LGS Ripoff!

[Glenn E. Meyer]

That's a great point. If gun laws were wiped away, then Mom and pop stores for generic items would vanish.

You would have specialty stores and smiths around.

The big box store prices would drop significantly.

That's why LGS's sometime support gun show bans. Happened here in San Antonio a few years ago.

 

[Brian Pfleuger]

I think you put too much faith in that video.

My faith is in Free Market concepts, which the video illustrates brilliantly. What I have NO faith in is the governments ability to know what's good for me better than I do nor their ability to execute their promises nor that their intentions are as righteous as they would have us believe, if they can deliver. They're the source of all this "gouging" nonsense, ultimately.

 

[hardworker]

On one hand the higher prices are annoying, but on the other hand, he is doing us a favor. Walmart, with their low prices, makes an attractive stop for people trying to buy it all up and resell at higher (outrageous) prices. By jacking their prices up, they're hurting the gougers by cutting into their margins.

 

[Jo6pak]

Really, another thread about "price gouging"??

Some remedial free market economics classes are if order

 

[Justice06RR]

I've also seen this in my area. One shop is selling used GI mags for $50 each, while another is selling new Pmags for $27.

Tell me where the sense in that is.

Obviously I won't buy from the shop that's selling the used mags for $50.

 

[shuler13]

It makes some logical connections but also makes some assumptions that are not consistent for every situation.

I'll start with the storm - insulin - refrigerator thing. Insulin is fine out of a refrigerator for a month. But people often get a three month supply at a time, so we can move on. Power outages don't last long, maybe a couple of weeks in extreme cases.

Comparing a generator shortage in a power outage is different than an ammo shortage. Power is a utility. Shooting by and large is a hobby. There is a difference between supplying a utility and supplying equipment for a hobby. Knowing that the run on firearms plus a politically induced panic has strained ammo supply, the opportunists are now buying available supply and reselling. It's not like a natural event has lead to a shortage of brass. People created this demand. The suppliers will adjust and prices will go down as shelves are reapplied. Until then this is immoral gouging. This is taking advantage of people that don't know better or other people's panic. You still have what the video pointed out as a system where the only people that get supplied at a fair price are those that get there first at stores that aren't raising prices. And if those that got there first used the product, I would be fine. But it's not. Its advantageous people reselling for a profit. This is removing supply where people that would use it typically look and then increase the cost for their own gain.

And the storm scenario relies on a regional differential where other regions would bring in more supply bringing prices down. This shortage isn't regional. It's national.

A better solution (if it were possible) would limit purchases for those that use until production catches up. Combined with strict punishment for the individual gougers and resellers.

As a business, I understand the need for inventory and if a store is only getting a fraction of their replenishment, then a modest increase in price to keep the lights on and pay employees is expected. If your store needs to sell 100 boxes of ammo a day to pay the staff, and you only get 25 boxes a day in, then I would see why a store might need to increase profit margins on what they do have to sell. Keep in mind, these are the same stores whose sales skyrocketed in November and December. A little foresight would have put some money away to keep things going while re-supply was going to slow.

Economic theory is just that. The real world doesn't always work in a vacuum. Theory works for the moment. You have to see the long term picture. Customers have a memory and they don't like getting doinked. When they needed something most and you charged them triple or more ($250 for a brick of 22) they'll keep that in mind. A store that does that will force their customer base to look elsewhere as if B&M gun stores didn't have enough problems keeping customers as is.

A store gouging is doing it wrong. They are taking advantage and it is immoral. I don't care what that video says. Limit the sales if you need to. A short term premium if you need to. But don't take advantage. And to those of you individual entrepreneurs standing in line at Walmart when the truck comes in then heading to the gunshow and earn a ridiculous profit are just wrong.

The better solution for people is to help each other out while times are lean and return the favor when we are flush with supplies in a few months. That's what should have happened in the video. The guy should have been able to find a person that had a generator and asked for a favor "please refrigerate my sick kids meds".

 

[22-rimfire]

Think I know the store. They had Glock mags for $60 each. That is more than I paid during the last "AWB" period. They can keep them. Also charging full retail on many guns or even higher. Don't even ask me about AR's....

 

[jmr40]

Charging unfairly high prices for food and other items necessary for survival in an emergency situation is gouging. None of us are likely to die if we cannot afford to buy a box of bullets.

