually making a huge profit in the process. I realize that in the good old days there were guys out there who tried to make money buy and selling guns. Somebody once said it was probably the second or third oldest profession. In any event, the internet has made it into something of a sport, although I view it more like extortion or maybe highway robbery. For example, there was a guy at a show about a year ago that had three tables packed with relativeley nice 19th century items. There were just a couple of issues: 1. Up until two weeks before the show he wasn't a member of the club, but somebody made a "special allowance" not only to let this guy in but rent him tables too; 2. he really didn't know anything at all about what he was selling other than what he found in the latest bluebook; 3. he clearly ripped of an heir or an estate giving all collectors a black eye. In a more recent example, just today, I discovered there is a dealer in Texas who bought an item on GB just a month ago. He drove up the price to the point that he paid more than twice what a similar one sold for just a month before that. Now, a little more than an month later, he has it listed for sale on GunsInt. at a price 1/6th more than he paid for it. Now, before anybody gets bent out of shape at me, it's clear that he can do whatever he wants, but my question is to what extent are actions such as his damaging the collecting community. With the recent problems at the NRA, it's already pretty cut-throat out there; guys like this only seem to be making it worse. In short, his greed is driving up the price way beyond the mechanism of supply and demand. So, I either pay the price or walk away, but if I pay the price, it's only encouraging other "flippers". At the same time, if this guy's price is now the benchmark, I have to raise my insurance, so he's costing me money even if I don't do anything! And then the next person through the door at the local gun shop with a similar item for sale will expect the "on-line" price he/she saw. So it becomes a vicious cycle. It's reached the point that in some speciality areas of collecting, the "flippers" are pushing up prices almost 50% a year! Can that really be good for anyone other than the "flippers."

How about being specific about the firearm??? Is it some run of the mill crap that can be had anywhere? something that is no longer made? something that has very few survivors? etc. etc. etc.

Lots of reasons little to go by..

 

[AlexanderA]

The bright side is that collectors' guns are a discretionary purchase. If you feel that the price is too high, you can just walk away. You are under no compulsion.

I agree that prices have gotten too high. That's why I haven't bought much lately.

 

[VoodooMountain]

I guess I dont see anything wrong with any of those examples.

Something is only ever worth what someone is willing to pay.

Would the guy with the tables of 19th ce tury guns be less of a crook to you if he genuinely enjoyed those relics? If so why? How do you know he pillaged an estate sale or gave the seller a black eye? Who would let him do that if someone else was willing to pay more?

I guess what I'm saying is that in free market capitalism it takes 2 to tango.

 

[reddog81]

If someone can buy a gun for $50 and then turn around and sell it for $100, more power to them. Assuming fraud isn’t involved that’s how a free market works. Lying to people liquidating an estate, using schill bidders, or lying about the condition of items being sold is just wrong, but that’s been happening since the beginning of time.

What guns are flippers pushing up the prices 50% per year? If this is happening it benefits everyone who owns that gun. In theory it only hurts the buyer, but I have hard time feeling sorry for dudes dropping $10,000’s every month buying up collectibles.

 

[22250Rem]

Lotsa good points here, and IMHO it just boils down to basic Economics 101...... AKA "Supply and Demand"..... I have this commodity... You want it ?.... What's it worth to you?..... You can refuse and walk away or we can negotiate and maybe I could adjust the price so I can make a sale. That's the primary price adjustment tool which is two parties deciding what they consider worthwhile from both viewpoints.

 

[earlthegoat2]

Things can go up in price just because there is a perceived demand or scarcity. Certain folks, lets use a term of the times and call them “influencers”, can by the very nature of making an offhand comment about an item or writing an article(or making a Twitter post) can drastically affect the current market for said item.

Years ago a gun writer wrote an article about the .280 Remington and his first exposure to it. The article was about the .280 as a cartridge but in the article the writer said it was a rifle he had borrowed from a friend and it was a Remington 7600.

Instantly Remington 7600s in .280 Remington, which are already quite uncommon, became highly valuable but also nearly unobtainium. Even GB only has a few auctions a month for them.

In other words, certain folks can create artificial markets if they so desire. Even companies socially engineer situations so they can sell more of their turds that they foolishly overproduced. Marketers are undisputed champions of duping the unaware.

 

[Fine Figure of a Man]

Profit is a good thing.
Greed is not necessarily bad.
Unscrupulous sellers and foolish buyers predate the internet buy centuries.

 

[huntsman]

Since my gun purchases are using guns I’m more than likely buying new, S&W has been playing havoc with their M&P pricing to the extent that guys selling used look silly.

For used guns I always stick to my price so it really doesn’t matter what something’s listed at, if its not worth it to me I’m keeping the money in my pocket.

