Sandy Hook and the Economics of Mass Murder

As TTAG’s resident FFL/industry contributor, I’ve been asked to write a one-year-later story about the tragedy at Sandy Hook as a segment of multi-part articles about the gun industry. Reader discretion is advised. This is an ugly business. Many gun dealers are hesitant to discuss the ugly truth, but I get to blog anonymously and share insights that many of you have come to enjoy. Let me be clear about something up front – this piece is an op-ed and is bound to shock and offend many of you. So if you’ve got the stomach for it, read on . . .

Rolling into the season in 2012 (the gun industry has seasons, hunting season/Christmas namely) the industry had several factors to contend with that I have discussed in the past. Q4 is where we make our money and pay the bills. Many dealers myself included typically post double/triple/quadruple sales volumes from summertime. We run out of stuff because our vendors run out and there is nothing to ameliorate the issue. Too many gun owners chasing too little product is something that happens with anything popular in season, and new, hard-to-find items. Retailers order heavy for the season which depletes inventory at the wholesalers, and the supply chain tightens up as it does every year. Every December I run out of Gen 4 Glock 19′s no matter how many I order. It’s just a way of life.

The big factor in 2012 was that Barack Obama was up for re-election. If anyone remembers what happened in 2008, you should recall a massive gun run that was, until then, unprecedented in nature. A smaller level of panic buying also happened during the John Kerry/GWB election – people were treating the potential of a Kerry administration the same way as they were Obama first and second terms.

One joke I love to tell people is that if they went to the Olive Garden and they ran out of pasta, people would laugh and never return because what kind of Italian restaurant runs out of pasta? That can’t happen! Guess what? In the firearm industry, it can happen, it does happen and it will happen every year. Especially during election years because of one glaring fact: dealers have already stocked up due to election paranoia.

What this means: the wholesale channel is not as stocked as it typically is. This is going to put a crunch on hard-to-find items in both the present and the future. Should there be a post-election rush, the retail channel will clear out and Christmas shoppers won’t have much selection.

Hunting season also takes a lot of specialty items off the hands of vendors, Mossy Oak rifles and shotguns, etc., so the same thing applies to that merchandise. A camo Remington 870 can be just as hard to find as a Glock 19 when the season is in full swing and everyone who got their yearly bonus is out shopping. Never underestimate the buying power of the crowd of gun owners who think guns are only for hunting. They spend just as much, if not more, than some of the high speed low drag aficionados.

For the 2012 election, I made quite the parlay. I made a slap bet, a dinner bet and a 300 electoral vote over/under with friends in favor of our lord and savior, Barack Obama. This was not a political statement so much as a realization that Mitt Romney was not going to win and the fact that I really wanted a dinner at Morton’s paid for by someone else, and the chance to give my good friend Joey P. a slappy new year.

Governor Romney sold out Massachusetts gun owners and he became an NRA member when convenient. It’s my opinion that if he’d made it to the White House and a deal were posed to pass an initiative that he supported that involved the total and complete sell-out of gun owners, it would be a done deal. My opinion is based on his voting record and comments on the subject, not an attempt to be a fear-mongering gun dealer shouting that people should buy whatever I have in stock before it gets banned.

Sidenote: I truly believe that kind of salesmanship is dirty pool. If someone comes in and wants to buy something they think will be banned, it’s the job of the dealer to take their money and run, not to engage in similar histrionics. Besides, I can’t compete with the NRA in the generating-complete-and-utter hysteria-out-of-nothing department.

Product-wise, anything AR15-related was very tough to buy wholesale going into the 2012 election season, particularly ammo, stripped lowers and uppers. My sales theory for 2012 encompassed the following:

Obama victory: People are going to clear the shelves. Oh no! Obama is back! Lets buy guns! Dealers WILL raise prices in light of new demand.

Romney victory: People are going to clear the shelves. Hell yes! Obama is gone! Lets buy guns! Dealers may raise prices in light of new demand.

If you know your history, this is nearly a word-for-word redux of 2008′s election. When I opened my door in 2010, I had people wanting to trade stuff in they bought the day after Obama won “just in case” and they overpaid big time. Should someone wish to be part of this thundering herd, buying guns at high prices, it’s a free country and I’m going to take the money and run. Bearing in mind that ANY gun owner who actively fears a legislative shift should already have one or two items that would be grandfathered under such legislation.

I stated quite firmly to all my customers that should demand ramp up going into and after the election, I WILL raise prices as will others if demand warranted. Partly due to the election, partly because every year I have people that fail to plan ahead. For the record: planning ahead pays off. Several of my regular customers did all their shopping for the season on Black Friday/first week of December. I love them. They know what they want, they’re low stress and they won’t be the kind of people who inevitably call me asking for a KSG or a Larue OBR three days before the 25th with overnight delivery.

Now, I can deal with stupid. I can deal with unrealistic. I don’t deal well with both. If you are stupid enough to call me wanting, for instance, a S&W Shield 9mm a week before Christmas (this was THE hard to find gun in December of ’12 that I consistently got $700 for), I’m going to find it somewhere in the USA, buy it for the least I can and sell it to you for $875+ tax. That’s the business we are in.

So, what happened after the 2012 re-election of Barack Obama?

Five things that I discussed above happened with a startling intensity and speed that shocked me.

  1. Wholesale supply channels emptied out overnight.
  2. Demand vastly exceeded supply.
  3. As a result, prices rose across the board from wholesalers to retailers as discounting was no longer needed to sell product.
  4. People were being stupid, yet again.
  5. Product become more difficult to find.

My email inbox on election night blew up. I mean it got stupid in a hurry. I had a bunch of AR15′s in stock that I’d put up in ads with promo pricing on the week prior to the election. Everyone asked me for quotes + shipping and they did not buy. I stock Colt 6920′s consistently and the morning of Decision Day 2012, one of my primary vendors had 500 units in stock. As the day wore on and Nate Silver worked his magic, there were 300 units in stock. By the time CNN called the race for Obama, they were sold out.

Think about that. Over 500 Colt 6920′s, gone in one day. That’s one model rifle.

The following morning, I had 30 emails from people wanting this rifle that vendors had sold out the day before. I told them I intelligently hedged my bets and had 10 on the way in from an order the previous week and UPS had them in transit. They said, great! I’ll take one if you can honor the old price!

No.

If I can order it and it is readily available, my markup is X.

If I cannot order it (demand clears the shelves) and it is NOT readily available and I have it and everyone else does not, my markup is substantially more than X.

These people didn’t plan ahead and their pennance is that they are going to pay 30-45% more on an that gun than if they were to have bought it three weeks before the electon cleared out stock. The product that was at vendors all went to allocation mode, which is a fancy way of saying that said vendor could have 500 S&W AR15′s come in later that day, and they’re not going to sell them to just anyone, they’re going to sell them to their best customers. I tell people to plan ahead. And this is why.

Ammo fell squarely into the same category. I got three calls right after the election for 10,000+ rounds of ammo. The one problem: there wasn’t any ammo to be had. Period. This was the same bunch of dealers/hoarders/speculators that bought the 6920′s.

Personally, my business acumen tells me that if I sell ammo at $1/box markup and I can get it in regularly, I can live with that. If I can’t restock that item for five months, my margin has to increase correspondingly.

I sold a customer 2,000 rounds of XM855 the week before the election at $375/thousand. After election day, he calls back asking if he can get more. I tell him sure. $450/thousand, on the basis that my vendors sold 40,000 rounds of this SKU in 12 hours. They do not have any more to sell me.

His response?

“Can you do better on the price if I get 10,000 rounds?”

I asked him to try something, which was to go to New Jersey after Hurricane Sandy, find a gas station and say “Hey, can you do better on the price if I buy 1,000 gallons?”

There just wasn’t any to sell.

Wholesalers dropped freight discounts and eliminated a lot of promotions… all because they didn’t have to discount to sell product anymore. Overnight, everything went to allocated status. Smaller dealers who have existing limited access to high demand products got squeezed even further.

Now, many of you who have read this far are probably wondering why I discuss the election before I discuss the school shooting. That’s because the event timeline for 2012 had a very strange confluence of three seemingly isolated events.

1. Christmas/Hunting season clearing out product as usual

2. Election season clearing out product more aggressively than usual in the black rifle category

3. Adam Lanza

What events numbers 1 and 2 did was set the table for event number 3. To be clear, post election, demand was high. But it was not, I repeat not at 2008 levels. I had some high net worth individuals shake their head at paying any type of premium for a black rifle. That was fine because for each one of them that said no, I had one who gladly paid my price. Product became hard to come by and the demand premium went into effect. Laypeople got very upset that that dealers raised prices overnight because of the shortage and they likened it to price gouging.

