A Firearms Business Owners Perspective on the current market.

[TapRackNGo]

Carried over from the AR15.com board.



Hello everyone.

My name is ***** ***. I am one of several people on this board who run a firearm enterprise. Many of you have met me, many of you have not. Many of you find me to be charming, knowledgeable and downright hilarious. Others regard me as the scum of the earth. Oh well. We live in a free country, and that is how it goes. However, in our free country, we have a free market and just like being offended by someone is a by-product of living in a free country, we have people being offended by higher prices.

Our free markets allow consumers to dictate what price they wish to pay and sellers to dictate what price they wish to sell. During the past four days, buyers are making a run on guns. Imagine the run on the Bailey Building and Loan, just in reverse with people throwing money at me.

Demand has gotten so high that vendors are curtailing deliveries of product. There is not a single PMAG to be found wholesale, or glock magazine, or SCAR rifle, or many other things that people are fearfully buying by the shopping cart full.

In the past four days, I have been reticent to sell merchandise but I have. Each time, I have tried to talk buyers out of buying in this environment and my concerns have fallen upon deaf ears and fat check books. The value of a number of guns I have ordered for stock has doubled, and in some cases tripled - with no end to the demand in sight and no supply in sight either. Each day that goes on, prices rise 15, 20, 35% with no end in sight. Each day, I'm able to sell for a higher and higher price. I don't like this.

These conditions make running a business impossible.

Some of you will complain of what is commonly called price gouging, others will extol the virtues of a free market. And that's fine, but something that people yammering on and on about perceived price gouging do not take is that one simple fact remains: the income derived from my business from buying at wholesale and selling at retail covers my business expenses, my personal expenses and supports my family.

You may think that someone asking $50 for a Glock magazine is highway robbery, selling a Colt rifle for $2200 should be considered fraud, and $75 for a PMAG is a disservice to your second amendment brothers.

I'd be inclined to agree with you. However, wholesalers are restricting access to product and every day goes by, I have less and less to sell. This isn't just black rifles and PMAGs either. There isn't a Glock magazine to be found right now. There isn't a Glock 19 to be found right now either. Yes, some dealer sold 100 PMAGS for $7500 earlier today. That represents $6500 in profit that was made because of speculative buying. But here's the thing.

If I sell that carton of PMAGS at $7500 and make that $6500 in profit, or I sell that AR and double my money, or I sell 20 glock magazines and triple my money......

I might have to live on that profit until a vendor sells me more product to sell. That could be a week, a month or a year.

Can anyone here honestly say that if their employer handed them a check for $10,000 for a week's work and then put them on furlough for an indefinite period - they'd be comfortable with that? I would not like that one bit. Everyone I know would be nervous with such an event, but that is the present reality.

I do not like charging anyone more than I have to. Those of you that know me know that I try to do good work at a fair price consistently. When a certain item is hard to find, I charge more like everyone else and when it is easy to find I charge less. With conditions the way they are, dealers have to get market price or top dollar out of economic necessity.

How would you like to see your favorite clerk who knows what you shoot, what your favorite ammo is, and what your favorite targets are and what lane at the range you like the most be unemployed because the house has no product to sell, no profit and is unable to pay them? I wouldn't want to do that as an employer and I wouldn't want to see that as a customer.

The business conditions have changed prices and the operating environment has changed prices. As such, I have changed with them.

Yes, this is the business we have chosen willingly but selling merchandise at market rate is not gouging or profiteering. It is simply economic necessity. I did not have a warehouse of Daniel Defense rifles or crates of PMAGS. I had some PMAGs. I had some rifles. The dealers that have the luxury of warehousing 100 name brand rifles are going to make $100,000 in a week in profit. Good for them. Their next delivery will be unknown just like my next delivery will be unknown.

Please keep what I've said in mind before you belittle anyone for pricing something consistent with what they are selling for on gunbroker.

An good article on the "gouging" from a dealer. - AR15.COM

Read More

 

[RBid]

This is accurate. I work in the business. I have looked at distributor sites over the past two weeks, and have seen them dry up.

What has been missed by even the more aware folks is that this has come at a time when production has been substantially increased by manufacturers. Ruger, S&W, etc have had well publicized growth in production this year, and still can not keep up.

Even further investment in production increases (unlikely, while facing a probable ban) could not correct this in the near future.

 

[BoonDocks36]

I was going to post this elsewhere on this forum, but here goes.

