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Old August 1, 2020, 10:31 AM   #1
Oldjarhead
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Price gouging handgun sales

I live in central Texas. I was checking out online at the CZ USA website,where the CZ 75 D PCR 9mm pistol, listed MSRP as $617. I check several local retailers in my county, and discovered that they all had the same gun, selling for over $1200! Is this price gouging happening in your locale?
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Old August 1, 2020, 12:25 PM   #2
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Price gouging, yes, but that’s supply and demand for you. Something is only worth what someone is willing to pay. Combine riots and a pandemic and now Everyone is buying firearms which is driving up prices. The free market will eventually correct itself and supply will come back along with prices returning to normal. Same thing happened with tp and hand sanitizer so this is no different
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Old August 1, 2020, 01:08 PM   #3
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Around here, gun prices are crazy high. But ammo prices are even worse. Assuming you can even find ammo that is.

Fortunately for me, I've been stocking up and reloading for quite some time.
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Old August 1, 2020, 01:38 PM   #4
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Good grief it ain't price gouging....its called capitalism.

OP has never run a retail business.
Pricing your inventory based on what it cost you will lead you to going out of business. Successful retailers base their pricing on replacement cost.
Ex. Dealer cost is $500, MSRP is $617, he retails item for $525.
That's great as long as he can reorder at $500.

But what happens when he's selling at $525 and the manufacturer or distributor raises their price to $530? Poof! goes his profit.

So what does a store do when the distributor is out of stock? When the manufacturer can't supply distributors with the quantity the market demands?
You raise your retail price to what the market will bear. If that item will sell at $1200 it may be the last one he'll sell for many months. That may keep his doors open for another day.
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Old August 1, 2020, 01:42 PM   #5
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Good grief it ain't price gouging....its called capitalism.
+1!
Dogtown is exactly right

If you WILLINGLY pay a seller's asking price, then it is not gouging as you consider the trade of dollars for product to be worth it to you. If you don't like his pricing, you don't buy it. If no one buys it at that price, retailers then have these things called "sales" where they drop the price until it does sell.
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Old August 1, 2020, 04:54 PM   #6
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I think I will wait, until some sort of sanity and normalcy returns, to even think about buying another gun.
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Old August 1, 2020, 04:56 PM   #7
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This is a shameless plug for the Fleet Farm store in Minnesota. They do NOT seem to raise their prices even when they could. They sell stuff at the regular prices and when it gets all bought up VERY quickly then the shelves are bare.

During the great .22LR shortage of a few years ago I was looking at a shelf filled with bulk packages of .22LR for $15 a package. I dithered a bit and then took a box. As I moved on a guy who had been (politely) waiting behind me swept all the bulk boxes off the shelf into his cart. THAT'S what causes the ammo shortages.

Right now at Fleet Farm half the handgun display cases are empty and about 90% of the handgun ammo cases are empty but they did have a few, about 4 boxes of .357 magnum on the shelf at $22 for a box of 50. Which I think is about what they usually go for.

BTW here's a (IMhO) humorous response of a store manager in Australia on his response to a guy who wanted to return 150 bulk packages of TP and 150 quart bottles of hand sanitizer. Good on him!
https://www.youtube.com/watch?v=MyddDQFL0zc
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Old August 1, 2020, 05:27 PM   #8
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@DaleA

I’ve been going to Scheels out in Eden Prairie. Their prices seem pretty fair but they also have a 1000 round limit on ammo. 9mm goes pretty fast and they appeared to have adequate stock of 22lr. Gun prices also seem fair as well. I bought a S&W m&p sport II from them last week and got it for $699 + tax. It’s originally priced at $749 + tax but I’ve seen them as high as $850 via gunbroker. The other day I applied for their credit card and got $50 off my purchase, which basically amounted to 2 free boxes of 223 rem ammo.
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Old August 1, 2020, 10:32 PM   #9
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In the mid 70s, a friend of mine paid $450 for a S&W M29. At the time, the MSRP for that gun was $283.50. And you could get one at that price, from S&W, the wait time was only about 2 years!

