Is it "unethical" for a gun shop to raise prices during a shortage?

[cwhit23]

Vanya-

You create a good point about it being a necessity and I agree. I think I'm just looking at it from a different perspective and you even said it.

gas prices rise over speculation.

gun and ammo prices rise over speculation..

There is a direct correlation. However you are correct about people having to have gas to get to work etc. where a gun is not needed to get to work etc. I still don't feel it's right for gun shops to "stick it to" new gun buyers or internet customers because they can make an extra 25% or whatever right now. Those could become life long customers that would come back after this paranoia dissipates. When this does end and a first time buyer realizes he got hosed for $100-$200 more than they should've they probably will find another shop to go to and never say a good word about the previous shop. Just my point of view.

 

[dstryr]

Ask yourself this about owning guns and buying ammo: If it wasn't important to you 3 months ago, why is it important now? The shops raising prices are in it so they can retire, not so you can retire and again, it is a free market decision on the buyer's part to part with his/her $$$, or not.

 

[chfields]

This is a free market society, that means we are free to buy or not buy from whomever we choose. If the price is too high, you don't buy it. Guns and ammo are not necessities and are subject to the laws of supply and demand. How much you charge someone for your product is directly related to what someone will pay for your product. If people are willing to pay $1600 for an $800 gun, you sell it for $1600. When people stop paying, the prices will go back down.

 

[Evan Thomas]

When this does end and a first time buyer realizes he got hosed for $100-$200 more than they should've they probably will find another shop to go to and never say a good word about the previous shop. Just my point of view.

You're right that this is a possible consequence of a seller's raising prices in response to increased demand, but the fact that it may not be in the best long-term interest of the merchant doesn't make it "wrong." It may be foolish or short-sighted, but there's no ethical requirement for people to act in their own best interest.

As to "speculation," let's not confuse two different usages of the word. In the example of gas prices, I was using its more restricted meaning of "financial speculation" -- buying up a commodity (or a stock, for that matter) in the belief that prices will rise. This is why gas prices go up whenever there's a good economic forecast; speculators in oil futures are betting that an increase in economic activity will lead to a rising demand for oil, and thus to a rise in the price per barrel.

There may be people who are buying guns at inflated prices, thinking that they'll make money selling them in the event of a ban, but I don't think that applies to most of those who are rushing to buy guns.

I think the "speculation" you're referring to in the case of guns is simply the fear that there will be a ban... the rush to buy guns is driven by that fear, not by the desire to make money.

 

[lamarw]

I have long ago come to a realization. It is no longer a local market, State market or even a National market. It has become an international market for all of our commodities and goods. Services might follow, but it could be ruled as slavery.

I can shop from home with certain considerations such as cost of shipping offset by local taxes, hazmat fees, FFL fees and etc. Then not to mention my cost of gas for the hot rod lincoln to pull out of the driveway.

It does not take much intelligence to satisfy your wants or needs as long as you have the money.

I can then use my fuel money on one of my three boats since I live on a 44,000 acre lake.

Life is good. Carry a double barrel coach gun for personal protection. It is endorsed by the White House.

 

[wayneinFL]

This is not a result of supply and demand, it is a result of greed. Some stores gouged so much that the manufacturer thinks they can get more, which means the distributors will charge more, which means every LGS will have to charge more to cover their costs.

But people are willing to pay those prices. If they weren't willing to pay, you wouldn't see shelves emptying out. That is demand, plain and simple.

 

[Strafer Gott]

The owner of my LGS is wise enough to know you can shear a sheep many times, but you can only slaughter it once. Even so, my LGS is an institution, and I'd prefer they stay open. After the black stuff is gone, they still have a ton of classical guns that I desire. And they are ready to deal!

 

[Gaerek]

One store I frequent is having trouble getting guns from their dealers. They have inflated prices 15-20% to compensate for the lack of cashflow...and guns they get are usually sold in less than 24 hours after they're displayed, even with the inflated prices. The other store I frequent has no trouble getting guns from their dealers. As such they haven't really increased gun prices. As for ammo, the first store I mentioned have kept their prices the same (well, I think most stuff got increased by about $1 a box...small premium to pay if you ask me), but have instituted a three boxes per caliber, per customer, per day policy. The second store doesn't have a limit, but but they've increased ammo prices by 30-40%. Since a box of 9mm isn't worth nearly $20 to me right now, I choose not to give them business.

A business increasing prices is not an ethical thing, especially when you have options. They are having some of the same troubles we are in getting supply, and having increased pricing. They have to stay in business too. If the increased prices are worth it to you, go for it. If not, no one is forcing you to buy anything.

 

[huntinaz]

"Is it unethical to follow the principles of basic economics and instead ignore the supply and demand curve?"

 

[Technosavant]

I find it interesting that people keep blaming the shops as though they're the only ones involved in this.

There's no shortage of people out there who, if given the option, will purchase armloads of rifles, magazines, and ammo at "normal" prices and then turn around to sell those at much higher prices to those who cannot find such things in stock but have a felt need to purchase them.

If that rifle, magazine, or ammo is going to be sold to the end user at a 50-100% premium over pre-panic prices, what's the difference if it's done by the shop or by some "unethical"* buyer?