I continue to stand by the statement I made in 2012 regarding the shortage of black rifles. Oddly enough, you can apply the same statement to the present state of 22LR ammunition: there is no shortage. Capitalism has just been on hiatus since 2009.

We raised prices because, in a sense, the tail wags the dog. When I normally sell a Colt 6920 for $1150 and I can talk someone into buying it for $1300, the new market price is $1300. Anyone who sells them for more than $1300 is a better salesperson than I am, and anyone who sells them for less than $1300 is not as talented.

Firearms are, effectively, affordable luxury goods. No different than any other commoditized item like premium fair trade organic coffee beans, HDTVs or iPads. Demand went up, supply went down and those who didn’t like it should have bought their black rifles in July and not rolled the dice on an election clearing out warehouses. Note that the price hike was limited mostly to black rifles. Other commoditized firearms did not have a corresponding rise in pricing.

After the election, several things cooled down. Some guns started trickling back into stock and availability was still limited, but if you wanted to put AR style guns on the shelf – you could. You just were not given any choice on selection. This is where the dealer who bought 10 DPMS Oracles and BFI Carbon 15′s got lucky in January. Things went back to “normal” a few weeks after election day. Dealers couldn’t get ammo or any hard-to-find stuff, but if you wanted mags or other smaller things like a Glock 17, wholesalers had plenty.

What the election, Christmas and hunting season did was take so much product off the market prior to the Sandy Hook shooting that prices had nowhere to go but up. Here’s the post shooting play-by-play:

Friday, December 14 2012.

Business as usual at FC HQ. ATF did an audit earlier in the month so as they were combing through books, I was shut down to accommodate. This happened to be a blessing in disguise. While this was going on, I took the time to talk to vendors and I ordered every Colt 6920 I could get my hands on as some product was being made available. Wholesalers were letting 2-4 guns out the door every day to each account just to keep larger accounts from taking up all the supply. I can understand and can respect that. It levels the playing field.

Then I see a news blurb about the shooting. The phone starts ringing. I start knocking down 6920′s at $1050 – which is higher than pre-election prices and I sell a few.

I don’t think anything of it. I figure it’s a speed bump – no different than the Colorado theater shooting, Ft. Hood incident or the Sikh temple in Wisconsin.

Saturday, December 15 2012.

I’m at a gun show and I bring four rifles to the show, which is four more rifles than I normally bring. I see no panic buying whatsoever. One person actually needles me and asks me to sell him a gun at a price that involves me paying him $20 to take it off my table. He says he just wants the best deal possible and goes away to buy it at another dealer.

Sunday, December 16 2012.

I see emails about Diane Feinstein flapping her gums and I got an email from one of my sales reps. Saturday night, dealers ordered every single Daniel Defense, Colt, Bushmaster, and S&W rifle in their warehouse. Every black rifle they had in stock, gone. Overnight. Every single PMAG in the building? Gone. Overnight. He wants to know if I know anything. I say no and I wander around at the show. No panic buying, no changes in prices. All my stuff is priced reasonably and I’m wondering what will happen. I leave prices the same. The show closes, I see one or two black rifle sales but nothing worth noting. Seems like business as usual as I haul all my rifles back home.

Monday, December 17 2012.

This is when the wheels came off the wagon. For 12 hours straight my phone rang off the hook. My entire day consisted of the following:

Moron: “Hi, I see you are a dealer for…..”

FC: “Yes I am and no I don’t have what you are looking for.”

Moron: “You don’t even know what I want yet, how can you know?”

FC: “Stripped lower or complete rifle?”

Moron: “….yes.”

FC: “Don’t have any.”

Twelve hours of that. Straight. Combined with emails. Everyone seemed to be wanting rifles.

A high net worth individual called freaking out. I tried to talk him out of a panic buy. Sold two 6920′s to him at $1300 each. He didn’t even blink. I start wondering what the hell is going on. I started calling vendors.

One vendor’s dealer portal was shut down. Could be DOS attack or could be so many dealers are ordering product the system went down.

Other vendors, I can’t even get on the phone. I’m confused.

Tuesday, December 18 2012.

The phone rings off the hook all morning. I cannot get any 4473′s or NFA paperwork done. I don’t take any incoming calls after lunch because I have to concentrate on higher priority things. Talking with vendors, a lot of items are now allocated. Glock 19′s are even tough to come by. There isn’t a PMAG in the country that can be bought wholesale. Discounting has been eliminated. One of my reps talks about the potential for even further tightening of inventory, as in all accounts at X wholesaler will be getting no more than a certain integer of product.

This scares me.

If accessibility to product is further restricted, not just on black rifles, anything firearm-related is going to go up in price. For every profit center I lose, I have to make it up elsewhere.

Wednesday, December 19 2012.

More of the same. I write $13,000 in sales over the phone. All day long people are chasing product that I couldn’t get a month ago.

In summary: the panic buying started on Monday with no signs leading up to it. Attitudes are shifting. More dealers are being accused of price gouging which, according to the consumers, encompassed having an ad that stated $X before the shooting and then raising it to correspond to market conditions.

Here’s the bottom line: As long as I have been in the gun business, people perpetually state that they can buy whatever gun I have on the shelf cheaper via Bud’s Gun Shop or Gunbroker from another dealer. If a buyer can say “I can get it cheaper on Gunbroker” and demand a lower my price to make the sale, I think that’s fair.

But turnabout is fair play when I can say, “I can get more for it on Gunbroker” and demand a higher price to make the sale. Welcome to the USA. That’s a competitive marketplace. That’s capitalism. Every business that exists raises prices when supply goes down and demand goes up. But in the gun business, that’s viewed as price gouging.

As far as price shocks go, it is my view that price shocks are bad for the firearm industry. For that matter, price shocks are bad for any commoditized industry. That small gun dealer that just opened up in October of 2012? He’s in for some problems. If he started out a month before the election and can’t get product, he’s not going to make any money and will likely close the doors.

Having 20 Colt rifles on the rack, I sold them and I doubled, and in some cases tripled, my money. Great! I’m the best gun dealer on the planet! Go capitalism! Right? Wrong. Even with those margins, the product is unsustainable. Should a dealer not get any more in for a year, how do you expect a steady cash flow? That’s bad for everyone.

High net worth individuals and well-financed speculators run the table in a post Sandy Hook market environment. That S&W optics-ready carbine that I had priced at $875 that nobody wanted to buy? Sold it for $1200 after election day. The guys who get screwed are the guys who don’t have money. That’s business as usual. FC protip: Don’t be poor. For a dealer, there is no incentive to discount anything when people are buying whatever they can get rather than what they want. Expecting a dealer to cut you a discount is laughable. If you don’t have money, you will get screwed over by the guy who does.

Building on the idea of discounting, I suspected that our wholesale vendors would tighten credit lines as they don’t need to finance inventory to make sales. Their finance department might say, ‘Why should we wait 90 days to get paid when the dealer is going to flip that and make $2300 a gun tomorrow? We should get paid now!’ That actually happened. Terms that are typically generous for Q1 buying were cut back substantially, free freight promos and other allowances disappeared instantly. People complained that unless our costs went up, raising prices of product was unjustified. Technically, our costs did go up. That is, when we were able to actually buy product.

So after Newtown, everything during Q1 went totally batshit insane. I was waiting for PMAGS to hit $100 each, Colt 6920′s to hit $3000 and 5.56 ammo to hit $2/round just so I could sell my business and personal stash of guns and magazines and make enough money to retire and never look back. As Dirty Harry once said, a man’s got to know his limitations. That was my limit. But fortunately it never came to that.

(to be continued…)

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About FirearmConcierge

FC is a 2010 graduate of the University of Never been Done Before in Baton Rouge, Louisiana where he majored in abnormal psychology and firearm sales. Upon graduation, he founded a small firearm enterprise that does not negotiate with terrorists or people spending less than $10,000. He is TTAG's resident FFL holder/manufacturer/purveyor of assorted awesomeness and when he isn't shutting up and taking people's money or insulting their firearm decisions to their face, he enjoys cooking with uzi, the occasional skeet shoot, bourbon and anything to do with large breasted women and sub machineguns. He can be reached at firearmconcierge@gmail.com and followed on Twitter, @FirearmConcierg

157 Responses to Sandy Hook and the Economics of Mass Murder

  1. avatarLurker_of_lurkiness says:

    Honesty, I can respect that.

    • avatarPete says:

      The only part i dont respect is him bashing the nra. He shouldnt be such an azz to the group that protects our 2nd amendment. They arent perfect but are better than nothing.