 

[Brian Pfleuger]

It makes some logical connections but also makes some assumptions that are not consistent for every situation.

I'll start with the storm - insulin - refrigerator thing. Insulin is fine out of a refrigerator for a month. But people often get a three month supply at a time, so we can move on. Power outages don't last long, maybe a couple of weeks in extreme cases.

One, it's an example. Proof of concept. The subject being insulin is an example.

Two, tell the folks on Long Island that were without power for near 2 months after the last Nor'Easter, that "power outages don't last"

Third, even the power outage is an example. Proof of concept. It doesn't have to be generators or insulin. It's the over-arching concept that matters, not the specifics. Picking apart the specifics of the analogy of the generator and insulin is to completely miss the whole point. It applies to ammunition just as easily.

Comparing a generator shortage in a power outage is different than an ammo shortage. Power is a utility. Shooting by and large is a hobby. There is a difference between supplying a utility and supplying equipment for a hobby. Knowing that the run on firearms plus a politically induced panic has strained ammo supply, the opportunists are now buying available supply and reselling. It's not like a natural event has lead to a shortage of brass. People created this demand. The suppliers will adjust and prices will go down as shelves are reapplied. Until then this is immoral gouging. This is taking advantage of people that don't know better or other people's panic. You still have what the video pointed out as a system where the only people that get supplied at a fair price are those that get there first at stores that aren't raising prices. And if those that got there first used the product, I would be fine. But it's not. Its advantageous people reselling for a profit. This is removing supply where people that would use it typically look and then increase the cost for their own gain.

And the storm scenario relies on a regional differential where other regions would bring in more supply bringing prices down. This shortage isn't regional. It's national.

A better solution (if it were possible) would limit purchases for those that use until production catches up. Combined with strict punishment for the individual gougers and resellers.

As a business, I understand the need for inventory and if a store is only getting a fraction of their replenishment, then a modest increase in price to keep the lights on and pay employees is expected. If your store needs to sell 100 boxes of ammo a day to pay the staff, and you only get 25 boxes a day in, then I would see why a store might need to increase profit margins on what they do have to sell. Keep in mind, these are the same stores whose sales skyrocketed in November and December. A little foresight would have put some money away to keep things going while re-supply was going to slow.

Economic theory is just that. The real world doesn't always work in a vacuum. Theory works for the moment. You have to see the long term picture. Customers have a memory and they don't like getting doinked. When they needed something most and you charged them triple or more ($250 for a brick of 22) they'll keep that in mind. A store that does that will force their customer base to look elsewhere as if B&M gun stores didn't have enough problems keeping customers as is.

A store gouging is doing it wrong. They are taking advantage and it is immoral. I don't care what that video says. Limit the sales if you need to. A short term premium if you need to. But don't take advantage. And to those of you individual entrepreneurs standing in line at Walmart when the truck comes in then heading to the gunshow and earn a ridiculous profit are just wrong.

The better solution for people is to help each other out while times are lean and return the favor when we are flush with supplies in a few months. That's what should have happened in the video. The guy should have been able to find a person that had a generator and asked for a favor "please refrigerate my sick kids meds".

There is ZERO moral consideration on pricing ammunition. None. Zero. Nada.

First of all, the sellers set an ASKING price. They have absolutely no power to set the selling price. They're making a suggestion.

The BUYERS set the SELLING price.

I can ask $500 for a box of 50 22LR cartridges. Is that immoral? Nope. Some guy walks in the shop and says "What are you!? Freakin' Nuts!? No way am I paying $500 for that!"

He doesn't buy it. Hm. I guess I, the seller, didn't set a selling price, did I? It didn't sell.

He goes next door and buys it for $5.

What do I, wishing to sell, HAVE to do? What am I FORCED to do, by the buyer?

I am forced to lower my ASKING price until it matches someones BUYING price. The buyer, the one who CONTROLS pricing.

Now the shop next door is out of ammo. The buyer can't get it for $5 anymore. I the seller, will ask $10. Will the buyer pay it?

WHO KNOWS!

What I do know is that the seller can not CONTROL the price. The buyer buys or does not. If he does not, the seller either lowers his price or does not sell the item. The power lies with the BUYER.

I can't believe that people think there should be "strict punishment" for people selling ammunition and guns at some certain price. That is positively disgusting. Completely contrary to the American system. Free market ideas. Absolutely asinine.

