Why Are Guns So Expensive?

[powell&hyde]

Very interesting thread, I went and dug out receipts for 3 guns I purchased New in 1973 and 1 was a Rem M700 bdl in 30/06 for $188.00. A Rem M870 12g Wingmaster shotgun for $175.00 and a Marlin Zane Grey century 30/30 for $160.00.

They no longer make the adl or bdl but do make a cdl and the manufacturers suggested retail price is over $1000. http://www.remington.com/products/firearms/centerfire/model-700/model-700-cdl-dm.aspx

I think the answer is demand and all manufactures of any product know this.

 

[X-Rap]

I remember pop out of a machine being a dime yet this weekend I saw it for a buck fifty. Gas was 30 cents and now it hovers near $4, there is plenty of things that have more than tripled and some things have gone the other way.
Anybody remember what color TVs cost in the late 60's early 70's compared to the quality and size of todays, calculators, music devises, computers, cameras all are considerably better in quality and value today.

 

[Gtimothy]

Guns are expensive because WE make them expensive!

It's basic economics...The price reflects what the market will bear. If I precieve that the value of a gun priced at $500.00 is worth MORE than $500.00, I will buy it because I feel that I am getting a good deal. If on the other hand I feel a gun is not worth $500.00 I won't buy. If nobody wanted to pay $500.00 for a gun, the price would go down until people felt the price reflected what they felt the gun was worth.

The beauty is, companies are in business to make money! If they price their product too high, they wind up sitting on it. If their marketing department does its job correctly, they price to make money and still have people wanting their product.

 

[Certaindeaf]

I remember pop out of a machine being a dime yet this weekend I saw it for a buck fifty..

When I was a punk kid on Oahu in '74, I remember the 12oz cans being one dollar.

 

[Certaindeaf]

.Anybody remember what color TVs cost in the late 60's early 70's compared to the quality and size of todays, calculators, music devises, computers, cameras all are considerably better in quality and value today.

Yes, I remember a full page advert on the back of a monkey wards or something catalogue pimping a four function (!) calculator "as thin as a nickel!".. comparing the 3/4" height against the coin. $500.
Now, (except for CA) you can get a scientific calculator in your happy meal for free. sweet times

 

[jrdolall]

Malarkey. The prices of most guns has risen far more than the last 20 years than other US-made durable goods

It looks like you are taking a couple of convenient examples and using them to illustrate your point, collusion, while ignoring very valid examples because they refute your point.

Guns are durable goods but they are also a collectable item so they fall into some different categories. The price of many durable goods has gone up 2-3x over the same time period. Cars have doubled. Appliances have doubled and tripled. There have been marked improvement in these items but there have also been marked improvemnet in firearms. Get a price on a 1966 Mustang Convertible. Durable good that is also collected. In 1991 I bought a top of the line cell phone for $199 with no contract. Today a top of the line cell phone is $700 with no contract.

I wonder what the cost is on a rifle carried in combat by a US soldier. What was the cost of that rifle in 1982? I guarantee it was a lot cheaper but, of course, it is a very different weapon today. Guns used in combat are not purchased for their collectibility but for their usefulness. SnapOn tools are not purchased for collections but for usefulness. Prices on tools that are being USED daily are very different from prices on items that are sold for hobbies. The vast majority of guns sold in the USA are for hobbiests, not every day use and they are purchased with disposable income. They are not necessities. They are desires and companies can charge more for desires.

Is it possible that the industries you use were doing so much price gouging 20 years ago that they could take a huge hit to their margin and still be viable. Did Snap-On have a 450% margin in 1990 and now they struggle with a 150% margin. Don't laugh! It happened to the American furniture makers.

As long as people are willing to pay more for a name brand then that brand will charge what they can. Do the CEO's of the major gun companies have secret meetings to determine their prices going forward? No they don't. Do they talk on the golf course about the cost of doing business and the direction they are looking? I bet they do. Do they have marketing departments that know what the competition is doing every single day? You bet they do. If Ruger dropped the price on their guns and kept it low then the other guys would lower theirs in order to stay competitive or they would lose market share and that is absolutely unacceptable, especially to a public company.