  2. avatarGiao Nguyen says:

    I was too lazy to reprice. Pmags were sold during the panic for the same price before the panic. The same for 6920′s. Still made money.

    • avatarAnonymous says:

      Giao? Is that you from NOV in Houston?

    • avatarMike the Limey says:

      So when you sold out, what did you then sell to keep the cash flow running?

      Still have the lease to pay
      Still have taxes
      Still have electricity bills
      Still have the phone bill
      Still (maybe) have employees to pay.
      Etc., etc.

      In times of shortage, I HAVE TO up prices to ensure I have the reserves to pay the bills whilst the shelves are bare.

  3. avatarMatt in FL says:

    Thanks for writing this. I always enjoy a “peek behind the curtain,” no matter the industry.

  4. avatarST says:

    As a Business major who got a crash course during The Gun Run of Twenty Twelve, my thoughts are this.

    Get ready for cyclic cycles like this in the business.That’s not directed at the staff of FFLs,but us customers.Just like the business cycle goes from boom, to recession, and returns to the boom times, so it goes for guns.

    Since our country likes electing leftist stooges, every four years there’s going to be a run .Just plan on it like we do tornado season and hurricane season.If you don’t think you have enough high cap mags, buy them now.

    If you want a certain gun likely to be on Feinsteins shit list, get it now.Don’t wait until the CNN stooges flap their yaps about another AWB, because as this article proves you WILL be outbid. I’d advise my peers to square away their “gun bucket list” ASAP -for tomorrow isnt promised to any of us.I’ve got the pieces I need, and if heaven forbid the sale of firearms were impossible tomorrow I’d manage just fine. Ammos a different story, but that’s a work in progress anyways.

  5. avatarKCK says:

    I just happened to call my local Cabela’s (still more than an hours drive) on Thurs Dec 13 2012 and they said they had a couple of S&W AR15 Sports, the rifle I had researched and selected over a Carbon 15, I had planned to go in that Saturday Morning and pay $775. That didn’t work out. Three days later I snagged one for $895 at an LGS. Got what I deserved.

  6. avatarBud Harton says:

    Thanks for an honest description of exactly what I have always believed to be true.

    Having been through it three times now as a consumer (2008 and 2012 and once before in 1994) I have learned my lesson. I buy ammo and store it when it is available now, regardless if it is more than I expect to use in the near future. And having specific guns at home is now controlled by the” one is none, two is one” rule.

  7. avatarI_Like_Pie says:

    LOL – Cheaper than Dirt…Is that you?

    All kidding aside. This is the way most industries not being squat humped by wal-mart behave. It is the dirty sausage making behind the story called supply and demand.

    Good for you in realizing that most of the gun buying public understands politics, but not economics. This is how money is made again and again on short sighted people.

    • avatarCharles5 says:

      “This is the way most industries not being squat humped by wal-mart behave.”

      I almost choked on my gum I was laughing so hard.

    • avatarFirearmConcierge says:

      CTD is a whole different ballgame, for starters – their virtual inventory of wholesalers guns at $3 above wholesale crashed because of the panic buying.

    • avatarTTACer says:

      I consider CTD a little different because they did not raise their prices (at first), rather, they stopped selling SBRs (scary black rifles, what did you think I meant?) briefly while they tried to gauge which way the wind was blowing, then they raised their prices.

      CTD can go f’ itself.

      • avatarMatt in FL says:

        Let’s not forget the “cancelled existing orders and then offered those items for sale at higher prices.” Though they weren’t alone in that.

        • avatarJuanCudz says:

          Now that’s dishonest, low. And someone should look at the t+c’s with their attorney.

        • avatarFirearmConcierge says:

          You know why they did that, right?

        • avatarMatt in FL says:

          I think the popular answer is “because they’re greedy bags of excrement,” but I think the real answer is that all of their inventory is virtual, and all of their “warehouses” are actually retail establishments, and when CTD came calling those retail establishments either refused to honor their deal or simply didn’t have the items in stock anymore because they’d sold them locally. The new, higher prices reflected their expected cost of replacement, just like any other retail establishment.

          Please correct me if I’m mistaken, because I don’t like to be wrong.

  8. avatarCharles5 says:

    Good read. I chuckled real hard at this line: “FC protip: Don’t be poor.”

    I have always been mocked and teased for my preparedness, but have had the last laugh on more than one occasion (read: Hurricane Sandy). I am no prepper; I live in an apartment and do not have enough room stuff like that. However, my biggest fear in life is being caught with my pants down when I had ample opportunity to buy a belt. Ever since my job and savings allowed for it, I have always had a general policy to buy in bulk the things I use most. I didn’t run out of ammo during early 2013, not even close, and I am even better stocked today.

  9. avatarWV Cycling says:

    8th paragraph:

    My opinion is based on his voting record and comments on the subject, not an attempt to be a fear-mongering gun dealer shouting that people should ***by*** whatever I have in stock before it gets banned.

  10. avatarJethro says:

    Where’s the “shock and offend” part?

    • avatarPeterK says:

      I believe it is the price gouging apolegetics, haha.

      I am screwed btw. Not a lot of disposable income. :p Ah well. Just have to be patient, hopefully.

    • avatarNYC2AZ says:

      I guess it’s shocking and offensive for those that don’t understand basic supply and demand… you know, most of the people in this country that want something for nothing and still have the guy selling it to them making $15/hr with full benefits and retirement.

    • avatarWRH says:

      Probably coming in part two, as this seems to be preamble, interesting though it may be.

  11. avatarBBcatcher says:

    These shops should be careful in choosing short-term gain v long-term gain. After Sandy Hook most of the gun shops around here doubled their prices or more on anything evil-looking. One shop raised their prices only slightly. All the shops are back to the same prices now, but I only shop at the place that didn’t price gouge.

    • avatarMichael B. says:

      They’re not charities, dude. If you ran a gun shop and the income from it was the only way to provide for your family, you’d do whatever made economic sense.

      • avatarBBcatcher says:

        Sometimes what makes sense economically is to consider your long-term relationship with your customer. Most of us gun owners are repeat buyers

        • avatarMichael B. says:

          All the gun shops around here raised their prices. Guess what? I bought earlier in the year and there wasn’t much I wanted besides ammo. I even found that during the panic at reasonable prices, even though it took a lot of hunting and some interwebs skills.

        • avatarFortWorthColtGuy says:

          I agree 100%. I do not blame the shops for charging what they did and I support their right to do so. However, I can choose whom to buy from. There was one LGS around here I bought 3 guns from over the past few years. They price gouged like crazy in the rush. I now choose to shop elsewhere and they have lost many sales and future sales to me.

          They have their rights and I have mine.

        • avatarFirearmConcierge says:

          That’s a great point.

          Here’s the economics:

          If I work on a fixedmargin, and you ask me to sell you a SCAR at 10% markup instead of the 100% markup that I can get due to market conditions, and I do – how much stuff do you have to buy for me to earn back that lost markup?

          When I go from making $100 a gun to $1000 a gun – and you want me to make $100 a gun on you – to lock in your repeat business and value your relationship, that’s an acceptable request that I will follow up with the following. How much more business are you going to give me to make up that $900 difference?

          You have to buy at least $9000 in future product from me for me to BREAK EVEN on that deal.

          Unless you are a major customer, it’s cheaper for me to lose your business forever and take the money and run.

        • avatarMatt in FL says:

          Math is hard. It’s asking a lot for people to understand math. Could you do it with colors maybe? Shapes?

        • avatarBBcatcher says:

          Granted, it would be a while before you could make up the difference in profit on a customer for a 10% v 100% markup – though not impossible. However, your example assumes that you’re only losing customers among people who are shopping for ARs. As I stated before, I changed where I shopped bc of what I saw as price gouging. But I was never in the market for an AR – I already had 2, as well as a nice stock of ammo. The LGSs around here probably had about 10 ARs each before the gun rush and probably did make the $1000 v $100 profit on each that you describe. That makes an extra $9000 added to your bottom line for the year, not bad. However, among my gun-owning friends, about half of us stopped shopping at the places that seemed to price gouge. Assuming that’s representative of their clientele as a whole, I wonder how long it will take to lose that extra $9000?

        • avatarMatt in FL says:

          If you are representative of your friends, then take what you spent for each of the last… let’s say five years. (If you’re not the most representative, find the friend who is.) But only the money you would have spent at that store. Be honest. If you don’t ever buy ammo at that store, then don’t include that amount. (For instance, I’ve never bought anything but range ammo — ammo required to be used in their rental guns — at any of the LGS in my area.) Add those five years together, divide by five. Multiply that times the number of friends you are pretty certain stopped shopping there. What do you get? Divide that number into $9000 to figure out how long it would take him to make up the difference.