 

[shuler13]

I see firearms enthusiasts as a community. As such it is immoral to screw your neighbor.

If I take from the supply when times are lean, therefore making the lean times leaner, in an effort to benefit at the expense of those without, it's immoral.
Your screwing a member of the community.

If I happen to already own when the supply gets lean and sell at a premium that's a different story. In this respect you aren't making the problem worse.

I don't have a problem of people selling guns and ammo for a profit. I do have a problem with people exacerbating the issue for a few bucks. The bigger downside to the community is that we have a bunch of new shooters trying to explore what we already enjoy. If they get hooked, that benefits the whole. If they get turned off before they get into shooting routines, we miss the opportunity of gaining membership and support.

I know the example in the video was an example but I believe the different situations are different. There is a difference in gouging essentials and gouging hobbies. There is a difference when the problems are regional and alternatives are available.

When the supply catches up, and it will, there will be many unhappy people with a sour taste in their mouth about how quickly people raked each other over the coals for something as simple as ammo and magazines.

 

[CajunBass]

Are they still teaching economics in high school, or are students just not understanding the material?

I struggled with some principles of economics, but supply and demand is about as simple as it gets.

Back when I was in high school, the first thing my economics teacher said, the first day in class was that economics should be a required subject.

Obviously, he was right.

 

[Sport45]

shuler13, I went back and read every one of your posts in this thread and I still can't tell for sure which side of the fence you are on. One minute you say it's "immoral" and the next you say "A short term premium if you need to" is okay.

You also propose strict punishment for resellers. You aren't much in favor of individual freedoms, eh? What's next, will you be telling us we don't "need" to buy more than X rounds a month?

You are starting to sound like the folk trying to say we don't "need" more than 10 round capacity magazines and the like.

As was mentioned above, it's the buyers, not the sellers who determine market price. Morals have nothing to do with this, it's business. And no, not everyone who sells guns and ammunition is a gun enthusiast. Not even the ones who own the gun stores. To be successful in business you have to take care of the business first.

 

[Uncle Buck]

If you truly, honestly believe it is price gouging, then please contact your states attorney generals office. Most states, I believe, have laws about price gouging.

I still think it is OK (I do not like the prices, but I do not believe it is illegal) for a business to get the going market price for their goods.

I have a box of ammo that cost me $10.00. I sell it for $15.00 and make 50% profit on it. But in order for me to replace that item in my inventory, it now cost me $14.00, am I gouging my customers when I sell the item for $21.00?

My fixed operating costs are not as fixed as everyone believes. Maybe my electricity/gas bill has gone up this month due to weather. Guess who pays for the transportation costs of the items I sell? Insurance rates always seem to go up.

If I continue to sell at prices I did four months ago, I will have to eat in to my safety supply of ready cash to cover re-supply. I am a business person, not a charity.

 

[Redhawk5.5+P+]

t45, I don't think you understand the word ripoff!

Do they still have the ammo in stock? Yes? So,...if you really ("really!!") need it, they have it!

 

[shuler13]

shuler13, I went back and read every one of your posts in this thread and I still can't tell for sure which side of the fence you are on. One minute you say it's "immoral" and the next you say "A short term premium if you need to" is okay.


You also propose strict punishment for resellers. You aren't much in favor of individual freedoms, eh? What's next, will you be telling us we don't "need" to buy more than X rounds a month?

You are starting to sound like the folk trying to say we don't "need" more than 10 round capacity magazines and the like.

As was mentioned above, it's the buyers, not the sellers who determine market price. Morals have nothing to do with this, it's business. And no, not everyone who sells guns and ammunition is a gun enthusiast. Not even the ones who own the gun stores. To be successful in business you have to take care of the business first.

I'll try to clarify, but I don't expect you to agree. I think there is a difference increasing the price and what I would consider immoral gouging. For example, I'm going to venture a guess that a 525 round box of 22lr pre panic ran about $15-20. I assume (which always gets me into trouble) is anywhere from 10-30% over cost. The retailer makes $1-5 per box. Lets assume this retailer on average sells 100 boxes a month. Enter the shortage and the retailer only gets in 50 per month and he has buyers who want to purchase 300 at the old price. I understand the retailer has fixed costs that need to be recouped on less inventory so he has to raise the price. This I understand so I would expect, during a shortage that the business has some decisions to make.