For me, price gouging is when someone jacks up the price of essential products. Food, water, toilet paper, things like that. Gasoline, if you live in a rural area, seems essential, but if you live in a metro area and use mass transit, its not.

being able to buy a gun might be considered essential (and why don't you already have that covered???) but buying a certain specific make, model, and caliber isn't "essential", so its not really gouging, as noted, its capitalism.

You, or I may consider it over the top excessive, but it is a seller's market at the moment.
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Old August 1, 2020, 11:30 PM   #10
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Originally Posted by FITASC View Post
+1!
Dogtown is exactly right

...
+2 Dogtown
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Old August 2, 2020, 02:07 AM   #11
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Originally Posted by dogtown tom View Post
OP has never run a retail business.
Pricing your inventory based on what it cost you will lead you to going out of business. Successful retailers base their pricing on replacement cost.
Ex. Dealer cost is $500, MSRP is $617, he retails item for $525.
That's great as long as he can reorder at $500.

But what happens when he's selling at $525 and the manufacturer or distributor raises their price to $530? Poof! goes his profit.

So what does a store do when the distributor is out of stock? When the manufacturer can't supply distributors with the quantity the market demands?
You raise your retail price to what the market will bear. If that item will sell at $1200 it may be the last one he'll sell for many months. That may keep his doors open for another day.
I can understand this, but even during normal times my local FFL's are selling guns for $100 more than what I can get them for online and without a sales tax. That being the case every gun I've bought since 2015 has been off the internet. The only guns I would buy from an LGS are used revolvers if upon my inspection they are in good working order.
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Old August 2, 2020, 02:17 AM   #12
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Pricing your inventory based on what it cost you will lead you to going out of business. Successful retailers base their pricing on replacement cost.
Fair enough. But, let's say you as a retailer paid $500 for a handgun. Put in on display for $700. One week later this panic hits full bore. You check your supplier and see they are suddenly asking $1000 for same gun. You reprice yours to $1200.

Ok. You sell for $1200 and you're happy. You replace the stock for the $1000. Handgun doesn't sell. Panic buying ends. You check your supplier. Their price is back down to $500. You can't sell the gun you paid $1000 for $700. So your gun that you're trying to sell for $1200 sits there for 2 years. You finally lower price just to get rid of it and you eat the loss.

You lost money didn't you? If you're willing to take that chance, well, ok.
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Old August 2, 2020, 04:43 AM   #13
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Old August 2, 2020, 09:45 AM   #14
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Good grief it ain't price gouging....its called capitalism.
....actually, IMHO, it's both. I doubt in the case the OP gives that the wholesaler has doubled their prices($600) to the retailer. In the OPs scenario, it's clearly gouging and a retailer taking advantage of the climate and the availability of handguns right now. I have no problem with a dealer having to raise their price accordingly when their costs go up. I have no problem with a dealer raising prices because demand is clearing his shelves and he has no idea of when he might be able to replace them. But, during this and other previous panic shortages with guns/ammo/reloading components, there are many obvious examples of gouging. The OP's s clearly one of them. Manufacturers do not sell their products to distributors for over advertised MSRP.
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Old August 2, 2020, 10:31 AM   #15
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Seen a $1800.00 Custom Clock on Armslist . It had been coated poorly .
I also bought a new in the box Ruger Blackhawk The seller said he won it ?
I got it for $450.00 then i found it had problems (big Problems) Sent it to Ruger They sent me a new one And i had it back in a week . Still a good deal .
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Old August 2, 2020, 12:14 PM   #16
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It's price gouging but it ain't illegal. Just don't buy 'em right now. For those who must have a gun yesterday and can't afford to pay $400 for a Sigma or $700 for a Glock, spend $200 and get a Hi Point.
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Old August 2, 2020, 12:14 PM   #17
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.....there are many obvious examples of gouging.
No doubt. I'm looking for a case of Geco Match .22LR. It's good reliable plinking / training ammo. Normally sells for $299.00 a case of 5000. I found some at Lucky Gunner for $1025.00 a case. No one, I mean no one is going to be able to convince me that is Capitalism. It is 100% price gouging.
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Old August 2, 2020, 12:25 PM   #18
Onward Allusion
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being able to buy a gun might be considered essential (and why don't you already have that covered???)
That may be true for almost all of us here on this forum, however, it is definitely not the case with the general population in the cities and suburbs. I know so many business professionals living in their suburban enclaves who have no idea on how to even start the process of buying a gun (Illinois & its FOID sucks) much less shoot one.
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Old August 2, 2020, 01:39 PM   #19
ghbucky
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There is no such thing as price gouging.

