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.

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About Nick Leghorn

Nick Leghorn is a gun nerd living and working in San Antonio, Texas. In his free time, he's a competition shooter (USPSA, 3-gun and NRA High Power), aspiring pilot, and enjoys mixing statistics and science with firearms. Now on sale: Getting Started with Firearms by yours truly!

74 Responses to Gun Dealer Discounts Disappearing. Rationing Begins

  1. avatarAdam says:

    Its going nuts at least on gunbroker. I used Buy it Now on GB to get my Sig 716 on Dec 15th for $1999. People are now bidding on 716′s $3k and up now like wtf.

  2. avatarThrawn says:

    TTAG, please stop posting fear-mongering articles. This is sensational. If anything, as a reputable blog for 2nd Amendment issues, you should be throwing your encouragement and support behind manufacturers to keep on keeping on. If anything, now is the best time for manufacturers to keep the supply as high as possible. They will profit, more and more Americans will become gun owners, current gun owners will be better equipped and armed, and the government will be forced to consider that the majority of Americans support the 2nd Amendment.

    We’ve got TIME. Don’t spend this time in self-pity. Infact, stand proud. Through great adversity we can come out stronger than ever, but defeatist attitudes THIS EARLY into the political game is exactly how “compromises” and concessions happen.

    We’ll deal with a ban IF and when we get to that point. I’m not going to walk around pretending we have AWB 2: Electric Mis-information Boogaloo.

    • avatarJoke & Dagger says:

      Thrawn: I suspect dollar signs are keeping the manufacturers motivated, not a post on TTAG. This is a fact based article and you command TTAG to stop. Seriously?

    • avatarRacerX says:

      Economics my friend, economics. Demand rises, supply contract, prices go up. Don’t fight the tape.

    • avatarAJD says:

      This blog entry was drawn from a reddit of an actual gun shop owner. We have time, you say. Time is great. But time is useless when no one has product.

      http://www.reddit.com/r/guns/comments/1568r4/firearm_industry_sitrep_122012_alternatively_you/

    • avatarSilver says:

      When it comes to the 2A in modern times, a defeatist is simply a realist.

      • avatarLance says:

        Disagree I think we can beat this. Must support our republican allies in the House.

        • avatarRybred says:

          you need to urge all representatives, NOT just repubs!
          not all repubs are for nor are all dems against.

      • avatarThrawn says:

        If you haven’t already let your representatives know how you feel, you are to blame. Not modern times. You have so much available to speak to your representatives, and if you have not done so yet, you are the failure.

        Let them know: No AWB 2.

    • avatarRobert M says:

      Thrawn,

      Re-read what he posted. He said they are running there lines no stop to produce as many as they can but with the treat of new laws coming down the pick they wont put money into expanding there lines. In other words right now they can produce 100 Guns an hour. They are doing that 24/7 but if they spent x dollars they could produce 200 Guns an hour. If there wasn’t the possibility of new laws they might spend X so they can better keep up with demand but wont put that money into new hardware unless they can be pretty certain they can make the money back so they don’t.

      Thanks
      Robert

  3. avatarimrambi says:

    Not only do you have firearm rationing, but also ammo. My LGS can only get 2 cases of .223 at a time. The other day he had a few cases and they sold out in one day.

    • avatarLogan P says:

      My LGS and Wally-World have been out of .223/5.56 and 7.62×39 for a week. The fleet supply store has 20rd boxes for $35+tx. Yikes.

    • avatarBLAMMO says:

      I’m pretty sure I have more ammo than most gun stores.

      • avatarready,fire,aim says:

        and I reload my own so as long as I pick up my brass I’m good to go….till I run out of my 50K + primers I have….look at the mice run thru the maze….LOL

    • avatarAnon in CT says:

      I really don’t get that. You’d think that with the winding down of operations in Iraq, the world would be awash with the stuff, sonsidering how much manufacturers ramped up production in the mid 2000s.

      • avatarBilly says:

        The fed gov is buying ammo like it’s going out of style. They see something coming and have ATK running night and day to fill DHS contracts.