          Oh I forgot. Go back to that next to last number, the one you divided into the nine grand, and knock off about 30%. That’s to counter all the places you overestimated during the process, because you wanted the numbers to be bigger, so you’d be right. No offense intended, everyone does it. In a situation like this, where I’m asking you to estimate things to prove a point, it’s very common for people to overestimate by 30-50%, and it’s not even really “on purpose.” Once you’ve knocked off that 30%, divide into $9000 again, and see how long it is.

      • avatarMarcus Aurelius says:

        For some running the store is a means to some ends, the ends being food for the family and a desire to keep alive and spread the shooting arts and sports. For some business owners absolute maximum profit isn’t the goal, enough is enough, plus not raising prices in the panic will give that store an edge over others, so far as supplies last anyway.

        The “self interest” that drives a market economy is not entirely greed, though the markets have a way of yoking the greed of individuals towards productive ends. But the self interest itself can be anything, including the drive of philanthropy that created the thousands of charitable organizations that encroaching statism have been driving away.

        I swear, if i were employed at a university my title would be “Digressor” instead of “Professor.”

    • avatarSmurfico says:

      There seems to be some confusion between profiteering and survival. While I understand the merits of long term versus short term gains, those arguments tend to get thrown out the window if a business is in danger of closure. If a business is forced to rely on fewer sales due to a scarcity of supply, the only logical course of action is to increase the amount of profit.
      It is likely no consolation to the owner to know that you would have continued to patronize a noble business after it has gone bankrupt.

      • avatarBBcatcher says:

        I have no objection to people trying to turn a profit and fully support their right to set prices to whatever they deem appropriate. Additionally, I can understand the anxiety some LGS owners had over the long-term viability of their buisiness. That said, I think the shops that raised prices steeply made a mistake. Look at it from my perspective: prices are the same at all shops now. Why shouldn’t I support the shop that maintained more reasonable prices during the craziness post-Newtown? I can’t think of a good reason, all things being equal. And I have supported them, with 4 gun purchases this year, as well as many ammo purchases. I think the smartest thing (economically) for these shops to do if we have another run on guns is to pull the sought after guns from their shelves and either sell them anonymously on Gunbroker or take a wait-and-see approach c what legislation passes. If it seems like ARs are likely to be banned, sell them at whatever price you want – no one will hold it against you at that point

        • avatarSmurfico says:

          I understand where you’re coming from but… I also see a small business with fixed costs facing a loss of revenue and the voice of Ray Liotta in my ears.

          Had a tough month?… too bad, pay me
          Car broke down?… too bad, pay me
          Atf increased your fees?… too bad, pay me

          I appreciate being principled but I would be very hesitant to draw a line in the sand when the issue involves so many shades of grey.

        • avatarMatt in FL says:

          That’s not exactly how I remember that line. :)

    • avatarDrew says:

      supply and demand is the beauty of capitalism. price increases vs. gouging is always a line in someone’s head. the only local shop in my town that i refuse to visit now is the one that actually sent employees to other stores (academy,basspro, etc) and bought all the ammo to resell in their store at serious markups.

    • avatarFirearmConcierge says:

      An interesting theory, but when people are calling you – they’re calling you as the retailer of last resort. You never had their business and after Sandy Hook – you won’t ever again until the next gun run.

      • avatarHannibal says:

        Good point. I happened to find a store that didn’t mark up everything as much as everyone else and I shop there now, so it happens sometimes, but I had never shopped there before.

  12. avatarFortWorthColtGuy says:

    I am curious as to when the market is so saturated with black rifles and other firearms that the prices crash. Not just to just pre-election prices, but to rock bottom. Supply and demand works both ways. One days there will be more guns than people that want to buy them.

    • avatarPhoenixNFA says:

      nick wrote about it long about august with regards to the “Cheap” ar-15s (DPMS ORACLE, DEL-TON, SMITH Sports, etc).

    • avatarrawmade says:

      Well right now you can build pretty decent ARs for 500. Not DPMS Oracle quality, actually decent rifles. On Black friday you could do a complete for 400. Were seeing record lows on some parts. Under $55 on lowers, $39 on uppers, etc. Id say its getting pretty rock bottom

  13. avatarLayne says:

    Good read, thanks for writing.

    The part I don’t get… People want to own rifles they didn’t have. Presumably they didn’t have them already because they are poor (I’m pretty sure high net worth individuals did not make up a bulk of the panic buyers). So now they’ve paid way too much for them (which is stupid because they are poor), but no emergency came to be. So NOW they are SELLING them at an enormous loss (which is stupid because they are poor) and AGAIN they will not own the rifle they want to have. The only conclusion is they don’t actually want the rifle at all, but just the option to buy it sometime in the future…?

    The other bulk of the panic buyers are the flippers. Someone who did not have the foresight to buy before the panic, but still wants to cash in on it. They pay stupidly high prices in hopes of returning retardedly high prices. And in doing so artificially inflate the prices and deny supply from people that actually want or will use it. No sympathy for them when they’re caught holding the bag.

    • avatarHannibal says:

      The former are probably the kinds of people who take payday loans.

    • avatarJonathan -- Houston says:

      I agree except for the part about flippers artificially inflating prices. The major factors affecting consumer demand of most things are price, income, number of consumers, expectations, and related goods (complements and substitutes.) Price is important because it ranks products against each other in terms of their scarcity now. Expectations are important because they add temporal depth to the equation; that is, what is scarcity going to be in the future.

      Flippers, speculators, etc. serve a value market service, despite the agony of higher prices, because those higher prices signal to suppliers that the collective wisdom of the market expects demand to remain high for an extended period.

      Without those signals, as by imposing price controls, suppliers are not signalled and compensated for ramping up production. Neither are consumers restrained from overconsuming. These combine not only to continue the shortage, but to exacerbate it. How? By keeping prices below market level, as we see authorities do with gas after hurricanes, we’re encouraging people to overconsume already scarce resources because they can be had so cheaply.

      Without speculators driving up prices to reflect expectations of future scarcity, current resources won’t be allocated to their highest value use and would-be consumers will be left out. Picture some jackwagon wasting gas tooling around in his truck gawking at hurricane damage, just because he was first in the price controlled gas line. It’s actually speculators, by driving up prices to reflect expectations, who ensure that product and their replacements will be available. Without them, some guy would just buy at low prices yet another AR and shove it unused into his safe.

      Speculators can be wrong, of course, but as you mentioned, it’s their money on the line and they’ll lose in a price collapse. So it’s in their interest not to overplay their hand and bid up beyond what realistic expectations would support.

  14. avatarPhoenixNFA says:

    question, do you transfer stuff in for people in your state, if so what are your fees?

  15. avatarJeff says:

    I don’t understand the last paragraph. It DID come to that. I saw many colts going for $3,000 and pmags going for over 80. I sold bone-stock AR15′s with quad rails for $2500 hand over fist at gun shows late december, and I was selling boxes of steel-cased 5.56 for $20 a box. The situation you described as the end-all be-all is what happened.

  16. avatarLC Judas says:

    I smelled the scare detailed in the post above. I went above and beyond to secure $4500 in ammunition, mags and firearms right as the bubble burst.

    I made $985 on one investment. I spent this year not buying any overpriced range ammo. Mags for two different platforms in question went dry but i never noticed. I got my cans ordered right before and they came in well before the panic application rush and I still relish the AR I got for market price weeks before it would’ve sold for $7,000.

    I warned others right as I did it. And honestly, I would do it again. If I had ordered 4 days later I would have just an AK and 500 rounds tops. Not the plethora of things I kept in mind in case of emergency to watch.

    I remember searching online and seeing how utterly spent the market was. It was surreal. Everyone I know called for some ammo and firearms. I started saying I had none. Economic rules teach stone hard lessons.

    The same dealer I got an IO inc. AK from for $629 was bare shelved hours later. The hit he took was only matched by how many favors he called in to stay stocked.

    You can’t treat the normal market as potentially volatile as the stock market but…economic reality is…that it is at the political drop of a hat. That intangible is as real as any number on the balance sheet.

  17. avatarSovereign says:

    Enjoyed the read, interesting to read the perspective of what happened from a dealers viewpoint.