1)He could revisit freshman economics and adjust price so the number of buyers = supply. No shortage, no surplus. Priced way up, Costs are the same and profits increase. Many customers in the store saying *** and posting on boards complaining
2) he could increase the price enough to cover the loss in supply to cover his operating costs (say from $20/box to $25/box) until supply returns and not limit purchase limits. Prices up a little Costs are the same, profits are usual, one person buys up inventory and a shop of customer coming in every day cussing the lack of inventory and heading to the boards to bitch
3) he could increase the price enough to cover the loss in supply to cover his operating costs (say from $20/box to $25/box) until supply returns and instill temporary purchase limits. 100rds of practice ammo for up to three calibers a month. Costs are the same, profits are usual, many partially satisfied customers with ammo and fewer people on the boards griping about being screwed or a lack of ammo.

The first seems wrong. The person who benefits in the owner who profits a great deal without any increase in costs to them.

As for resellers, I don't like the idea of a person surfing walmarts after the trucks arrive collecting ammo, thereby removing inventory from people wanting to purchase for use that are too busy working to wait around, exacerbating the shortage, for their own personal gain. I'm seeing $20 boxes of 100 count federal 9mm being listed for 3-5 times what they paid for it.

That is different than the guy who has 5000 rounds sitting at the house who is willing to sell at a high price. This person didn't make the panic worse. He's bringing an option to the table.

And no, I'm not for magazine limits, that's not the issue being discussed. I am for individual freedoms, but I really dislike the vulture mentality. If you provide a service, get paid an honest wage. Ammo hawking gougers are not performing a service, they are selfish people making the problem worse.

"Morals have nothing to do with this, it's business."
You know what class was taught right after economics I and II? Business ethics. Morals and business are not exclusive. Morals should be involved in every business decision you make. Take care of your business. Earn a profit. But keep in mind, a business should be a long term venture and if you want customers to come back, treat them well especially in the lean times. Be honest. Be fair. If your costs go up and you have to raise the costs, share that. If your supply drops and profits take a hit, explain that's why the price went up. Assure them that when things go back to normal, so will your prices. People will understand, and they'll come back time and again.

 

[BigD_in_FL]

When a hurricane rolls thru and all water and power is knocked out, are you going to say to the guys selling water for $10 a gallon or gas stations charging $7 a gallon for gas, "Oh their just trying to make money". You suggest if you don't like the prices, don't buy there. Maybe if you read my thread completely, instead of going on the attack, you would have seen that I didn't. My point is that we all need to stick together and refuse to pay these crazy prices and remember the shops that are taking advantage. And support the shops that are treating their customers fair with all your business.

If someone has water for $10/gallon and folks are WILLINGLY paying his price, then it is NOT gouging. IF you watched that video I linked to, you would understand how letting the market set the price actually helps in the long run because folks outside the area will bring in more supplies - more supplies means lower prices as supply/demand curves converge.

Sticking together and NOT paying their prices is how you get them to be lowered, not coming on here ranting about how they are a "ripoff".

Those mags Glenn mentioned at $69 each at the show - that seller has no idea what the market will bear, so you start out high and see if anyone bites. If not, you lower the price until they start to sell. It is always easier to lower than raise a price at a show. What if he had sold then at $29 and someone bought them all, went to his own table and was able to sell them for $50? That first seller just lost money.

Just like the story of the woman who goes to a local meat shop and asks the butcher how much his chickens are. "$3.79 per pound". She responds "That's gouging and rip off! Sam across the street is selling them for $1.79 per pound". The butcher asks her why she isn't across the street then buying chicken over there. She responds, "because he doesn't have any".
The butcher responds to her by saying:"Well, when I don't have any chickens they'll also be $1.79 per pound".

 

[Sport45]

3) he could increase the price enough to cover the loss in supply to cover his operating costs (say from $20/box to $25/box) until supply returns and instill temporary purchase limits. 100rds of practice ammo for up to three calibers a month. Costs are the same, profits are usual, many partially satisfied customers with ammo and fewer people on the boards griping about being screwed or a lack of ammo.

How on earth do you expect a gunstore to police something like that? So now we don't only have to have every seller wearing a halo, but every buyer will have to as well?

I don't live in Utopia and I'm afraid I can't even see it from here.

