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Old March 18, 2013, 04:35 AM   #51
CajunBass
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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.
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Old March 18, 2013, 04:56 AM   #52
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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.
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Old March 18, 2013, 06:49 AM   #53
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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.
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Old March 18, 2013, 07:57 AM   #54
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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!
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Old March 18, 2013, 08:11 AM   #55
shuler13
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LGS Ripoff!

Quote:
Originally Posted by Sport45 View Post
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.
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Old March 18, 2013, 08:31 AM   #56
BigD_in_FL
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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".
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Old March 18, 2013, 09:30 AM   #57
Sport45
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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.
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Old March 18, 2013, 09:32 AM   #58
Willie Sutton
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"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

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Old March 18, 2013, 09:40 AM   #59
zincwarrior
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Quote:
Originally Posted by shuler13
Quote:
Originally Posted by Brian Pfleuger
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.

Last edited by Brian Pfleuger; March 18, 2013 at 09:51 AM. Reason: Quote Correction
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Old March 18, 2013, 09:48 AM   #60
Brian Pfleuger
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Quote:
Originally Posted by Willie Sutton
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.
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Old March 18, 2013, 09:54 AM   #61
grizmt
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I had a wake up call when I went to the gun show in Phoenix yesterday. 500 rounds of .22 $250, large/small pistol primers $80 and the list goes on and on.
I am ashamed to say I bought a box of primers and cringed while doing it. I know I was getting fleeced BUT after looking for weeks to find 'em locally to no avail and seeing that when you find 'em online then add shipping and hazmat fees it wasn't that much more ($20-$30) at the show. The biggest reason I decided "what the heck, I'll buy 'em" is that as a newbie reloader I wanted to get started experimenting and figuring out what I'm doing so I just paid for the privilege of getting going now instead of waiting for however long. I've already been looking for 2 months just for parts for my press.

Now that I've got at least the basics to start with I will be able to play with it while I pick and choose restocking supplies avoiding whenever possible paying the scramble premium.
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Old March 18, 2013, 10:02 AM   #62
Willie Sutton
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"I am ashamed to say I bought a box of primers and cringed while doing it. I know I was getting fleeced BUT after looking for weeks to find 'em locally to no avail and seeing that when you find 'em online then add shipping and hazmat fees it wasn't that much more ($20-$30) at the show."



But you miss the point: It did not cost MORE at the show.

Why?

Because it was NOT FOR SALE locally. Not at ANY price.
Goods that are not available are.... not for sale.
$5.00 a box would not have bought them at your LGS.
$1000 a box would not have bought them at your LGS.
So were they worth $5.00 or $1000 a box at your LGS?

The bottom line is that you cannot divide by zero... it's the most basic of math.

Zero goods = an unsolvable math problem = no sale = no value set.
Why? Because you can only determine value if there is a product on the shelf.




The price you paid was FAIR.

Why?

Because BOTH a seller AND a buyer agreed by mutual consent, not by the force of anything other than their own desires, to exchange value for goods in a rate that they both agreed to.


See "Stock Market": I could have bought Berkshire Hathaway stock for $1000 a share a while back too. Now it's over $10,000 a share. Yesterdays price is meaningless to a buyer. It only influences the decisions of the man who already owns it, and the OWNERS DECISION is a binary choice: He can decide to hold it in hopes of additional future gains at the risk of a possible future loss, or to sell it today to achieve the existing gain but to then lock in that decision and to be unable to take advantage of possible future gains.

The ONLY choice a buyer makes is to buy at the offered price, or not. Being a buyer is a LOT simpler from a decision making standpoint than being a seller, especially in the case of a consumable product, like primers or powder or ammo.



Willie

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Last edited by Willie Sutton; March 18, 2013 at 10:14 AM.
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Old March 18, 2013, 10:19 AM   #63
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Quote:
I think you put too much faith in that video.
Or too much faith in the ability of people to understand it.
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Old March 18, 2013, 10:28 AM   #64
t45
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Im starting to regret I started this thread. My only reason was to disuss my displeasure of how the shop was pricing its goods. I will not shop there ever. Other posters want to talk about economics and supply and demand. I understand economics and how a business is run. I will continue to use my LGS that I have supported over the years. He has remained fair thru out all this. His powders and primers are still within reason, and PMC 223 ammo is going for $9.99 (not $22).
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Old March 18, 2013, 10:31 AM   #65
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Quote:
Im starting to regret I started this thread. My only reason was to disuss my displeasure of how the shop was pricing its goods.
Which is a discussion of... economics.
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Old March 18, 2013, 10:34 AM   #66
zincwarrior
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Quote:
Im starting to regret I started this thread. My only reason was to disuss my displeasure of how the shop was pricing its goods. I will not shop there ever. Other posters want to talk about economics and supply and demand. I understand economics and how a business is run. I will continue to use my LGS that I have supported over the years. He has remained fair thru out all this. His powders and primers are still within reason, and PMC 223 ammo is going for $9.99 (not $22).
There you go. Reputation and "branding" are another aspect of free enterprise. You prefer his "brand" and reputation he has built with you. Excellent.
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Old March 18, 2013, 10:43 AM   #67
Brian Pfleuger
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This seems like a good place to stop.
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