when does it become "gouging" vs supply & demand?

[68Charger]

Saw this in an ad, and now I've pulled out the soap box:

It is NOT gouging if an auction has bid up to a point that you personally think is high.

That my friend is supply and demand.

First off, my hats off to Stoneheart who lowered his price, rather than just listing his primers on GB where he maybe could have gotten the original price he was looking for- I realized that continuing this argument in his sale thread may do him a disservice, so as a courtesy I moved it to a new thread in this topic..

I keep seeing this defense (supply & demand) for charging 2-10x as much as you paid for an item...

I understand the idea of a free market economy- supply & demand determine price... so do you let a man die in the desert because he can't afford to pay the $100 that you're asking for the last bottle of water?

Factors that are not considered part of the "supply & demand" equation include concepts of:

1) "Price fixing" where all the suppliers of a commodity agree to raise their price -together- so none of that commodity are available at a lower price... in a true free market, this is only temporary- unless the commodity has a regulatory factor (the gov't has outlawed any other suppliers).. which leads to:

2) "regulatory" basically any government or authority control on the price of a commodity. By requiring that all ammo manufacturers be 06 FFL holders, then you've affected the price, because in a pure supply & demand economy, there's competition to drive the price down- and you've regulated "the little guy" out of the picture...

3) "Market manipulation"- this includes a number of tactics, including fear mongering, rumors (of bans, taxes, etc on the item), bashing of competition, "cornering" the market, etc... This I believe is the biggest problem with the firearms industry today- many dealers, suppliers & owners participate in it... there are enough people buying more ammo & supplies than they need, either to cache it away (nothing wrong with that, but it affects market price) or to sell it in another market at a profit... that is where gouging comes in...

if ONE group, company or person were to go and buy every single round of ammo in the state of Colorado, then demand 2-3x the price they paid for it "just because they can"- does that make it right?

what we're seeing too much of lately is this going on in a larger, unorganized scale...
Individuals buy any primers, ammo, magazines or other accessories that they see available, knowing they can profit from them... enough individuals do this, and it has the same effect on the market as if one entity "cornered" the market...

it's usually a temporary bubble that will eventually burst... when the fear & rumors die down- or the supply is increased to the point that there's not enough capital available for the market to be "cornered" anymore... but if regulatory or price fixing issues come into the picture, then it can be sustained longer...

these principles apply to many more items than just firearms & ammunition... anyone remember the "cabbage patch kids" craze? or the more recent Xbox/Playstation shortages?

particpating in the practice of buying these items when you see them available, then selling them at a profit- makes you part of the problem, IMHO....
there's risk involved with these practices... if you're holding onto 250,000 primers that you paid $40/1000 for, hoping to get $70/1000 for them... and the bubble bursts- and supply is then greater than demand, and the price drops to $20/1000.... well, you get the picture...
but for the most part, it's "opportunistic profiteering"
it may be within your rights to do it, but I'm within my rights to scorn you for it as well...

>rant off<

[ryanek9freak]

I agree 110%. It's rediculous that people are doing this, and it's affecting my shooting hobby tremendously. It infuriates me to have to pay .50 cents a round for .223 ammo, if I can even find it.

Never in my life have I had to ration my ammo. I think this is a conspiracy by the administration. They anticipated this would happen, and are all now probably dancing, because normal folks have limited access to what they need.

[Irving]

I don't understand the point of your supposed "rant" here. Are you a fledgling economics student, looking to test out your knowledge with a real world example?

I only call your "rant" into question, because it's not really a rant. You are just pointing out what is happening. I actually HOPE that people are buying up everything, trying to sell it. Your example of buying at $40/1000, hoping to sell at $70/1000, but in reality, being forced to sell at $20/1000 IS going to happen, it's just a matter of time. You bring up great points about how the government influence on manufacturing helps to elongate this whole mess.