        People in the know also see a war coming. It’s the only economic result of current debt levels world wide. In the next few years, something is going to break out between somebody, and someone else, just don’t know who yet. It’s not going to be some piddly peacekeeping or stabilizing operation either. If you are observant, you can smell it in the air. Just look at Europe, Japan, China, Russia and the ME. The world has gone insane.

  4. avatarjwm says:

    I learned my lesson well after the last panic. My safe is full of boomsticks already and my bins are full of ammo.

    The silver lining to this cloud is that ALL guns, not just EBR’s are selling. Not all of those guns are being bought by a few gun nuts. Judging by demand, we must be a country of people that the anti’s would class as gun nuts. Strength in numbers.

    • avatarSanchanim says:

      So if the world were to end tomorrow you are good to go! Ha least I know who to look up if we have to bug out or something.. :-)

  5. avatarPulatso says:

    If this is actully only one distributor eliminating discounts, it could backfire badly. We’ve shown to be the kind to walk away from a trusted name when they start playing games with prices. As long as dealers have options, this will self correct.

    And if I’m wrong…well, there’s guns on my “want” list but nothing on my “need” list. I can wait until prices simmer down or a bargain stumbles my way.

    • avatarAnon says:

      Dealers don’t *HAVE* options. They’re willing to get product anywhere, at any price, because the consumers are willing and screaming to take anything at any prices. Either you ride the storm, or you go out of business. Plain and simple. This is demand-driven economics at its finest.

  6. avatarSammy says:

    After Sandy If a gas station raised prices just .50 the government came down on them like the Israeli Air Force. But companies can quadruple their prices to our community and ……….(cricket’s sound)………. Nothing wrong with that, their shooters. We’re being treated like smokers. Need money raise sin taxes.

  7. avatartdiinva says:

    Funny how people claiming to be libertarians start screaming price gouging, just like our lefty friends, when increased demand drives up prices.

    Higher prices lead to a better allocation of resources. How many people who more than one AR/AK are out there buying more? How people who have 20 mags want 10 more? The marginal utility of each newly acquired piece of gear goes down. As the price goes up people decides that “well I have a lot of stuff” give way to those who have little and want some more. That’s how the free market provides a superior allocation of resources.

    • avatarMichael B. says:

      Which one of the commenters complaining have ever claimed to be a libertarian?

    • avatarDerek says:

      I’m not suggesting that they be brought up on charges but, just as they’re free to raise their prices %500, I’m free to never do business with them again.

  8. avatarJames R says:

    Great so much for trying to get a CZ-75. Damn I wish I had the money now!!

  9. avatarSteve Ramsey says:

    This is a good thing for multiple reasons.
    1. Firearms find good homes, many in the homes of NEW shooters.
    2. As the value of our guns escalates, any provision banning future transfers will receive even MORE heat.
    3. If the worst happens, manufacturers will be flush with cash for new gun development for the altered market.

    Get in the backorder line. Any possible legislation will take months.

    • avatarmatt says:

      3. If the worst happens, manufacturers will be flush with cash for new gun development for the altered market.

      Actually they wont, distributors and retailers will get all the extra money from price gouging.

  10. avatarPascal says:

    Sometimes gun owners are their own worst enemy.

    The panic buying makes zero sense. Legislation will take months to go through committee and stocks where already low because of the scare leading up to the election — an election of which many gun owners voted for Obama (are probably the same ones paying inflated prices).

    What kills me are the people who already have a dozen ARs who are out purchasing more.

    Not sure how this hysteria helps anyone

    • avatarAharon says:

      “What kills me are the people who already have a dozen ARs who are out purchasing more.”

      If they keep them in the box in prime condition they can sell them for a nice profit before the bans on the ‘scary black rifles’ and private sales become go into effect.

    • avatarMr Pierogie says:

      This is precisely the point of higher prices. People who don’t have an AR and want one will be willing to pay more. Those who already have one or more rifles will not see the value of spending more money on another rifle. The higher price would discourage them, leaving more stock to others. Those who want one will essentially bid against each other to determine the new market price.

      You see, if prices rose quicker, there would still be stock available because those who already own rifles would see no need, or no value, in buying additional rifles. But those of us who don’t have an AR, to us the value was high and we’d be willing to pay more RIGHT NOW to get one.

      • avatarKCK says:

        Degree in Econ.