  18. avatarGadsd N. Flagg says:

    A buddy and I had been, since 2009, making purchases based on thinking through not only what we needed (two is one, one is none, THREE means you have a backup), but also on “war-gaming” some what-if scenarios concerning politicians and their affinity for tragedies. So we were in pretty good shape before Newtown happened, but when everyone went insane and it looked like this event was NOT just like any other mass shooting, we had to consider the possibility that some products simply might not be available for a year or more. And we were “light” in some areas, so…

    So yes, we took advantage of our status as HNWIs. When the gun/ammo dealers gave us a price we were willing to pay, given the situation, we pulled out (lots of) cash and said thank you. No griping, no bitching, no complaining that the prices were lower last week, month, or year. And if we thought the price was too much for us, we didn’t yell at the guy for “gouging” or being “unfair.” We just said that’s too much for us, but you’ll probably sell it later today to someone who needs it more than we do.

    Because we knew that’s how prices work. The market balances supply and demand so that there’s usually SOME product available at SOME price, because no matter how high the dollar amount it might be absolutely worth it to the man or woman who needs it. In some cases that was us needing it, and in some cases it wasn’t.

    So I really enjoyed reading this piece. I’ve seen similar articles on other websites (especially precious metals-related sites) get hammer-slammed by whiners complaining about price gouging, but those idiots never think about how any business is supposed to stay open after selling everything at “regular” prices when there isn’t anything else to sell for the next six months because of supply disruptions. I hope your story helps all of us better understand how these events played out from the viewpoint from “the other side of the counter.”

    • avatarWayne in Mo. says:

      The honest gun dealers would not and did not do what you did. You are a thief. You will lose in the end.

      • avatarTarrou says:

        Lolwut? You trolling mate?

      • avatarFirearmConcierge says:

        I love how a 10% profit is honest and a 100% profit is dishonest.

        I hope you never purchase a soft drink at a restaurant.

        • avatarjwm says:

          When i worked at Taco Bell the soda was .79 cents a cup. That soda cost the company a total of .07 cents. Don’t get me started on the mark up at a pizza joint or a jewelry store.

        • avatarMatt in FL says:

          Three words:

          Movie. Theater. Popcorn.

      • avatarCharles5 says:

        And so begins the slow, yet determined slide into progressive liberal thinking: “I don’t like what they did/are doing so they should conform to fit my preferences.”

        If you want to be angry at anyone for high prices, be angry at your fellow consumers that are willing to pay those high prices. If no one would pay those prices, they wouldn’t be that high. You should have the right to buy anything you want, but you do not have a right to a certain price point.

  19. avatarLuke says:

    My hometown FFL went out of business. His main income stream was ammunition. He couldn’t get restock inventory.

    Honest guy, tried to do right by everyone, judged the local demand accurately, had capital to ride out any short-term shocks.
    All undone.
    Life just sucks sometimes.

  20. avatarwhit says:

    Great article.

    I feel good for only buying C&R’s during the panic. I got some great prices.

  21. avatarKris says:

    I was one of the poor dummies that paid $1200 for a $900 AR in ’08. Having learned my lesson, I sold it in January of ’13 for $1500. Having cleansed myself of the embarrassing reminder of my stupidity, I sat on that $ until prices dropped to current levels, where you can have your pick of M4s for $600. Even though I’m sure there will be some gratification the next time this happens, I would much prefer it never does. I like a world filled with $600 ARs and $12 mags.

  22. avatarAnonymous says:

    So… FirearmConcierge,

    What is your website? So I can check out your goods.

  23. avatarScott says:

    True capitalism at work. Seems buyers only are happy when it works in their favor. ;)

  24. avatarRalph says:

    My FFL never gouged anyone, made plenty of money and earned hundreds, maybe thousands of loyal customers for life.

    It reminds me of the old adage about stock market investors. “Bulls make money, bears make money, pigs get slaughtered.”

      • avatarMatt in FL says:

        If you’re going to insist on embedding videos that make no damn sense, could you at least find one that wasn’t filmed on a potato?

        • avatarBrooklyn in da house says:

          If i copy the url and paste it in a comment why would it show up the way it did? It was about the pig comment. Potato ?

        • avatarMatt in FL says:

          Just lop the http:// off the front when you paste it in, and it won’t embed.

          The potato thing was sort of an inside joke. It looked fuzzy on my phone. Somewhere I once read where a person asked, “Holy shit, was that filmed on a potato?!” about a really crappy video.

          The makes no sense part was just me being me. Feel free to ignore.

        • avatarBrooklyn in da house says:

          Fair enough.

  25. avatarensitue says:

    Dear Dick
    Thanks for re-telling a story that is nearly 2 years old along with a re-telling of a story a year old as well as your view of your customers and suppliers. I never would have guessed that the 4th quarter is a big money making season in the retail trade.
    And a VERY Special thanks for calling your customers, and gun owners in general, stupid.
    I’m sure you were very entertained by the process

    • avatarCharles5 says:

      I think you are taking yourself a bit too seriously.

    • avatarChuck in IL says:

      For being an “old” story, a lot of people still do not get it.The same people who whine about price gouging dealers are the same ones who buy .22 ammo on the secondary market (at a markup), then turn around and cry some more because they can’t find it in a store.

  26. avatarM says:

    In an odd juxtaposition, Obama’s victory was a win for the 2nd Amendment. Had Romney, a pro-gun control, pro-socialism Republocrat won, we’d probably be lining up at the local recycling center to trade in our guns for Romney care vouchers,

    At least with Obama, the Socialist we saw, was the Socialist we got.

  27. avatarChad says:

    It wasn’t reasonable price increases due to supply and demand that ticked me off. It was companies like CTD that went off the deep end with price gouging. At one point, they had USED Colt 30-round mags listed for $115. I broke out my stash of used 30-rounders at a gun show at $30 each and made enough to pay off all of my credit cards. Was that price high? You betcha’. Was it fair? Considering the fact that everyone else was selling them for $40, I think I did a lot of people a favor. But to price the same junk mags at $115 a piece? That IS price gouging. A lot of dealers don’t realize that we, the buying public, DO understand the economics of gun shortages. Unfortunately, it’s the bad eggs in the business world that cause headaches for the honest ones, just like the idiot customer makes the rest of us look bad.

  28. avatarDirk Diggler says:

    I loaded up on ammo right after Barry got re-elected. Had a few guns but I was able to buy what I wanted for the right price but I have cash and a nice income. No bitching about price b ut a willingness to buy when the mood hits me.

    Having a econ degree from a top school helps, too

    • avatarTom in Oregon says:

      Yup. I spent half my bonus check on 25 cases of ammo in October 2012.

      I enjoyed this article. I watched this stuff happen working for a friend at portland gun shows.
      It was insane.
      People were spending crazy amounts of money.
      Saw a rock river .308 sell for $3,000.00.

  29. avatarAccur81 says:

    I get economics, but you’re kind of a prick. People make panic purchases. Knowing the market, and the endless drivel from anti-gun politicians, we consumers could not know the outcome of future laws. The threat of a renewed national assault weapons ban loomed large, and required a significant effort to overcome. Ammo taxes, enhanced background checks, mag bans, and other measures were all on the table. The Arms Trade Treaty got signed. Many blue states were screwed over with additional asinine gun laws. Overall, things didn’t go too badly, but that outcome was virtually impossible to predict. Obama, Feinstein, and many others would have gladly sold our gun freedoms down the river given the opportunity, and they still will.

    So you raised your prices. Good for you. I don’t despise you for calling your customers morons, but I don’t appreciate your attitude either. People simply want the most for their money. Some customers are reasonable, and some aren’t. That’s retail, and it pays your bills.

    • avatarSouthFork says:

      My thoughts exactly. However when you’re cool on the world’s most popular gun blog and the cesspool of Reddit…

      I don’t mind his business decisions but would not knowingly purchase a damn thing from him.

      • avatarFirearmConcierge says:

        Well then it’s a good thing I’m anonymous then.

        • avatarmiserylovescompany says:

          Careful there. The fact is that you’re never quite as anonymous as you might think. I happen to think that your write up was well-done and informative, but your diplomatic skills definitely need work. Particularly in the long run.

          Tom

        • Isn’t in interesting how people’s views can differ so drastically about the same thing? I can see a movie review on Amazon that some people say was the worst movie ever created and other simply love it.

          In this case, I really enjoyed the article (I’m fascinated by economics) and didn’t think you had any “attitude” at all, while others think you’re evil incarnate. Strange.

        • avatarMatt in FL says:

          I think a lot of the “evil incarnate” feelings are still spilling over from his previous post.

          It’s funny that our feelings about making money in this country are a curious mix of American and English values. American in that “Fuck yeah, capitalism!” and everyone wants to get more money, but English in that you’re supposed to be somehow reserved about it, that doing it in an ostentatious manner is somehow unseemly.