 

[Willie Sutton]

"I think there is a difference increasing the price and what I would consider immoral gouging."



The only "morality" in business is the obligation to look out for your own good. That "morality" is on both sides of the table. You look out for your own interests as a buyer, and sellers look out for theirs. When value is exchanged for value, it takes both sides to agree. Nothing more, and nothing less.

Don't like the price? Don't buy. Find it elsewhere cheaper? Buy it. When you still need or want the product and the second guy is out, you might rethink patronizing the first place at his price, or you might do without. That's business.


A little Ayn Rand to enrichen the mind:


There is no such thing as "a right to a job"—there is only the right of free trade, that is: a man's right to take a job if another man chooses to hire him. There is no "right to a home," only the right of free trade: the right to build a home or to buy it. There are no "rights to a 'fair' wage or a 'fair' price" if no one chooses to pay it, to hire a man or to buy his product.

In a free market, all prices, wages, and profits are determined—not by the arbitrary whim of the rich or of the poor, not by anyone's "greed" or by anyone's need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants. Men trade their goods or services by mutual consent to mutual advantage, according to their own independent, uncoerced judgment. A man can grow rich only if he is able to offer better values—better products or services, at a lower price—than others are able to offer.

Wealth, in a free market, is achieved by a free, general, "democratic" vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs. No one has the power to decide for others or to substitute his judgment for theirs.

Any undertaking that involves more than one man, requires the voluntary consent of every participant. Every one of them has the right to make his own decision, but none has the right to force his decision on the others.

The economic value of a man's work is determined, on a free market, by a single principle: by the voluntary consent of those who are willing to trade him their work or products in return. This is the moral meaning of the law of supply and demand; . . . It represents the recognition of the fact that man is not the property nor the servant of the tribe, that a man works in order to support his own life—as, by his nature, he must—that he has to be guided by his own rational self-interest, and if he wants to trade with others, he cannot expect sacrificial victims, i.e., he cannot expect to receive values without trading commensurate values in return. The sole criterion of what is commensurate, in this context, is the free, voluntary, uncoerced judgment of the traders.



Altruism is for church. Business is "Just Business".



Willie

.

 

[zincwarrior]

I marvel how, when a dealer wants $1000 for an item that the buyer thinks is worth $500, it's a "ripoff" and "gouging" but that same buyer walks into the same store and the seller has a gun that the buyer thinks is worth $1000 and it's marked at $500, he seems to have no moral objection to paying a lot less than it's worth.

I marvel at how one of my LGS has raised prices by 60%, but two others have not. I also marvel when someone says the dealer can charge whatever he wants and if people dont want to pay that, then they can go somewhere else. I frequent the shops fairly often, and when a dealer has a Beretta Neos, or Ruger 22/45, and the price goes up $150 overnight, then they will never get my money EVER again. Its a simple as that. I dont forget. I will support the shop that didnt try to get as much money out of my pocket as they possibly think they can.

That too is free enterprise. You don't have to buy from them. You don't have to buy from them ever. You can spread the word about why you're not buying from them as well.

its not just caveat emptor. Sometimes its caveat venditor as well.

 

[Brian Pfleuger]

The only "morality" in business is the obligation to look out for your own good. That "morality" is on both sides of the table. You look out for your own interests as a buyer, and sellers look out for theirs. When value is exchanged for value, it takes both sides to agree. Nothing more, and nothing less.

So, true. And I love how folks seem to completely over-look the fact that artificial price restrictions or the potential for legal retribution actually delay or completely prevent the normal market supply correction that would restore availability and ultimately reduce prices.

It's funny how "price fixing" is such a horrible thing when it's a "high" price but we demand government mandated price fixing to maintain artificially low prices.

I also find it amusing that folks think that the "pre-panic" pricing was somehow a "fair price" that the sellers set, out of the pure goodness and benevolence of their innocent hearts. Naivety.

I can assure everyone that what ever the market price is, it is the HIGHEST price that the average buyers will willingly pay while still buying sufficient quantities to maximize profits.

Market price is not the benevolent sellers keeping prices as low as possible for the good of the buyers. Market price is the highest price that buyers will willingly pay. If they'd pay more, the sellers would charge more.... hence current conditions. Note, still, that it's the BUYERS setting the prices. The sellers can not raise them higher than the buyers will pay.