        Absolutly correct

        I did just that, paid $150 premium from start looking (pre Sandyhook) to buying (Post Sandyhook)

  11. avatarAnon in CT says:

    I’m actually quite pleased with my decisions over the last 2 years. I decided to prioritize black scary nugs first and put off fun/historic stuff. Apparently that was a good choice.

  12. avatarMr. Pierogie says:

    Nick, why do you say they’re “screwing” the dealers by following the laws of supply and demand? The demand now is huge. I visited several LGS in the past week and browsed many a website only to see empty shelves and no online stock. I’m bidding on a lower receiver as we speak and I’m willing to pay double the regular price, or maybe more. After all, after Jan 3 that receiver could be illegal, so how much is it really worth to me and other bidders RIGHT NOW? I think it’s worth a lot. So if I want one NOW, I have to pay a higher price, I have to outbid others who are also willing to pay a lot for it. CTD and others do the exact same thing, they’re responding to market conditions. The supply is low, or perhaps even extremely low. When that low supply is met with unusually high demand, prices go up.

  13. avatarJB says:

    Went to my LGS today 15 mins before opening and I was in a crowd of 6 that grew to 15 then 20. I was the second one through the door and the first guy bought the LAST carbine. I “settled” for a Colt Match Rifle. No luck haggling when the guys in line behind you will pay more. No magazines to speak of either.

  14. avatarAharon says:

    I need to soon focus my attention and money elsewhere from guns, gun gear, and gun accessories and start buying other things of value for survival, prepping, and security. Let’s see; I have a great knife (perfect for knife fighting and food preparation) designed by legendary knife designer Ethan Becker that deserves a quality custom leather sheath…

  15. avatarHeisenberg says:

    I personally think that everyone needs to calm the hell down, on both sides. Going out and buying ALL the guns and ALL the ammo you can possibly get your hands on is NOT the solution, and does NOTHING to help the current situation we will be facing in Congress.

    We as gun owners spend a lot of our time portraying the image that we are not self-obsessed, paranoid people, who own firearms for legitimate purposes. Can someone please tell me how this helps? At all?

    • avatarmatt says:

      and does NOTHING to help the current situation we will be facing in Congress

      I think they’re doing that as a contingency for future situations. From the DoI
      But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security

      We as gun owners spend a lot of our time portraying the image that we are not self-obsessed, paranoid people…
      Speak for yourself. I take pride in my paranoia.

      • avatarHeisenberg says:

        “But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security”

        matt, I vote we collaborate and make one of those Syrian rebel tanks and drive it to the front porch of the White House. I’ll supply the Playstation controller.

        • avatarmatt says:

          do you want to spend some of the money you made off meth and send me a couple hundred square feet of AR500 for my Jeep Cherokee? (see Heisenberg in Breaking Bad in case you didnt get it)

    • avatarAharon says:

      Everyone needs to calm down on both sides. Fully agree. Extremists from both sides are calling the shots (no pun) for the majority of the population that is the moderate middle. It is almost becoming comical in observing the extremes except it isn’t funny. I really miss the America of my boyhood. Every day was a magical Huckleberry Finn type of adventure.

      • avatarmatt says:

        Did you travel with a runaway slave too?

      • avatarWLCE says:

        “I really miss the America of my boyhood. Every day was a magical Huckleberry Finn type of adventure.”

        i hear ya there. its tragic seeing the economic and social living hell our civilization is becoming.

    • avatarSilver says:

      I fail to see how recognizing the inevitable victory of evil in this country and preparing properly is paranoid.

    • avatarBilly says:

      Well for one, your vote doesn’t matter, it never really did, but especially now. Buying a gun is much more effective. Oversubscribing the NCIS system and buying the entire supply chain of ammo sends a much clearer and louder message to Washington than anything else you can do as a citizen. Second best thing, support GOA, JPFO, or if you really insist, the NRA.

      These congresscritters remember the tea party and the anger that welled up a couple years ago before the movement was subverted. This activity should give any rational power monger pause to implementing NDAA activity on the US populace. They have to know that if they start black bagging people like the CIA did in Europe to get “terrorists”, they’ll touch off a civil war. This unprecedented spike in firearms and ammunition sends a clear message “Don’t f#$# with us”. Buying ARs at 3 times the price is probably the best thing people can do. It’s a peaceful form of protest, and hopefully a way to prevent an escalation of government violence against citizens. If the message is loud enough, they may just back off.

