Kynoch
member
I have long wondered about today's ridiculously high price of guns compared to say the latest golf club or power tool? The canned and axiomatic response "supply and demand" really doesn't do much to explain why guns are so expensive. After thinking about it a while, I am rather amazed at the number of factors that impact the price of guns. While I'm sure there's more here is my list:
* Gun making is historically a "feast or famine" business that keeps manufacturers (and their bankers) rightfully wary about increasing production capacity during high demand periods.
* Limitations on importing certain types of guns which impacts competition.
* Limitations on importing guns from certain countries which impacts competition.
* The cost of liability insurance.
* Government requirements can materially increase the purchase price of a gun.
* Gun making is a non-PC business that keeps other sporting goods companies from getting into the business which also impacts competition.
* Business credit to gun makers is now tightening-up due to this non-PC image. This may well increase their cost of capital.
* Fund managers and other investment holders have begun to prohibit firearms stocks as part of their portfolios which will no doubt impact stock prices.
* Unlike power tools and computers, guns don't wear out for the most part. Imagine trying to build a strategic 5 year model for a product that doesn't wear out and whose sales demand is largely drive by emotions? You might well be tempted to limit investment, impacting boom-times like today.
* Gun making is historically a "feast or famine" business that keeps manufacturers (and their bankers) rightfully wary about increasing production capacity during high demand periods.
* Limitations on importing certain types of guns which impacts competition.
* Limitations on importing guns from certain countries which impacts competition.
* The cost of liability insurance.
* Government requirements can materially increase the purchase price of a gun.
* Gun making is a non-PC business that keeps other sporting goods companies from getting into the business which also impacts competition.
* Business credit to gun makers is now tightening-up due to this non-PC image. This may well increase their cost of capital.
* Fund managers and other investment holders have begun to prohibit firearms stocks as part of their portfolios which will no doubt impact stock prices.
* Unlike power tools and computers, guns don't wear out for the most part. Imagine trying to build a strategic 5 year model for a product that doesn't wear out and whose sales demand is largely drive by emotions? You might well be tempted to limit investment, impacting boom-times like today.