Back when I played World of Warcraft, I decided to try this very thing you are talking about. I would go to the auction house, and buy up ALL of one commodity that I could (I think it was some cloth). Then, I would put it back on the auction for more money. I tried to control the market all by myself. The problem was that I was only ONE guy, there were thousands on the server, and I didn't want to, nor could I, hang around at the auction house all day. The other issue, was that there were few restictions to obtain the cloth, so there was no realistic way to control the market. While I was sleeping, people would sell the same thing for WAY less than what I would put it up for, and there was nothing I could do about it. Plus, no one was willing to pay my price, so I was eventually forced to sell at a huge loss.

This IS what is going to happen in the firearms and ammo market, it is only a matter of time. Look around you, and all you see is people bitching about prices. People don't want to pay it, so they won't.

[68Charger]

This IS what is going to happen in the firearms and ammo market, it is only a matter of time. Look around you, and all you see is people bitching about prices. People don't want to pay it, so they won't.

I wish that's all I saw... but I see some grumbling & paying it... which supports the higher prices...partially because they believe rumors of bans or 500% taxes on ammo...
if people stopped paying it, then the market price would have a "correction"...

[M2MG]

Saw this in an ad, and now I've pulled out the soap box:




First off, my hats off to Stoneheart who lowered his price, rather than just listing his primers on GB where he maybe could have gotten the original price he was looking for- I realized that continuing this argument in his sale thread may do him a disservice, so as a courtesy I moved it to a new thread in this topic..

I keep seeing this defense (supply & demand) for charging 2-10x as much as you paid for an item...

I understand the idea of a free market economy- supply & demand determine price... so do you let a man die in the desert because he can't afford to pay the $100 that you're asking for the last bottle of water?

Factors that are not considered part of the "supply & demand" equation include concepts of:

1) "Price fixing" where all the suppliers of a commodity agree to raise their price -together- so none of that commodity are available at a lower price... in a true free market, this is only temporary- unless the commodity has a regulatory factor (the gov't has outlawed any other suppliers).. which leads to:

2) "regulatory" basically any government or authority control on the price of a commodity. By requiring that all ammo manufacturers be 06 FFL holders, then you've affected the price, because in a pure supply & demand economy, there's competition to drive the price down- and you've regulated "the little guy" out of the picture...

3) "Market manipulation"- this includes a number of tactics, including fear mongering, rumors (of bans, taxes, etc on the item), bashing of competition, "cornering" the market, etc... This I believe is the biggest problem with the firearms industry today- many dealers, suppliers & owners participate in it... there are enough people buying more ammo & supplies than they need, either to cache it away (nothing wrong with that, but it affects market price) or to sell it in another market at a profit... that is where gouging comes in...

if ONE group, company or person were to go and buy every single round of ammo in the state of Colorado, then demand 2-3x the price they paid for it "just because they can"- does that make it right?

what we're seeing too much of lately is this going on in a larger, unorganized scale...
Individuals buy any primers, ammo, magazines or other accessories that they see available, knowing they can profit from them... enough individuals do this, and it has the same effect on the market as if one entity "cornered" the market...

it's usually a temporary bubble that will eventually burst... when the fear & rumors die down- or the supply is increased to the point that there's not enough capital available for the market to be "cornered" anymore... but if regulatory or price fixing issues come into the picture, then it can be sustained longer...

these principles apply to many more items than just firearms & ammunition... anyone remember the "cabbage patch kids" craze? or the more recent Xbox/Playstation shortages?

particpating in the practice of buying these items when you see them available, then selling them at a profit- makes you part of the problem, IMHO....
there's risk involved with these practices... if you're holding onto 250,000 primers that you paid $40/1000 for, hoping to get $70/1000 for them... and the bubble bursts- and supply is then greater than demand, and the price drops to $20/1000.... well, you get the picture...
but for the most part, it's "opportunistic profiteering"
it may be within your rights to do it, but I'm within my rights to scorn you for it as well...

>rant off<

A few questions for you. When does poor planning on your part, cause an emergency on my part? Quite simply, NEVER. You don't have ammo, to bad. You don't like someone's price, don't buy it and go find it cheaper some place else. You can't find it some place else cheaper, you should have planned better when you could have.

What you have is the mindset of a LIBERAL. Someone else takes a risk and buys a quantity of a product to sell for a profit, and you're mad that you have to pay the profit.