  16. avatarSilver says:

    The sad part is the vast majority of people shelling out thousands upon thousands now to buy guns will turn them in at the first demand of confiscation from Washington.

    • avatarBilly says:

      Don’t think so. From what I hear from many people at the stores is that they’re going to go plant “extras” in a nice shady bit of dirt somewhere.

  17. avatarLance says:

    I understand people for Christmas and some for fear buying stuff but some of this too much. We should spend time fighting the banners in the media and congress spend time supporting the GOP House and Progun Senators who can kill this ban. I dont surrender like some scared buyers do we must FIGHT!!

  18. avatarB says:

    Reporting from the field: At 11:00AM on a Thursday morning there’s a line at my local gun shop two dozen deep waiting to by AR lowers at nearly 3 times the price they were selling for last Thursday. This is insane.

    • avatarSwarf says:

      And yet, there you stand.

      • avatarB says:

        I left, actually.

        • avatarAlphaGeek says:

          I highly recommend finding a couple of small-to-midsize dealers who sell online and are active on Facebook and/or Twitter, then following them for updates. This is a great way of finding out when they’re receiving stock and making it available for purchase.

          This past week I bought two very nice Kaiser lowers from Ten Percent Firearms and had them shipped to a local FFL. They’ve been great to work with, and they do post updates on stock status to Facebook.

    • avatarWLCE says:

      what is insane is people should have been buying this stuff when bush was in office and the concept of firearms ownership remained unmolested.

      they didnt, waited around, wallowed in their pathetic excuses, and decided that perhaps after connecticut with the creatures in office flirting with the idea of more gun restrictions that it would be a good time to buy a gun…them and thousands of other procrastinators.

      these people are just as bad as the unprepared new yorkers following the hurricane. my irritation is not the sellers or the manufacturers…its with those that made a decision not to be prepared.

  19. avatarSanchanim says:

    I would think that gun manufacturers would be spinning up at minimum lowers. Get them into the hands of the people. This way they can sell them parts forever…
    I wish there was a way to know how many AR or AK style rifles have been sold since November.. I think if people saw the number they would be shocked, and understand banning something that is already filling the gun safes of people across this country is like putting your finger in the dam while it is crumbling!

    • avatarAlphaGeek says:

      San, I guarantee that the guys with manufacturing FFLs have been begging, borrowing or stealing hours on every CNC mill they can legally use to crank out AR lowers. Prices are well past the point where they need to wait for forgings to make money on lowers — now that lowers are going for $225 and up at retail, the economics very likely support making them from solid bar stock.

      I wouldn’t be surprised if the various shops cranking out lowers were in competition for available supplies of 7075-T6 aluminum bar stock.

  20. avatarjwm says:

    Just got back from wally world in Milpitas. They still have ammo, including 7.62×39. Went to Target Masters in Milpitas and they still had ammo. But their gun cases, handguns at least, are looking pretty bare. They still had a good number of Shotguns.

  21. avatarAaronvan says:

    Went to LGS today not a single AR15 2 AR10s (no idea when they’re getting more) 10 boxes of federal 223 (I bought five) and 15 boxes of 223 TAP were all that remained in 556 or 223…. also 9mm stock was prob half what it is normally… no ar mags in any size… only had 3 mini 14 mags left (2 now)… no XD pistol mags either

  22. avatarJustice06RR says:

    Not only guns and ammo prices are going up, but also magazines. I went to a local manufacturer (Spikes Tactical) and they had standard Pmags for $35 (originally about $12 online). Insane price gouging.

    Also since they are one of the premium AR manufacturer’s, there was a line out the door like customers waiting in line on Black Friday. Their receivers are in low supply, and backorder is around 12months.

    Its good to be in the firearms business right now, but its bad for the consumer..

    • avatarAlphaGeek says:

      I’m amazed that they had PMAGs to sell at any price.