I went into my favorite store, looking for XXX semi auto. They had ONE. No price tag.

Just then one of the (very busy) back of counter men asked if he could help? "No price tag"????

He gave it to me straight: it just came in on consignment, Never Fired, bought at YYY for $ZZZ, and the seller wants $WWWW.

This gun store will have all my business.... in fact I bought a Gen 4 Glock just five minutes later, just because of his Truth in advertising.

NOTICE: all names left out, he even commented to a fellow customer who the consignee was, as they were pals, apparently.

Dear Gun Store owner, I understand your plight, but the gall of a consignee trying to profit off an event sort of riles me... I had the money for it, but not ~that one~ for that reasoning.

I wanted to buy, as a Statement of Protest to dotGOV and their anti hig capacity bubblegum.

philip

 

[maxord precision]

The guy is absolutely right to a point. Business inflating their prices to a reasonble level is to be expected, however, every joe schmuck that went and bought stores out of pmags to put them on here and every other forum for a profit is just an ***.

 

[andreys21]

OK, I can understand that, but lets say that a month or two from now everything normalizes and the AWB gets shot down. Things return to normal as far as supply and orders are filled on time. Are you going to offer great discounts on your products, sell things at dealer cost, give away free stuff, give more value on trades? Or maybe you should put this money away into the bank so when this bubblegum happens again, you wouldn't have to mark everything up 100-300% and sell stuff for regular prices. If you run out, close shop for 2 weeks and enjoy your vacation, cut hours. But what do I know? I do know that I'm not paying triple for anything.

 

[JTB0311]

Very well said Taprackngo.

 

[Cue772]

No complaints here... if someone is willing to pay you 10X the value for an item, let them do it. Is it an inconvenience? Yes. Is the the retailer? Not if someone is paying him. Is it the freaked out idiot who needs to add another Glock 19 magazine to his collection of 500 already? Yep.

Let him pay it.

 

[tcs#1]

I've been in this business for awhile and still remember the paranoia of 2008-09...It took the industry over a year to recover from that and now it begins yet again...Now we have to stand around and explain over and over why there is no product on the shelf...it's frustrating for everyone....

 

[Spadkarma]

I've been in and out of the business since 1992. Working as a "Counter Monkey", gunsmithing and the last few years as a Buyer. I remember the '94 ban and the primer shortage. Spent alot of nights building ARs after the ban. I recently remember the primer shortages of 2000 and 2008 and the run on ammo in 2008. I can tell you its not getting any easier to be on "The other side of the counter" from most of you. I can tell you that last summer (2012) our place was as empty as a ghostown and we had plenty of stock on hand. I also remember last July when we couldn't sell an LE6920 at $999. There are good times and bad times. Everything we sell is on people's "Want List" not "Need List".

 

[davemata]

Is NWF anti-profit?

If I buy 100 PMags, and sell them for 10x what I paid, they won't sell until a buyer willing to pay that shows up. Simple. Supply, meet demand. Go be friends. Anyone whining that prices are out of their budgets needs to do one of three things:
1. Grow up and wait.
2. Make more money.
3. Find a better deal.

That's really all there is. In fact, with the way prices are going, I'd strongly advise people to just do #2, and get on with life. Prices won't be dropping for a while.

Personally, I'm eyeing a big order of pmags that I will post here at market rates in order to make a tidy profit.

 

[Simonpie]

I always like to find the silver lining.
What price fluctuation does is shake out the safe queens. We all know somebody who bought a few rifles, then realized that 1 or 2 aren't exactly what he or she likes. They bought them new for a grand and now they're $800 used, so they just sit on them, maybe shoot them once a year. A short price spike gives an incentive to sell. Sure, an economist will say you held them at market value, and now you're selling at market value, so you haven't gained anything, but the human mind doesn't work that way. A little product fluidity is a good thing. Maybe those safe queens will get out the the range once ammo prices come back down.

 

[redmud]

I suspect with all the panic buying everyone who wanted one that could afford one got it, barring a awb wholesalers and dealers will be staring at some stock for a long time when things settle down driving prices down but mags and upgrades will be hard to find.

 

[deen_ad]

I'd strongly advise people to just do #2, and get on with life. Prices won't be dropping for a while.

Lets see, due to the minimum wage going up here in WA I just got something like a 9¢ an hour raise. And what is that going to do to make up for my wife being off work since late Sept and the medical bills coming in?