When was the last time your boss came to you and asked you to pay back some of your wages because a product he bought didn't make a profit and he had to sell it at a loss? If this happened to you, you would probably quit your job, or file a law suit, or walk a picket line in front of the business. But you think nothing of demanding others do this for you.

Go try to buy a house from someone and tell them you want the same price they paid for the house twenty years ago, "because it's only fair you get the same price as they did".

The next time you buy a pack of cigarettes, or a case of beer, or go out to dinner or whatever you spend your money on. someone else used their same disposable money and bought the ammo you're crying about not having.

You want something, save for it, sacrifice for it, work for it, but don't complain that others have planned for it while you didn't, it's YOUR responsibility, not theirs/ours. GROW UP.

M2MG

[sniper7]

the only time I really feel it is gouging is when the exact same item if for sale at a much lower price and it is available. (like the guy trying to sell the AMD for $900 when they are $549 and in stock at AIM surplus.)

other than that, I really don't care. For those that were fortunate enough to go and get the items and the lower prices and then found the people that would pay the higher price, good for them. in the end the buyer gets what they want, the seller gets what they want and everyone is happy.

Eventually, it will come down. I am guessing not for a while, but if you go to cogunmarket, here, ar15.com, you will see more and more things starting to be available. not so much on the ammo part, but on the gun side, I am seeing a lot more ARs available and the prices have come down a tad. they have yet to tank, but eventually, they will drop down to more reasonable levels.

at that time, with all the money the sellers made off the things they sold, they will be able to buy more for less.

[Irving]

68Charger is not complaining about legitimate business, he's complaining about a bunch of people buying up a product, thinking that they can resell it for profit. Such is not the case. All these yahoos have the same idea, but they're all going to lose big money in the end. People think they can buy up stuff, and they'll be the only ones with the idea and have no competition. I don't mind waiting for the bubble to burst and dipshits to unload their ammo at reasonable prices.

Using a house is a terrible (at best) example because land is fixed and depleting. Houses generally increase in value, while virtually every other commodity in the world goes down in value. It is PERFECTLY reasonable to expect to pay USED prices for USED goods.

Also, this has nothing to do with being prepared. Ammo is like gasoline, electricity, or water. Sure, you can buy some ahead of time while prices are low, but it generally doesn't work that way. Would you tell people that they were "unprepared" when the cost of natural gas goes up? "Too bad you're stupid and didn't stock up on natural gas back in the 80's when it was so cheap." Sure, ammo can be stored more easily than natural gas, but in general it is a commodity that is consumed on an "as needed" basis. Calling people "unprepared" when they are legitimately complaining about paying more than something is worth is just down right stupid.

[Graves]

What you have is the mindset of a LIBERAL. Someone else takes a risk and buys a quantity of a product to sell for a profit, and you're mad that you have to pay the profit.

There are a few of us who actually have no problem finding reasonable prices on these "Hard to Find" products and when we see these prices we cant help to say WTF?!!?! I guess that's why it doesn't make me "mad" enough to make a whole new thread to vent on the issue.

68Charger, I totally understand where youre coming from on this. I wouldn't worry about what the sheeple have to say on the issue, if they have no problem bending on over for a box of ammo, or AR parts because they NEED it right then and there, then hey to each their own. I'll keep my own pockets lined by not falling into that and just spend a little extra time finding what I want.

[Graves]

the only time I really feel it is gouging is when the exact same item if for sale at a much lower price and it is available. (like the guy trying to sell the AMD for $900 when they are $549 and in stock at AIM surplus.)

I think this is what he's getting at, too much of this going on. To me it's funny when you personally know where to find the item for much less than the sellers asking price at the time, it is a bit disheartening, and somewhat hard to keep your comments to yourself. Kind of like when you spend $9 and change per box of 50 on BB 9mm and stroll next door to see another retailer (you guys know who Im talking about) selling the steel cased version (generally cheaper) for almost double<---you cant help but to say WTF?

[ryanek9freak]

I'm not so necessarily concerned about the price, as I am availability. It does suck that every time I fire my AR, I piss away .25-.50 cents, but at the moment, I need to practice badly, so i wouldn't mind paying that, If I could at least find a decent quantity.