Some people complain if the prices are raised, causing the buyer to reevaluate just how badly he or she "needs" the item. Some will also complain if limits are imposed on how many may be purchased at one time in order to allow as many people as possible to obtain the item ("Who is that guy to ration this stuff?").

I would contend that it is far from unethical for people to sell items at higher prices when demand has gone insane... it causes buyers to self-limit themselves at purchase time. Where they might have otherwise purchased many items, they cut back to what they see as actual necessity, allowing more to be available for others.

Moreover, it can also be that some people now selling things can finally get enough money for the items for it to be "worth" selling them... while they might have wanted to sell a firearm, the prices being offered were not high enough- $800 for a given firearm might have led to a "forget it, I'll keep it" attitude, but at $1300 the person might think "OK, now I'll move it out." In this way the supply can actually INCREASE due to high demand and high prices.


*(I use "unethical" in quotes there to not pass judgment, but to use the term as the OP did... referring to someone taking profit in a market gone crazy with demand, which is not necessarily unethical in an economic sense.)

 

[MLeake]

Compared to what scalpers do to concert ticket prices, most gun stores are not so bad.

 

[BigD_in_FL]

I still don't feel it's right for gun shops to "stick it to" new gun buyers or internet customers because they can make an extra 25% or whatever right now.

He isn't "sticking it" or anything else to anyone. What good does it for the owner if he sells at below market price and then doesn't have enough money to reorder new inventory? He is then out of business. NO ONE is forcing you or anyone else to buy from him. He should sell it below market price because someone didn't do their due diligence and plan accordingly? Or sell it below market so someone can buy them, put them on GB and make a killing and then brag about it on here?

Read the story about The Little Red Hen - the parallel is there.

Never ceases to amaze me how so many folks have no idea how retail works. Most do not realize how many locales raised a LOT of tax rates effective January 1, including a new Federal payroll tax to fund Obamacare. The owner has to recoup those costs as well as increased costs from the makers, who have always had a price increase about this time of year - even when there was no panic - anywhere from 5-10%.....Time to take a look at ALL of the factors behind price increases - and if you are underfunded or refuse to pay the market rate - then wait and hope the prices come down or that that particular gun will still be available.

 

[adamc]

Ask the "oil field owners" of the middle-east
I remember the 1970's were a nest of thieves ( and still are)

if this post offends... please remove

 

[Evan Thomas]

Most do not realize how many locales raised a LOT of tax rates effective January 1, including a new Federal payroll tax to fund Obamacare.

The "increase" in the payroll tax wasn't a "new" tax; it wasn't actually an increase, either, but rather reflected the expiration of a temporary reduction in the payroll tax that was enacted at the end of 2010, as a way to help middle- and lower-class workers in hard times.

See this article from Forbes.

 

[Brian Pfleuger]

This video was posted in another recent thread on gouging.

Watch it. If you still complain about "gouging" after seeing this video, I don't know what else to say.

 

[BlueTrain]

Most of what most have said here is true, mostly. However, it is still true that there is no "free" in a free market. Someone pays something. The last things that will happen is rationing and price controls for guns and ammunition. Which reminds me: what happened with such things during WW II?

It's hard to imagine but there were times when demand plummeted. Skeeter Skelton said that during the depression, stores would sell ammunition by the round but cause folks probably couldn't manage the price of a whole box. Ah, yes. The good old days.

I still believing in patronizing the local gun shop but frankly, it's a little harder when there are more than one to pick from. But I'm not such a good customer anymore since I've pretty much given up all things gun. Money shortage, you know.

 

[Tom Servo]

Compared to what scalpers do to concert ticket prices, most gun stores are not so bad.

Actually, we've taken to calling a certain segment of buyers scalpers. These are the guys who come by first thing in the morning looking for "black rifles" and magazines. They don't care about brand or specs. They just want the item. Usually, they'll be on their cell phone discussing pricing with someone on the other end.

It's a fair guess they're being purchased for resale at the gun shows at markups that make the most shrewd retailer look altruistic.

 

[TheNatureBoy]

Add me to the growing list of those who don't like to see price increases. If an item costs too much I don't purchase it. Simple as that. At this point there isn't a firearm or any related item that I need. Having said that I don't have a problem with someone trying to make a profit. Is there a little bit of greed involved? Absolutely! Unethical? Without question.

 

[Gaerek]

Is there a little bit of greed involved? Absolutely! Unethical? Without question.

Put yourself in the shop owners shoes. They have higher taxes, and Obamacare to worry about now that they didn't last year. They have limited supply coming to them. In order to stay in business and keep the cash flowing, they have to raise prices. Keep in mind, if they kept their prices low, what do you think would happen? People would go in first thing in the morning and buy a bunch of guns, then sell them at, or above market value on Gunbroker. People immediately think things like this have to do with greed. I'm sure there's some of that going on, but economics is far more complicated than that.

 

[TheNatureBoy]

Gaerek, my post isn't a protest against price increases. Although I don't like them I support a business owners right to "strike while the iron is hot". If I were a business owner I'm sure I would do the same to some degree. My argument (if you want to call it that) is we as customers have the final say. If an item costs more than we want to pay we don't have to purchase it. It is unfair to call all gun shop owners greedy because I'm sure some are barely scratching by. On the other hand some (we know who they are) should be called out for what they are; greedy.