A retailer that owns a product can charge whatever he pleases for his property.
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Old August 2, 2020, 02:19 PM   #20
dogtown tom
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Mike38
.....Ok. You sell for $1200 and you're happy. You replace the stock for the $1000. Handgun doesn't sell. Panic buying ends. You check your supplier. Their price is back down to $500. You can't sell the gun you paid $1000 for $700. So your gun that you're trying to sell for $1200 sits there for 2 years. You finally lower price just to get rid of it and you eat the loss.

You lost money didn't you? If you're willing to take that chance, well, ok.
That happens every day with many thousands of products.
It's unlikely a manufacturer or distributor has raised or lowered pricing anywhere remotely close to what you describe. They would get skewered by dealers and suffer. In twelve years of being a gun dealer I've yet to see a distributor raise pricing ......they don't need to. Distributors are getting the same amount of product on a consistent basis. Same with manufacturers. Gen3 Glocks still sell for the exact same distributor price today as they did in 2008.

But, supposing they did.
There are plenty of FFL's who would sit on that gun for two years, some for decades, hoping to recover their cost. A savvy businessman would be aware of price changes and sell at cost or below cost to free up cash that he can spend on something that will sell at a better profit.
For example: A dealer I know bought dozens of Mossberg 715 .22 rifles, Mossbergs pathetic attempt at a .22 AR15.......they didn't sell. His cost was $150 each I believe. Retailed at $199-$250 until people found out what a dog they were.

He wanted to sell them but obviously no dealer was going to buy them. He was advised to sell them at a loss, say $100 each and use the cash generated to buy inventory that would sell and sell at a profit.

He had 20 of those 715's remaining if I remember correctly......$3000 his cost.
If he sold them at $100 each........he generates $2000 in cash.
Uses that $2000 to buy sixty AR lowers at $33 each.
He then retails those lowers at $59 each......earning $3500+

That $1000 loss? It's now a profit and a valuable lesson. One that hundreds of sellers at gun shows and retail gun stores never learn. Inventory that sits doesn't make you $$$$.

Sadly, the dealer in that situation didn't take the advice to sell at a loss and buy AR lowers. He said "I understand the math, but I just can't lose money on these". Think about that. He was shown a simple solution that would get him out of his hole, but clung to the idiocy of "but, but, bit I'm losing $$$".
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Old August 2, 2020, 02:42 PM   #21
dogtown tom
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buck460XVR
Quote:
Quote:
Good grief it ain't price gouging....its called capitalism.
....actually, IMHO, it's both.
When YOU can't afford the price or are unwilling to pay its gouging.
Oddly, buyers don't go whining when a seller prices his product below market price. Its just as simple as "don't like the price, go buy somewhere else".


Quote:
I doubt in the case the OP gives that the wholesaler has doubled their prices($600) to the retailer. In the OPs scenario, it's clearly gouging and a retailer taking advantage of the climate and the availability of handguns right now. I have no problem with a dealer having to raise their price accordingly when their costs go up. I have no problem with a dealer raising prices because demand is clearing his shelves and he has no idea of when he might be able to replace them. But, during this and other previous panic shortages with guns/ammo/reloading components, there are many obvious examples of gouging. The OP's s clearly one of them. Manufacturers do not sell their products to distributors for over advertised MSRP.
Again, we have someone who has little experience with a retail business and never dealt with retail supply chains.
Whether the wholesale price has increased or not, DEMAND HAS.