          So from his previous post, he’s making money (and good for him for doing it) and I think the vast majority of people reading this would do the same in his shoes and understanding the realities of the situation, but since while he’s making that money he’s “laughing all the way to the bank,” it somehow turns it into something dirty and to be ashamed of.

          If he wasn’t so arrogant about it, most people wouldn’t have said a word. Curious, that.

  30. avatarsquashpup says:

    People often get mad when retailers mark-up their prices during shortages, while failing to realize a basic law of economics: if the retailer is experiencing a shortage of product and uncertain future inventory, how can he make any sales? How is he supposed to keep the doors open?

    Mark-ups aren’t dishonesty or gouging…they’re survival. I was glad one local retailer marked up his inventory. It discouraged panic buying and ensured that I could always get what I needed, albeit at a substantially increased price.

    Because I’d rather buy a box of .22 for $40 than not find it at all at $16.

  31. avatarJonathan - Houston says:

    Every bit of economic observation/analysis in this article is 100% correct. Maybe a slight blurring of a couple of technical terms as used in common speaking; but that’s just me trying really hard to find something amiss here.

    Now, I’m not offended by any of this on substance, because I know the economic science at work. I’m completely cool with the market economy, scarcity, the profit motive and free floating price signals to suppliers. One could knock the firearms industry for apparently having never heard of the methodology of S&OP; but their suboptimality really isn’t my concern, either. After all, I do other people’s thinking for a living, so I definitely plan ahead in my personal life, too, and not much of this affects me.

    That said, and the next sound you hear will be that of the other shoe dropping, I just wouldn’t ever buy from this FFL because he sounds like the world’s biggest feminine hygiene wash product on the planet!

  32. avatarSoccerchainsaw says:

    Good article.
    About the line: “Besides, I can’t compete with the NRA in the generating-complete-and-utter hysteria-out-of-nothing department.”
    I don’t think we have the luxury of thinking “Oh, it’s nothing. It will pass, don’t worry about it.” while the anti gun crowd looks for ways to insert their desired bans at every level of government and try to pressure corporations to toe their line. So, I would say that this is a bit of a miscategorization of what the NRA does. They do do it very enthusiastically I will admit.

  33. avatarrawmade says:

    As i said in your other article, I dont habe any issue with how you price things. Im a staunch supporter of capitalism. The reason youre a douche is you flaunt that you do it and call your customers or anyone that asks you a question about stock or whayever else, idiots or morons.
    Theres nothing wrong with pricing that Colt at $2500, thats your prerogative and your business. There is something wrong with doing so then going “HAHA LOL I TOOK THIS STUPID MORON FOR 3X ITS WORTH WHAT A IDIOT LOL”
    Or “this guy asked me if i had lowers in stock WHAT A F’ING DIPSHT!”
    Thats why youre a total douche and I can see why you post “anonymously” without actually letting people know what shop you are, because you know youre a total douche and know your business will take a shit.

  34. avatarHKfan says:

    Assuming FFL transfers never get banned, there is zero reason to ever buy from a LGS (ONLY exception: items subject to HAZMAT). LGS doubling their prices and screwing their customers? No problem. I’ll browse the LGS, handle all their guns, decide on what I want, and never buy a single thing from them. I’ll head on over to a number of internet stores that have rock bottom prices and decent inventory. Can’t find it on any internet store? I’ll look to forums that cater to fans of a particular product or well respected forum where most members don’t price gouge (SH, M4C). I’ll find what I’m looking for for a competitive price. I always do. And when I do find what I’m looking for, I’ll have my pawn shop do the FFL transfer. And I’ll smile all the way knowing full well that most LGSs don’t realize they are a vestige of the past.

    • avatarMiamiC70 says:

      Those are my thoughts too F’ all my LGS. All gouging scumbags with piss poor attitudes and business skills. Also, yea I can afford it but I refuse to allow some clown to take advantage of a situation. So, I buy everything online and or used. Flat out refuse to buy from LGG’s and have do e fine for years. I get better service and better prices online and if I want a gun buy it used or online and to FFL. My favorite is to walk in ask for a price and then when the ass clown gives some bullshit price nothing I love more than having rifle delivered via UPS and handing them the FFL fee. Did it with my LWRC, Tavor, my HK USP’s. One asshole quoted me $2700 for an LWRC 3 years ago with a straight face, his face was priceless when the rifle showed up and then I dropped another $1000 on Eotech sights and magnifier online.

      You know who gets the bulk of my business now Bass Pro because every day whee my my LGS assholes? In line at Bass Pro stocking up at 10am.

      I know there will be a big cry about the little guy and capitalism. But you know what LGS owners/ employees when you shut your doors I’ll be there to laugh and you will all have to get a real job in the real world.

      • avatarKMc says:

        I am the LGS in my area and am thoroughly confused @ your hatred of such. Did someone big hole you one time and you can’t get over it? Someday you WILL want or need something ASAP and I hope you crawl on your hands and knees to the closest LGS to get it.. And I hope they tell you to FO because that is what you deserve. We are honest businessmen trying to survive against the Big Boys and unless you have owned any business, and have had to deal with customers like you, I’m afraid you just don’t get it. Don’t paint us all with FC’s brush.

      • avatarKMc says:

        You must have been the “Customer” we had in our store on Monday who looked @ our rifle selection, noticed we don’t stock Tikkas and proceeded to educate us on the fact that any other brand is a POS. I didn’t realize we were being graced by your presence, next time call first so I can break out the Vasoline before I kiss your ass. Right before I kick it out the front door.

        • avatarHkfan says:

          I think his dislike of LGSs comes from the same place as many gun owners. In short, LGSs have virtually zero utility these days. Their inventory is generally small and limited to mostly poor quality crap, their prices are generally outrageous, even pre-craziness, and the knowledge of the employees is pitiful. Even the most novice gun owner, given a solid week of due diligence reading respected me ears posts in forums will know than most minimum wage gun store employees. The service they provide is abysmal as well. I get friendlier service at the gun counter at Walmart.

          And if I need a part, tool, or gun immediately? It’s unlikely a LGS would even have it in stock. Much more likely midway/brownells/Sinclair will have it in stock, cheaper, and can get it to me lightning fast.

        • avatarKMc says:

          He probably had one bad experience at the LGS so now he blows them off and brags about how he treats them. I’m shocked he is even allowed inside with that attitude. If you want to support WalMart and love their service, keep going back. I spent 31 years building relationships with my customers in the Farm Equipment business and they are in the top 5 list of toughest people to make happy. No one person or business can always be the cheapest and have the best availability. That is true in any business, we are just trying to survive right now on allocated inventory. He is dumping on every LGS with his comments. What does he do for a living? Has he ever worked retail and had to suck it up on the crappy days and tell himself tomorrow will be better? I doubt it. And we never gouged anyone on what little inventory we could scrounge up.

  35. avatarEagleScout87 says:

    I was with you until this:

    “Firearms are, effectively, affordable luxury goods. No different than any other commoditized item like premium fair trade organic coffee beans, HDTVs or iPads.”

    Coffee beans do not protect a mother from a rapist, ipads do not protect an old man from a home invader, hdtvs do not protect a nation from tyranny. they are goods no doubt, and tools foremost, but luxury items? hardly. of course that’s if you believe in the 2nd Amendment and why it was written, if you don’t then I can see believing they’re just nice to have luxury items….

    • avatarAccur81 says:

      Agreed. Anyone who has used a firearm to defend their life would view them differently, or at least they certainly should.

      • avatarHannibal says:

        True but, to be fair, what changed after Sandy Hook? Were you more likely to be mugged the day after? I don’t think so. The only thing that changed was perception. It got people to pay attention to gun issues. And since the perception was really the only thing changing, it’s hard to feel THAT bad for someone who suddenly wanted a black rifle because they thought maybe they couldn’t get one otherwise.

        I feel a lot more sympathy for the people who go through a couple of ammo boxes a month for practice and ended up in trouble because they hadn’t expected the insanity.

        • avatarMatt in FL says:

          Agreed.

        • avatarEagleScout87 says:

          “hdtvs do not protect a nation from tyranny”

          weaponized IRS, NSA domestic spying, spying on the press, Fast and Furious, using mentally ill in gun running schemes, the encroachment of tyranny sure has changed since Newtown…. and the second amendment was never about muggers.

          “it’s hard to feel THAT bad for someone who suddenly wanted a black rifle because they thought maybe they couldn’t get one otherwise.”

