Gun Dealer Discounts Disappearing. Rationing Begins

We’ve already seen some blatant, public-facing price increases on things like Magpul magazines. The “Now We Sell Firearms Now We Don’t Now We Do” folks at CheaperThanDirt raised their prices from around $15 to $60 per magazine. According to our industry sources, considering the simple law of supply and demand, firearms and magazine prices will remain sky high for the foreseeable future. Distributors for brands such as Glock, Ruger, S&W and Magpul have begun eliminating ALL dealer discounts. They’ve also begun rationing entire brands of firearms and accessories, in some cases raising prices as much as 60 percent . . .

Dealers don’t pay market prices. If they did there would be no profit for them and no reason to stay in business. Dealer pricing has historically been done based on the quantity of firearms a gun store buys. And depending on how well a retailer moves product, the distributors will cut them a better rate.

According to one source in the industry, at least one distributor is completely removing that process from their pricing of firearms and accessories. From the email that the distributor’s customers received on Wednesday:

We have removed all pricing discounts from items in select categories. This will allow for all high-demand products to hit the marketplace at the same price.

Which is doublespeak for “screw you, we’re charging what the market will bear no matter how much you sell.” Higher prices for dealers means higher prices for consumers, with items like Colt firearms seeing the market price going up as much as 60 percent due to the removal of dealer pricing. And that’s before they tack on any additional pricing element.

What makes it even harder for gun stores to get firearms and magazines in stock: in some cases, entire brands of firearms have been “allocated.” Translation: they’re being rationed out to the various gun dealers. This used to be done only with extremely high-demand firearms, but it now appears to be happening to entire brands. According to my source:

Set the time machine to a week ago. Allocated item – S&W Shield. Allocated item – Ruger SR1911. Allocated item – 10/22 Takedown. Allocated item – Springfield TRP.

This week? Allocated brand – Glock. Allocated brand – Magpul. Allocated brand – S&W.

This means that gun stores can’t re-stock. And since they can’t re-stock, the prices for existing items in inventory go sky-high. The reason for the rationing isn’t necessarily that distributors are looking to hike the prices. It’s more likely they’re simply out of stock. Period.

Firearm makers in this country have been going 24/7 to keep up with demand ahead of Obama’s re-election. Rifles that might be banned under a renewed AWB were already in short supply following a massive buying spree that happened around election day. Those rifles had only just started re-appearing in distributors’ stocks when the shooting in Connecticut took place.

Now, after Dianne Feinstein outlined her bill, the entire supply chain is barren. The usual cushion of rifles that adorn distributor’s warehouses are gone and they’re shipping guns out as soon as they come in the door. Thanks to the potential of a new Assault Weapons Ban, manufacturers are going to be very hesitant to increase their production capabilities to meet demand for products that may be made illegal in the short to medium term.

That’s bad news for consumers looking to buy a new gun in the coming month or two. The shortages won’t end anytime soon. Current events will only push prices up higher as whatever is left in the pipeline dries up. It’s going to get a lot worse before it gets better. And the only thing that will improve the situation is when all of the looming threats to the gun industry are resolved. One way or another.