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

[Double Naught Spy]

Not exactly. Sellers set prices. The question is whether they adjust prices to what the market will bear or not. Overpriced items, as compared to what the normal market will bear, do not well well, but some sellers are comfortable with not selling a lot or are not willing to sell until the price that they set is met by a buyer.

If buyers set prices, I would be getting all my stuff for free.

 

[Brian Pfleuger]

Sellers set ASKING prices.

The selling price is set by the buyer.

You can't get free stuff because sellers won't buy it in the first place if they are forced by the buyer to give it away.

On an individual level, the price has to be agreed by both parties. On scale, the average/typical/market price is controlled by the buyers.

 

[Skans]

Actually, the final strike price is set by the buyer and seller completing a transaction. Neither, individually, set a strike price. This is fundamental supply and demand from economics 101.

 

[L_Killkenny]

I'm not one to deprive someone from making extra $$ (even lot's of extra $$) and in no way believe that someone raising their ammo/gun prices in anyway for any reason amounts gouging. It just ain't so. But I do have a problem with retailers buying out stock from other retailers. What it comes right down to is the are instilling a de facto local monopoly and removing competition. The only way they can get the $$$ they are getting is to do this and they dang well know and intentionally do this. Not illegal, shouldn't be illegal but I personally won't do any business with retailers doing this.

 

[Double Naught Spy]

Sellers set ASKING prices.

The selling price is set by the buyer.

You can't get free stuff because sellers won't buy it in the first place if they are forced by the buyer to give it away.

That is an interesting concept. So nobody is gouging. The buyers are demanding to pay more money? The problem is that the buyers are forcing sellers to increase prices? No. Sellers set the price, that is why I can't get free stuff. No, sellers would not be in business if buyers could set the price and make them give stuff away for free, LOL, but that would happen if buyers set prices.

We are, after all, talking about individual sellers who are gouging and so too then we are talking about individual buyers who are paying the gouged prices.

 

[Skans]

So nobody is gouging.

That's correct. Nobody is gouging anyone. Gun stuff is in very high demand. People who want mags, AR's, AK's, or whatever want what they want and will pay high prices for it. Sellers sell the stuff for as much as they can get, that's all. We're not even talking about food or gasoline, just guns and bullets.

Now, if someone hoarded up all of the corn supply in a particular area and set prices so high (relative to what they paid, like 1000%) that people are starving because of it, then maybe you can accuse the seller of price gouging.

No, what we have here are just buyers who should have known what was coming with this current administration, refused to prepare, and now they are having to pay prices maybe up to twice as much as about 1 year ago. I have no sympathy for them, none at all. Be glad with what you have; or pony up the money to buy what you failed to buy; or take the risk that you wont' ever be able to get it (or pay 10x for it) and wait to see if prices fall. You have comp

 

[Brian Pfleuger]

That is an interesting concept. So nobody is gouging. The buyers are demanding to pay more money? The problem is that the buyers are forcing sellers to increase prices? No. Sellers set the price, that is why I can't get free stuff. No, sellers would not be in business if buyers could set the price and make them give stuff away for free, LOL, but that would happen if buyers set prices.

We are, after all, talking about individual sellers who are gouging and so too then we are talking about individual buyers who are paying the gouged prices.

No.

The seller sets an asking price:

Seller: I will sell you this magazine for $5.

Buyer, OK.

Seller (to self): Hm, maybe $10 would work?

Next buyer: OK, I'll pay $10

Seller #2 (to self): #1 is getting $10, I bet I can get $15

Buyer: Hm, #1 has them for $10, #2 has them for $15... Hey #1, I'd like one, thank you.

#2 (to self): Darn, no one will pay $15. I'll charge $9.

Buyer: OOH! $9! Yes! I'll buy those!

Seller #1 is still at $10. That's his ASKING price. He can't sell them anymore... the buyer has set the price lower. The seller has two choices. Lower his asking price or not sell.


Who set the selling price? The buyer.

The buyer controls EVERYTHING. The seller wouldn't be able to stay in business without the buyer.
If the seller has to spend $5 to produce the widget that the buyer will only pay $4.50 to buy, will the seller be in business?
No.

If the seller can produce the widget for $5 and the buyer(s) will pay $1,000, guess what happens?
More sellers!

What ELSE happens? The new sellers ASK FOR LESS! If the SELLERS set the SELLING price, what would happen?
The original seller would still be getting $1,000 while everybody else gets $900. Why would the first seller lower his price if he was in control? Why would the new sellers sell for less if THEY were in control? The new sellers can't control the buyers and they want their business, so they entice them by OFFERING a lower price.

But the seller DOESN'T set the SELLING price. He ASKS for a certain amount but the BUYER sets the SELLING price. If the buyer won't buy, there is no SALE. The seller has NO control.

New sellers want a part of the market, so they appeal to the buyer by OFFERING the same item for less money. Do they WANT to sell it for less money? NO! They only do it because SELLING it for less is BETTER than NOT SELLING it for more!

The BUYER is in control.

 

[BigD_in_FL]

That is an interesting concept. So nobody is gouging.

Correct, you are finally getting it

 

[PatientWolf]

I think it is a matter of level. I think in normal times, the gun shops I like best provide great service and offer slight discounts from retail list. During a shortage, some still offer a slight discount, but I can certainly understand them asking full retail price and wouldn't consider that gouging. If they are to the point where they cannot get enough merchandise to maintain their business or are dealing in collectables, they may even charge a slight premium.

