Guns and the Supply Chain

Posted: December 21, 2012 by ShortTimer in Economic freedom, Economics, Guns

Very interesting article here on The Truth About Guns:

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.

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.

Boom and bust all at once.

Currently, $10 PMAGs are going for as much as $100 in the open market.  Note there are bids that drove those 5 mags from $.01 to $515.  That’s the market.

$515 pmags

  1. […] this, though some business types are late to the party, as Legal Insurrection notes.  It’s week-old news, but the pictures get the point […]

  2. […] looked at how gun and ammo sales have gone up beyond belief, clearing out stores, warehouses, distributors, and manufacturers.  Some folks are late to the crowd (including this report that claims stores were selling […]

  3. […] yesterday – Sunday the 27th.  Just another example of gun ban economics and what we’ve already been […]

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