          It’s hard to feel bad for all the Americans who just turned 21? the Americans who had financial obligations that prevented purchase before? give me a break. I find it hard to feel bad for the gun owners who own 6 black rifles and felt the need to get 6 more lowers, 6 more uppers and 3 completed black rifles and 5000 more rounds of .556 on top of the 5000 they already have cached. I have a feeling the large majority of the AI is such an individual……The guy who goes through a couple of boxes a month practicing is more than likely in the know and pays attention to the landscape, saw the 2008 panic and if they haven’t anticipated the insanity at that point, shame on them.

          Proverbs 27:12 “The prudent see danger and take refuge, but the simple keep going and suffer for it”

        • avatarEagleScout87 says:

          5.56, stupid typo.

  36. avatarjanklow says:

    “Besides, I can’t compete with the NRA in the generating-complete-and-utter hysteria-out-of-nothing department.”

    but you WILL use it to maximize profit and say nothing to the contrary while ticking off reasons explaining the hysteria?
    …plus, i suppose it’s not hysteria if, you know, you live in a state that DID end up with a gun ban as a result of said events.

  37. avatarGreg in Allston says:

    FC, this is a great piece. So, fuck yeah!!, America!!, Capitalism!!, The Market!!, Externalities!!, Supply and Demand!!, Scarcity!! Econ 101!! it’s too bad that most of this will be lost on the average low-information citizen. That said, it’s all working as it should. The Scout motto is Be Prepared. You do what you want to do but please don’t come crying to me when your lack of planning and preparedness comes hard up against the real world and falls flat. Bummer, I’m sorry for your loss, suck it up and get the Hell out of my way thank you very much.

    • avatarFirearmConcierge says:

      Exactly.

      Speaking of getting the hell out of my way – 66 bus to Harvard Square. Shake Shack.

      Shack Burger and cheese fries. Thank me later.

  38. avatarDe Facto says:

    I resent being called a “moron” and hearing “hurr durr you shoulda planned better dummy”

    Not everyone in the great gun rush was there by choice.

    I was new to guns and more importantly, fresh off unemployment when Obama was re-elected. I had been scraping money together for a couple months to purchase my first gun when Sandy Hook emptied the stores.

    So yes. I was unprepared. I chose to purchase a gun at an obscene mark-up because I had no idea if I would be ABLE to purchase it later. Particularly when my Senator in a very RED state started waffling and saying “Maybe we should allow capacity limits.”

    So to the dealers who jacked their prices up -that was price gouging. Call it what you want, but parroting “whatever the market will bear” is a surefire way to lose me as a customer, permanently. I have a couple smaller shops that I’m loyal to because they DIDN’T participate in the price gouging. They can’t always beat the bigger shops for price, but I also know they’re not overcharging me at every opportunity.

    • avatarFirearmConcierge says:

      I love comments like these. I’ll address them in Part 2.

      • avatarAccur81 says:

        The comments regarding your attitude or the comments regarding price gouging?

        • avatarmiserylovescompany says:

          Oh this is gonna be good. Even better because up until 5 hours ago I used to work at Hellmart, so I know a thing or two about the customer always being right :-)

          Tom

      • avatarDe Facto says:

        Just for the record (I know this is thread necromancy, I’ve been AFK for several days and I feel like finishing my thought) the bit about needing to make extra cash for the dry season to come is BS. I was backorder #27 for an HK MP5A5. They stopped allowing backorders for it after about 50 people were backordered for that specific item. This was at a store with a “no refunds, back orders must be paid up front 30% nonrefundable, if you change your mind the money will be turned into store credit you can apply to anything else in store.”

        So, yeah, their stock ran out. But they didn’t raise prices unrealistically, and they definitely made sales despite not having anything in stock. I waited about 3 months for my gun, and I know several people turned their store credit in for something else. However, the majority of people who backordered STUCK TO THEIR BACKORDERS with that store because the price was lower than at competing gun stores.

        You don’t have to price gouge to survive. You just have to be smart and fair.

        • avatarMatt in FL says:

          That’s a false comparison. You’re talking about honoring a back order when they already had your money. Most of the conversation here has involved new purchases after the shortage is known, not honoring existing contracts.

    • avatarShaunL says:

      Just to be fair to all sides…. You do realize that most of his statements were generalizations and to include every single unique situation would require THOUSANDS if not MILLIONS of written pages right? It may not have been fair to YOU specifically but trying to run a business long term while being constantly beset on all sides by dirty politics isn’t fair to him either. He decided to get into that business, you decided to wait until now to get into guns…. I think you’re BOTH a little crazy…lol.

      You may very well be one of the exceptions to those generalizations(and you have my condolences) but I’d wager the vast majority of panic buyers were not.

  39. avatarensitue says:

    The title is as atrocious as the “Article” The writer sounds like an embittered NE transplanted Progressive
    complaining about Florida’s summer heat, a real winner.
    I have been an avid follower of TTAG since it’s start but every time an outsider gets an ego stroking via the posting of a low quality submission it drags the site down and raises the value of other sites. That is lesson in economics as well.

  40. avatargun papa says:

    This panic was not my first rodeo. I have always bought between panics, in moderation. Those with poor foresight paid the price. I remember the ban, and used factory Glock mags for $160 each. After New Town, people followed the panicked heard, and needed a black rifle, and did not know why. It is was a case study if I ever saw one. A young man was telling me that he HAD to have an AR, HAD TO! He was ready to pay mad money for ANY black rifle. I felt obligated to explain to him that this was my third ban. I advised that he wait for things to cool down. It was sound advice.
    Some of what I saw was indeed price gouging. I have a long memory. Overnight, CNC Warrior raised Bulgarian waffle mags for $80 each. They must have been called on it by more than me, as they dropped prices back down. I listened to guys cry, and still do about pricing and lack of availability of .22lr. They ask me where I got mine, I explain, I got it all prior to December 2012.

  41. avatarLayne says:

    I’ve been standing around gun stores listening to people talk enough to know that the customer are, in fact, morons. The ones who aren’t morons are not speaking and as such would leave less of an impression on the store owner.

  42. avatarPW in KY says:

    Capitalism in action. Doesn’t bother me and my jimmies were not rustled.

  43. avatarBrett says:

    This guy is my hero…

  44. avatarGregolas says:

    This article should be reprinted and used in every basic economics class in every high school and college to explain how markets work. Wish I’d had this when I taught business law.
    Firearms Concierge, Good on ya Mate!

  45. avatarShawn says:

    “If I can order it and it is readily available, my markup is X.

    If I cannot order it (demand clears the shelves) and it is NOT readily available and I have it and everyone else does not, my markup is substantially more than X.”

    You did no extra work. Nothing, but raise the prices.” That is called price gouging. That is what scum do after a hurricane or any natural disaster. That is where people will not support you. They will wise up. That is why at one of LGSs are still sitting on $45 pmags. That is why CTD is going down the toilet…you are no better. You just wanted to take advantage of people and that is what the Government is doing. Frack you!!!

    • avatarShaunL says:

      Your rant sounds like the voice of someone who:
      1. Was unprepared and unfunded when this happened and
      2. Does not run a business of have any history of doing so.

      If he can’t get the materials(guns) to support his business long term he, like any other business owner, has to make MORE short term for his business to survive the drought. The electric, gas, water, taxes and all other monthly bills KEEP COMING regardless of whether he can get stock to sell that month. When you have no stock to sell you either prepared ahead of time or you go out of business.

      Simple economics.

    • avatarJim Barrett says:

      I can appreciate your feelings, especially if you are on the receiving end of a price gouge, but the point about a dry supply chain needs to be considered. Gun dealers (or any other seller) makes a living (you know, pays the rent, feeds the kids, etc.) by having a certain amount of income. In normal times, this income can be spread out over small markups on a large number of product sales. When tough times hit, you still need to bring home the total number of dollars as you did before, but now, you have a smaller number of products across which to spread the income. This means higher markups on a per-product basis.

      Let me give you an example. You need to make $10 a month in profit. You normally sell 10 widgets every month. What is the markup per widget you need to get? The answer of course is $1 per widget. Now, let’s say that supply drops and you can only procure 5 widgets per month from your supplier. You still need to make $10 per month, so what do you have to do to your markup? That’s right, double it to $2 per widget. You generally can do that because the market still wants to purchase 10 widgets, but only 5 are available, so customers fight over them and are willing to pay higher prices.

      Now, let’s say, that the widget supplier burns to the ground. They are going to be out of business for 5 months. No more widgets are going to be available for at least five months. You have five widgets left in stock, but remember that profits from these widgets have to pay your bills for the next five months until the widget manufacturer comes on line. What is your markup? Looks like $10 per widget to me, which is a 10-fold increase over what you used to charge.