Ever hear of the law of supply and demand?

That scarcity means the gun dealer isn't able to reorder as usual and may not get resupplied for months if not years. So he has a choice.....sell at his regular price or raise his prices to what the market will bear. You see this as gouging and unethical. That retailer sees it as a means to keeping his doors open. He'll go from selling twenty guns a day to selling none......because the distributors ARE OUT OF STOCK. It matters not one bit what price the distributor shows if none are in stock.

If you have a hundred guns in your display case do you sell them for 5% over cost? Understand 5% is the typical margin on new guns. You'll be sold out within a few days because of the demand. You'll be unable to reorder for months because distributors are out of stock.

OR

Do you increase your retail price to meet the market demand, knowing that once those one hundred are gone you won't be getting restocked for months, if that soon.

Everyone loves to bag on Cheaper Than Dirt, but they are still in business when hundreds of other gun stores failed. I despise them for other reasons but not for price gouging. No one forces you to buy from anyone. If you can find it cheaper somewhere else well then bucko.....GO BUY IT THERE!

Those being "taken advantage of" by high prices? Well maybe you should have paid attention to the state of the gun and ammunition market the last fifteen years.

2020 should not have surprised anyone.
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Old August 2, 2020, 03:16 PM   #22
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One way or another, some folks see themselves as (potential) victims,with the idea they have been "done to"
Others see themselves as choice makers,and they own their choices.

At times,none of the available choices are attractive,but there are still choices.

Timing plays a role. Some say "luck" is being prepared for opportunity.

There ARE wannabe middleman hoarder/gougers. The folks who buy out all inventory on the shelves,triple the price,and haul it to gunshows.

Opportunistic day traders. I won't buy from them,and I hope their inventory soon becomes available at their estate sale. I can take advantage of the widow.

I remember dirt bags,I don't give them business.

I cut my LGS some slack. There is a balance. There are only so many ways my LGS can have inventory on the shelf. One is higher prices.

In the short term,the gouger makes a few bucks. In the long term,I remember,and I decide where I spend.
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Old August 2, 2020, 06:28 PM   #23
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Originally Posted by Oldjarhead View Post
I think I will wait, until some sort of sanity and normalcy returns, to even think about buying another gun.
Why
There are plenty of great deal to be had if you look
The weekend before last i found a new in box P7M8 for $1550
And last week I found what appears to be an unfired vintage Ruger Model 44 DeerStalker for $500

On the other hand, never mind... there are no deals to be had
Stop looking, if I find anything Ill let you know
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Old August 3, 2020, 05:41 AM   #24
buck460XVR
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Originally Posted by dogtown tom View Post


Again, we have someone who has little experience with a retail business and never dealt with retail supply chains.
Whether the wholesale price has increased or not, DEMAND HAS.

Ever hear of the law of supply and demand?



Those being "taken advantage of" by high prices? Well maybe you should have paid attention to the state of the gun and ammunition market the last fifteen years.

2020 should not have surprised anyone.
Again, clearly we have someone who thinks thier word is Gospel, and altho they may be in retail. clearly are not the defining word in it, and may be oblivious to what goes on in the real world. Someone who is quick to belittle even tho their expertise is short.

Sorry Tom, but most all of us here learned about supply and demand/Capitalism in Freshman Civics. Most of us here HAVE been paying attention to the state of the gun and ammunition market the last 15 years. None of us are surprised, but most all of us can recognize price gouging when we see it.

Maybe you are just ignorant of the definition of price gouging.

Quote:
Price gouging may be charged when a supplier of essential goods or services sharply raises the prices asked in anticipation of or during a civil emergency or when it cancels or dishonors contracts in order to take advantage of an increase in prices related to such an emergency.
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Old August 3, 2020, 06:57 AM   #25
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^^^
If we're using the above definition, then what's been happening to guns & ammo is definitely price gouging. How many States have deemed Guns & Ammo as Essential Services??? LOL, even this permanently blue State of ILL declared gun stores as essential business!
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