I think where it become unethical is when they try to truly take advantage of a scare and try to charge more than 20% over list. I don't support these shops with my business.

 

[Dr Big Bird PhD]

My problem was that I am 22, poor, and had just gone out on my own after college. I didn't have the cash reserves to *really* prepare for such a situation.

However I DID stretch my wallet in August/September to buy a $1200 firearm that is most likely worth $2k now. While I only have 500 rounds to speak for, I did do the smart thing and planned ahead with the cash reserves I had in advance.

Like I said earlier in this thread: People who claim that the market is "unethical" and we are being "gouged" right now are just one or two steps away from claiming that the market is "flawed" and we need more government oversight.

You are functionally no different from price controllers and subsidizers. While disliking "gouging" and advocating for "price control" are not the same thing, the inspiration for both stems from the same emotional response to basic economics. It is a disbelieve in the pure concept of liberty and freedom.

If you do not like the price, do NOT buy the product. Do NOT support the price. When a large portion of individuals mimic what you are doing and DO NOT purchase at those prices, you are going to force the suppliers to adjust to the market.

WHY IS THIS SUCH A DIFFICULT CONCEPT TO GRASP.

 

[BigD_in_FL]

However I DID stretch my wallet in August/September to buy a $1200 firearm that is most likely worth $2k now.

Sell, take the profit and buy Exxon

 

[ohen cepel]

No, it isn't.

All things vary in price at times. Many shops also get stuck holding inventory for long periods when it's not in style. Never saw a line of people offering to buy the unwanted inventory which the shop was stuck with at a fair price.

 

[PatientWolf]

Remember part of what is allowing the prices to be at the level they are at is the fact the often, people who would not be in the market for these items are scared and rushing out to add to the demand. It exacerbates the situation drastically.

That being said, I still believe that approximately SRP is a reasonable upper end for pricing. These prices are based around historically reasonably upper level mark-ups for mfr, distributor and retailer. Do I expect to see discounts when times are slow? Yes. But the discounts have gone away for the most part due to the current demand. That doesn't mean I believe a surcharge is reasonable.

 

[Brian Pfleuger]

I think where it become unethical is when they try to truly take advantage of a scare and try to charge more than 20% over list. I don't support these shops with my business.

How is that "unethical"?

What is so special about "list"?

"List" is an invention of the manufacturer, based on their assumption of what the buyer will pay as a max price. It's not like there's a Price Bible that dictates directly from The Great Beyond that Thou Shalt Not Charge More Than $50 For An AK Magazine.

Some products sell for far over MSRP, "List" price, every day.

Some products don't even HAVE a "List".


We all need to watch this video again:
http://www.youtube.com/watch?v=h9QEkw6_O6w

 

[PatientWolf]

"List" is just where I draw my line in the sand. Likewise the level I describe as where I think it becomes unethical.

I know manufacturers spend a lot of effort to determine what the maximum price a reasonable person will pay for an item is, taking into account their costs and expected mark-ups at each level of sale.

It's true that some manufacturers sell above list every day, but not to me. I knw they can and do get the prices they ask, but at the price of alienating their customers. Some companies have built successful businesses on this model, but I try to avoid those companies.

The companies I prefer to deal with may occasionally charge higher than list, but if they do, they will bring some other, maybe less tangible, value to the transaction.

 

[wayneinFL]

MSRP is something the manufacturer made up to make his product to support a high retail price. It's pretty much arbitrary. It's really just a gimmick for sales promotion.

The real price that a seller should get is whatever buyers are willing to pay.

The more people are demanding a product, the higher the price will be. Higher price means more people are willing to supply the product.

My AR lowers would have sat in the closet for years at "MSRP". When the price doubled or tripled on them, I was willing to supply them to the market. Your communist philosophy says that I should have only priced them at an arbitrary number set by someone in an office somewhere. Or less. So they would have stayed in the closet.

This is why there were bread lines in the Soviet Union. This is why there is an empty ammo counter at Wal-mart.

 

[nazshooter]

Wayne:
Well put. Locally the Walmart and other big box stores haven't increased prices much, if at all. As a result every new shipment of ammo is quickly bought up and much of it is then resold in the smaller shops or on Backpage etc at the real market price. If they had just raised the prices there would be ammo on the shelves past 8am and maybe they could even afford to offer ammo makers more money to increase production further.

Sent from my ADR6425LVW using Tapatalk 2

 

[OcelotZ3]

The store is in business to make money. Because of the shortage, they don't have much to sell and often have no idea when new stock might be coming in. If they price items at "normal" prices, they sell out for less than they could get and now they have nothing to sell.

If they raise prices, then that makes up for the loss of stock. But if they raise them too much people stop buying at all and then the prices will eventually fall.

Since the items that they are raising the prices on aren't life support related like water, batteries, etc. that might go up when preparing for a hurricane, I have no problem with it.

 

[STW]

Look at an auction to see how the market sets the price. When this all blew up I had a nephew that put a 3-pack of 30 round magazines on Gunbroker with a start price of $0.01. He sat back and watched it sell for around $240. That worked so well he sold another 3-pack but saner heads prevailed and he only got $150 for that one. He then bought a plane ticket and went to his sister's wedding. He forced no one to bid, no one to buy.