      To be fair, I paid $25 each for 30-round PMAGs this week, but that included labor to break them down into “rebuild kits” as well as capacity limiting inserts to make them CA-legal. That same package went up to $30 minutes after I ordered, and is out of stock altogether now.

    • avatarBilly says:

      It’s not price gouging, It’s economics. It’s also necessary to bring additional supply online and ration existing stocks. Read Russ Roberts “The price of Everything”. I think you’ll find it enlightening.

  23. avatarAlphaGeek says:

    I don’t understand why people are panic-buying ammo right now, especially 5.56. Did I miss some announcement that they were going to try to ban 5.56 ammo? Because that would be one of the dumbest fscking things I’ve ever heard, considering the huge stockpiles of 5.56 already in private ownership AND that whole reloading thing people have been doing since the frontier days.

    Sure, I get that folks picking up AR-series rifles for the first time might panic-buy some ammo too, but that doesn’t seem to come close to explaining the ammo shortages I’m hearing about.

    • avatarBilly says:

      It’s the fear of the unknown. The media has made a large stink about the Aurora incident claiming the idiot there had thousands of rounds of ammunition, making it a big deal. The fear is that there could be ammunition restrictions. This fear goes back to the government threats in the 90s when there were rumors and real talk about ammo restrictions. It’s not necessarily paranoid either. Many countries have restrictions on how much ammo you can buy and they require id for ammo purchases / record the transaction. The possibility of changes to unrestricted purchases of ammunition and off-the-record purchases of ammunition are real. We just don’t know what those creatures in Washington are going to do.

      Compounding all of this, the supply chain has already been tight anyway. This incident has probably blown 6 months of supply chain inventory. If you want to get more ammo at these prices for the foreseeable future, you better have it now, or you’ll be waiting a while

  24. avatarjimmyjames says:

    2 LGS’s on Monday had over 300 AR’s between them. Not sure today. Told all my shooting buddies months ago to get an AR if they ever wanted one now they are calling me asking me where they can buy one. Dope! Went thru all this B4 and learned a lesson. The panic and hysteria will die down eventually. Market is supply and demand. A few months ago 9mm was selling for 20 years ago prices. Has nothing to do with raw material costs.

  25. avatarBilly says:

    It’s not “screw you”, it’s economics. The gun industry is probably the least corrupt industry left in the US. People who are asking higher prices are just responding to natural market pressure and scarcity. Prices must rise in order to create an incentive to ration current inventory, and to produce more inventory. Are you selling your magazines for 14.99 to anyone who asks? Didn’t think so. I’m not selling mine at all, but I don’t begrudge those that raise prices in this environment. This is economics, and it’s healthy.

    Read Russ Roberts “The price of everything”.

    • avatarCaligula says:

      As soon as the panic buying stops the panic selling will also cease, correctly stated. Prices are a response to decreasing or increasing demand on any commodity. High prices will help curb demand. Once demand slows, prices will stabilize. It’s better than what we have here in N.C. Gun dealers will only sell one box of range ammo in most hand gun calibers. Prices are relatively low, but we have self-imposed rationing. You would think that the politicians would figure out that the citizens of this nation are voting with their wallets regarding the popularity of more worthless, liberty killing gun control laws.

  26. avatarPaul Bonneau says:

    Some people, including many who should know better, still don’t understand and support the free market. Trust me, the alternative is worse.

  27. avatardon holmes says:

    In Iraq, it took 250,000 rounds per kill. When I did a lot of duck hunting I shot a break open 12 ga single barrel,my hunting buddies mostly used semi-autos with 3 rounds.2+1. At the end of the day,I had as many ducks and used far less ammo. It seemed that they had to shoot bam,bam,bam, at every duck. What I am saying is if you can’t get a black stamped piece of metal,don’t worry, use your trusty bolt action with a scope for out doors and that little 30-30 lever indoors. Just like hunting , one shot one kill. If you are looking to buy a rifle, the bolt or lever is available in almost all calibers and on store shelves under $400.00 What ever DON’T go unarmed .

  28. avatarCaligula says:

    I’ll never buy anything from Cheaper than Dirt again. They sucked before the latest guns and ammo panic and they will suck after. They lure you in with low posted prices and then rip you off with multiple freight charges from multiple warehouses.

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