 

[WiTom]

Health insurance use to cost $30 a month, you could get a bottle of pop for a quarter, you could buy an acre of farmland for $100 an acre, and on and on. If you look at everything else, and compare, guns like an M1 Grand, or a SKS, have just gone up with the supply and demand, and inflation. To me, I am tickled to be buying AR's for under $500, and I think that is a great deal. The nice thing is, we still live in the USA, and free market is still alive, and you still have the freewill to buy and sell, at will, while paying alot of taxes, but it could be alot worse. Just my take.

 

[caribou]

It’s basic Capitalism.

It’s the gouging I don’t like, but demand drives the market.

That’s why guys part out perfectly good rifles, cars, etc.

 

[redneck2]

I used to have some lakefront property. Bought it for $113,000. Sold it four years later (after multiple improvements) for $158,000

If I were the buyer I’d be moaning about the greedy seller making a killing. Since I was the seller, I think it was good business

Just a few years ago you could literally buy truck loads of Mosins for $89 each. Did you do it? If you did, are you a greedy bastage if you sell them for $350?

Oh wait......if I’m the buyer it’s greed. If I’m the seller I’m smart

I do know a guy that literally cheated a widow out of some very valuable, very collectible guns. I hope there’s a special place in hell for him

 

[Steve S.]

If you want to experience wild price swings, deceit, deception, inflation, deflation, pricing fantasy, absolute greed, absolute fear, manipulation by suggestion, inference and the coldest soul of mankind, etc all in mere seconds - try day trading the stock market - you would then view your firearms pricing scenario as child’s play - there is always an ask and bid price for everything.

 

[Bill Raby]

If the buyer and seller are both happy with the price, then it was priced at exactly what it was worth.

 

[Kaybee]

I see this with a lot of collectibles. I collect old fashioned folding knives, and one small manufacturer that I like usually has their entire inventory bought out the week it releases a batch only to have them all immediately appear on eBay for inflated prices.

 

[jmorris]

Prices go up when people will pay more.

Only thing that hasn’t gone through the roof is the NFA tax of $200 set in 1934

A 1934 Ford model 40 was $590.

That would make a tax stamp 33.9% of the value of a new car.

Now $200 wouldn’t get you a set of tires.

Sadly an otherwise $50 hunk of aluminum is worth over $20,000 because they are legally rare, these days.

 

[Thomas Mayberry]

No one is forced to buy anything that is discretionary. Their are many guns that are out of my price range because of buyers with deeper pockets and manufacturers price points, that's life, I enjoy what I can afford. I drive a truck that cost in the mid-range of that models pricing structure because it met my needs without bankrupting me.

 

[George P]

If the buyer and seller are both happy with the price, then it was priced at exactly what it was worth.

This is it in a nutshell; short, sweet and EXACTLY on point.

There is no gouging, no greedy people; either there is a meeting of the minds and an agreed upon price acceptable to all, or there is no deal. What someone ASKS for an item he's selling, and what he actually GETS are not necessarily the same.

 

[Speedo66]

It's not just guns obviously, but any hobby. Cars and motorcycles are similar.

I find it amusing when a vintage car that's undergone a years long no expense spared restoration by one of the higher end restorers sells for an elevated price at a big name national auction. Now Joe Yahoo who has a similar but rusting model which has been sitting in a field, slowly returning its elements to nature, suddenly thinks he's got a treasure worth the same amount.

Same could be said for a 95% firearm with historic provenance that goes for big money at Rock Island Auctions, local shop now thinks its similar model which looks like it was dragged behind a tank for a month has become a valuable gem.

It also cracks me up when at a show a dealer will tell you Joe Shmow brought this rifle back after he earned his Medal of Honor for killing a thousand enemy, despite the import marks from Century Arms.

 

[FlSwampRat]

This is it in a nutshell; short, sweet and EXACTLY on point.There is no gouging, no greedy people; either there is a meeting of the minds and an agreed upon price acceptable to all, or there is no deal. What someone ASKS for an item he's selling, and what he actually GETS are not necessarily the same.

Gouging occurs on necessary items, food, pharmaceuticals, a generator after a hurricane.... There is no gouging ever on optional items like collectibles.

Speedo66 said: It also cracks me up when at a show a dealer will tell you Joe Shmow brought this rifle back after he earned his Medal of Honor for killing a thousand enemy, despite the import marks from Century Arms.

I dislike sellers lying to prospective customers, but I do have to say, I don't have a whole lot of sympathy for someone who doesn't do their own research and thinking. What does it take to pull out a smart phone and check the internet for "When did Century Arms start importing Acme ZY-187's"

 

[Axis II]

I often wonder the same thing! I purchased my Savage axis rifle for about $300. Now normal price is about $375-400 on them. Nothing has really changed on them other than some stocks have a cheek riser. Another gun is the S&W M&P. I purchased my 1.0 for about $400 10yrs ago. The 1.0 went up about $50-75 and now the 2.0 are going up in price. Only difference is the grip is textured and the trigger is better but that could all be done with springs and such. Companies get greedy and want to jack prices up. My 2009 Chevy truck was $22k in 2010 with 10k miles on it. Now a 2016 with 50k miles is $26k