 

[Nwcid]

Lets see, due to the minimum wage going up here in WA I just got something like a 9¢ an hour raise.

What is worse is that will be a NET loss of your available income as ALL the products and services will have a greater increase in price then the increase in wage.......

 

[ATCclears]

As mentioned in this thread and other threads, what we are witnessing is simple supply and demand, combined with a level of panic buying. You can either jump into the fray or sit on the sidelines and watch. This is the reality of a free market.

If Federal legislation passes and there is a ban, then the people who paid recent prices may still be happy. If legislation does not pass and supplies eventually catch up with demand, then the people who paid recent prices may not be happy if prices return to say Oct 2012 levels.

Peter

 

[Dan-Dee Sales Inc]

Here are a couple of items from our Distributor.

9mm
They carry 46 sku's but only have 1 in stock. They have 8 boxes of lead free for $50.00 a box

22LR
They carry 83 sku's but only have 4 in stock. They have 3 kinds of shot shells and 1 kind of subsonic.

You can do this almost everything out there. I feel sorry for a gun shop that cannot get any stock for their store.

 

[shooter58]

I thought true price gouging was the inflating of prices of "necessities" during times of disaster or crisis. Food, water, fuel or other things necessary to survive. Although I am not happy (disgusted actually) with the inflated prices at the gun store and the lack of availability of guns and ammo, I'm not sure you could classify what is going on as "price gouging". Panic on the part of buyers and survival mode on the part of store owners seems more appropriate.

 

[ThePhonMan]

Unfortunately, if this insanity doesn't end soon, we may see some small gun shops falter or even go out of business as a result of lack of product to put on their shelves. Especially if they didn't "gouge" customers when they had items in stock. Lack of replenishment means lack of income, which can create a death spiral for a business due to cash flow issues. Imagine not getting a paycheck unexpectedly for a period of a month or two. We'd all probably have to make some dramatic changes to stay afloat but what if we had no idea when the income drought would end? And there's no "government safety net" for these entrepreneurs.

A company with insufficient capital reserves could not withstand an unexpected multi-month shortage of their primary products without impacting their bottom line and lets face it, most of our local gun shops are small businesses that pour their heart and soul into what they do. I doubt they are rolling in the dough to ride out a lack of sales for extended periods. Rent, utilities, payroll, taxes, etc. don't just go away while they stare at empty shelves.

They also get the joy of being yelled at by every frustrated customer that walks in and out of their shop. So when exactly does the fun part start?

 

[BoonDocks36]

I think topics like this are confusing the issue.

Snipped to: I fail to see why anyone would go buy a rifle for political reasons.

Very easy answer to that: with NICS, Every gun sale shows up, and the HIGH INCREASE in sales makes a vote that really state Facts.

"I vote, I vote with my Money, and my $$$ bought a high cap side arm"

Am I ~worried~ that dotGOV knows me "Now"? they knew me, (and you, and every other FFL purchased gun owner) Already!

It was an Act of Defiance to have purchased what I bought, WHEN I bought it. I wanted one as well, is besides the point!

I am Free, I will die free, I am not afraid of dotGOV.period.

History..... the Concentration Camps, full of Ethnic Hebrew citizens.... had a song. It was Illegal to sing it, yet it was sung, quite often. The Singer(s) would be shot, upon singing it. But sing they did.

Gei Danken Sind Frie, hopefully my aged German spelled that correctly....

It states in English, ..."My thoughts flowing freely"....

Aware of this websites secular nature, I will only say this: I have not been afraid to die, since 1968, when I was merely 18, and enlisting into the U.S.Army. I know where I will be, when I exhale for the last time.

I am not afraid to Die, The Tree of Liberty was born on that kind of blood, from that kind of thinking.... Threaten me with AWB? PaShaw, I have been to VietNam.

Since then, I have had Four Guns pointed at me... IYKWIM... I stood my ground, they backed down.

We live in interesting times....

philip, in the Boondocks of HWY36

 

[dobeman]

some people are choosing to trade federal reserve notes for guns and ammo - a route out of the dollar. What next? Weimar Germany - stories of people racing to buy anything - bed pans - to dump their rapidly depreciating German marks. Albeit, this is a localized run on the dollar - only among so called gun nuts. Question is, will said guns bought at inflated prices hold their value over time? Or will the prices come down in future dollar terms? Who knows. Though guns and ammo may very well be a future alternate currency to paper federal reserve notes.