      What complicates this very simple explanation is how badly the market needs those widgets. If it can wait five months for the widget manufacturer to come on line, then it may not be willing to pay the huge markup. On the other hand, if it needs those widgets now and can’t wait, it it more flexible on price. Finally, if there is fear that government regulation may make widgets illegal and no longer available, then the market will pay almost any price to obtain the few remaining widgets available.

      Unfortunately, this is where those with money will win and those without will lose. But that is the nature of capitalism.

    • avatarMatt in FL says:

      [Note: I didn't see Jim's explanation before I wrote this. His was just as good, and less sarcastic.]

      And he paid no extra rent (or other overhead) while waiting on that one item you ordered to come in, right? OH WAIT, HE DID. While during the same period a year ago he’d have sold 10?

      Let me break it down for you. We’ll use one item, one price, and one “bill.” The bill will be “rent” and it’s $1000. The item will be a gun, for which his wholesale cost is $1000, and he resells at, let’s say, $1050, for profit of $50. How many does he have to sell to pay the bill? Well, 1000 / 50 = 20. He has to sell 20 guns to pay the rent. If he charges $1100, then 1000 / 100 = 10. He has to sell 10 guns to pay the rent. Got the math on that?

      OK, now let’s throw a wrinkle into the system. BLAM! Kids get shot, guns go on the run. He has two guns left in stock (cost still $1000), and his supplier tells him he’s not going to see another gun for a month, and when he does, he’s only going to get two, and they’re going to cost him $1500. How much does he have to sell those last two guns for, to make sure he can pay his bills? Well, he has to make all the profit for the month on two guns, so 1000 / 2 = 500. He has to make $500 profit on each gun, so now each gun sells for $1500. But he also needs to make sure he’s covered for the cost of the more expensive guns next month, so he adds a little onto the existing guns to ensure that, and now, your gun that was $1100 yesterday is $1700 or $1800 overnight, and you’re screaming that he’s gouging. Do you get why that’s wrong? If you don’t, I can’t help you any more. One sale, one gun, one bill is as much as I can dumb it down.

      Oh wait. One more thing to factor in. That supplier, who called and said “two guns next month @ $1500″ didn’t actually say that. He called and said, “I have NFC when you’re going to see another rifle. There is NOTHING in the pipeline. Sorry.” Now how much do you charge? You don’t know if you’re going to have to pay one month’s bills, two? three? before you get a replenishment? So now what do you do? It’s OK if you don’t have an answer. Lots of small business owners didn’t either, and now they’re out of business.

      • I have to disagree with you on something, Matt:

        less sarcastic = less good

      • avatarLarry says:

        There’s a lot of discussion about how to decide what you “need” to charge, under one circumstance or another, which I do not see as relevant at all. Other inputs attempt to define what “gouging” is, with no one (so far as I could tell) pointing out that it is meaningless gibberish. The fact is that if you have a product which I want, in this country you should be able to charge absolutely any amount you wish for it, and I can take it or leave it, whether it’s an NFA firearm or a gallon of gas. Anything else invites intervention by the gub’t, a formula for disaster.

        This is the method which will work, including automatic rationing when necessary. An example completely removed from current emotions comes from years ago when my family was passing through CA and decided to spend the day at Yosemite. We were in line for around 3 hours before we gave up without ever entering the park, and the huge majority of vehicles in line with us were from CA, probably spent every weekend there, at $5 a carload or whatever. I thought how nice it would be if they raised the entry fee to $100, after which someone like us, with one chance in 50 years to see the place, could actually get in! Gouging? Hell, yes. Limited resources call for variable prices.

        And anybody who buys 5000 rds of ammo at a time should be reloading instead.

  46. avatarShaunL says:

    I’ll just start with the assumption that most people commenting on here were somewhat prepared already….. I’d like to point out the warm fuzzy feeling I got when buddies who bought AFTER the election/Lanza told me about the “great deal” they got on rifles, ammo and gear I paid HALF as much for months earlier. These are the same guys I’ve harped on for years to get a$$ in gear and stock up. They’re also the same guys I regularly say no(or hell no) to when they come begging to buy X,Y OR Z from me that they can’t find on the shelves because they waited too long.

    I sometimes find it hard to believe when people are caught off guard by events like this but in a condition white(or clear) world I guess it should be considered “normal”.

  47. avatarJim Barrett says:

    While I’ve always understood the basic “raise prices when demand is high and supply low” thing, I never really appreciated one of the reasons you stated for doing it. You are right – if your supply has been cut off, you need to make enough money on what you do have in stock to sustain you until the supply pipeline opens up again. Makes perfect sense to me. On top of that, people should no longer be surprised about price shocks. They are going to happen when expected (election cycles) and they are going to happen when something really bad happens (Newtown). Buy what you want when it is available and stock it for when it isn’t. Hint – We have a Congressional election next year. There will probably be some increase in demand, especially if the Dems look to retain control of the Senate and/or gain control of the House. Buy stuff in the spring and beat the rush.

    • avatarpat says:

      With the current poop-storm that is the AHA I don’t think loosing the House is in the cards. Of course…wouldn’t be shocked either.

  48. avatarErrantVenture11 says:

    FC, if you ever want to get out of the firearms business I’m sure we have a cold chair here for you to warm in our commercial department. You would make one hell of an account manager / director…

  49. avatarChuck in IL says:

    Alternate title: “Economics 101″

  50. avatarpat says:

    I fortunately had all the guns I really wanted when Sandy Hook went down. Well, not ALL the guns I wanted, but the ones I wanted and didn’t have were already out of my price range before they doubled and trippled in price.

    Feeding my guns after Sandy Hook…now THAT was difficult.

  51. It’s amazing to me that, even after the basic economics lesson, people still don’t get it. The expression “price gouging” should be banned from the English language. I’m pretty sure it was invented by politicians so they could do what they always do—appeal to the ignorant voter using emotion simply to get re-elected.

    Everyone in America—especially politicians—should read “Basic Economics” by Thomas Sowell.

    • avatarHKfan says:

      I do find it utterly hilarious when supposed conservative free market mastermen complain about retailers like CTD who decide to raise prices. Teatards and Freepers alike seem to believe capitalism and the free market should apply to everything and I do mean everything, but somehow gun sales should be exempt. They’re a bright bunch.

  52. avatarJay says:

    Good look at the goings-on in the industry, enjoyed the article and looking forward to part 2. From a prep standpoint, I have had only one issue and that’s .22lr ammo. I have to admit that I never thought that there’d be a day I couldn’t buy as much of the stuff as I could carry (and I did buy a lot but used it weekly at indoor matches, etc…just caught short when Sandy Hook happened).

  53. avatarjimmyjames says:

    I was a boy scout and remembered the motto, be prepared. I was prepared. The last year was nothing more than frustrating to me at the worst and profitable at the best. Something is alwaysonly worth what someone else is willing to pay for it. But goughing is goughing. The chickens have come home to roost. LGS here has PMAGS he paid too much for stacked to the ceiling because no one will pay $14 for them and he just got about 10k of tbem a month ago. Timing is everything. I havent seen any LGS’s go out of business this gear but I expect to see some go out of business next year. The madness is and was unsustainable.

  54. avataranonymous says:

    I heard CTD (cheaperthandirt) commercials (read aloud by reporter) on KOMO1000/97.7FM…whoa…that is the full medaled commie station with red phone to White House, someone might want to tell CTD about them-money is money, but I doubt their listenership is going to buy from CTD. The woman reading the commercial sound like she just stepped on a dog turd or swallowed something rotten.
    Then this morning heard it read on the slightly conservative 770KTTH station…

    I don’t blame you for any capitalist notions, and taking a “hard line” but the issue is creating division and ill will, which the Left thrives at.

    Ammo still hasn’t recovered: a real success for the Left. So, I’m coming up with alternatives…discussion for a later date.

    “HKfan
    seem to believe capitalism and the free market should apply to everything and I do mean everything, but somehow gun sales should be exempt.”

    the most highly gov’t regulated industry in existence, without equal [including nuclear materials]…with said gov’t destroying military brass stocks, banning importation of arms and ammo, banning re-entry of antique guns, hazmat regs redefined to drive prices up, gun sales attacked, specific gun parts attacked, gun websites attacked, gun shows attacked, gun owners info released to public, 24/7 media hounding the 2A…24/7….

    we need to be exempt from all of this, causing 200-300% overcharges all day long-don’t pretend we’re not singled out and run of the mill, like all else and w/o exception… Saiga shotguns were under $200 when they first came on the market, now maybe $700 if you can find. Romanian AKs were $300, I overpaid at $350 and now about $550 if available..My state extended sales tax (9.5%) to firearms around 2008. DIY and black market is the future of this scenario.

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