It is easy to shout "conspiracy" or "collusion" when companies in competitive businesses are similarly priced but those terms require that the people at the companies are working together to keep prices elevated. Is it collusion if the owner of an LGS checks prices at Walmart and lowers his price to be competitive? Why is milk the same price in most stores unless it is on sale? It seems to me that your collusion theory is more likely to be a result of quality market research by the companies. Do Coke and Pepsi work together to determine their prices? Bud and Coors? Okay so those two are not American companies but their prices are usually in line with each other.

 

[Kynoch]

I honestly think the bottom will fall out of the gun market once people realize they already have more than enough guns to last them the rest of their life (and they don't have any money to keep feeding their hording habit).

One thing I've noticed is that prices on Swedish Mausers seem to have stagnated. K31s haven't gone up as quick as I thought they would.

The market pretty much has to saturate given the current sales rate. It will be fascinating to see how manufacturers handle production as the demand decreases.

Will they try to retain the semblance of running full-out with shortages, etc?

Will they begin to try eating each other's lunches?

 

[Kynoch]

When I was a punk kid on Oahu in '74, I remember the 12oz cans being one dollar.

They were a buck in Saucalito, CA in ~1980.

 

[Kynoch]

Guns are expensive because WE make them expensive!

It's basic economics...The price reflects what the market will bear. If I precieve that the value of a gun priced at $500.00 is worth MORE than $500.00, I will buy it because I feel that I am getting a good deal. If on the other hand I feel a gun is not worth $500.00 I won't buy. If nobody wanted to pay $500.00 for a gun, the price would go down until people felt the price reflected what they felt the gun was worth.

The beauty is, companies are in business to make money! If they price their product too high, they wind up sitting on it. If their marketing department does its job correctly, they price to make money and still have people wanting their product.

You're pointing out the obvious, now let's drill down. WHY do gunbuyers pay 2-3x what a Ruger MKII cost 20 years ago? I don't think it's due to personal security concerns.

 

[Kynoch]

I remember pop out of a machine being a dime yet this weekend I saw it for a buck fifty. Gas was 30 cents and now it hovers near $4, there is plenty of things that have more than tripled and some things have gone the other way.
Anybody remember what color TVs cost in the late 60's early 70's compared to the quality and size of todays, calculators, music devises, computers, cameras all are considerably better in quality and value today.

Snap-On Tools have not doubled or tripled in price in the past 20 years. Leopold Optics have not doubled or tripled in price in the past 20 years. Glock firearms have not doubled or tripled in price in the past 20 years. Leatherman Tools have not doubled or tripled in price in the past 20 years. All durable goods made in the USA.

Yet Ruger and S&W revolvers have doubled or tripled in price in the past 20 years. Are they restraining production? Is there simply really no competition? This is an interesting subject that is by no means simple.

 

[joecil]

I'm actually in business (self storage facility) and we compete with all of them in my area about a 10 mile range. We do regular quarterly competition reports and try to keep our prices about middle of the pact. It is the natural way most businesses with competition operate and one raises prices to the highest point the market will pay. The same with most items if you don't buy prices soon drop or the company folds if they can't cover their costs at those prices. Oh the actual job creators aren't the people with the most money to invest it is those with the willingness to spend it on goods and services.

 

[Kynoch]

Very interesting thread, I went and dug out receipts for 3 guns I purchased New in 1973 and 1 was a Rem M700 bdl in 30/06 for $188.00. A Rem M870 12g Wingmaster shotgun for $175.00 and a Marlin Zane Grey century 30/30 for $160.00.

They no longer make the adl or bdl but do make a cdl and the manufacturers suggested retail price is over $1000. http://www.remington.com/products/firearms/centerfire/model-700/model-700-cdl-dm.aspx

I think the answer is demand and all manufactures of any product know this.

OK, I'll buy "demand."

So why haven't Remington's competitors (or other sporting goods companies) went after the business if demand is driving the prices up, up and up?

 

[Certaindeaf]

It looks like you are taking a couple of convenient examples and using them to illustrate your point, collusion, while ignoring very valid examples because they refute your point.

Guns are durable goods but they are also a collectable item so they fall into some different categories. The price of many durable goods has gone up 2-3x over the same time period. Cars have doubled. Appliances have doubled and tripled. There have been marked improvement in these items but there have also been marked improvemnet in firearms. Get a price on a 1966 Mustang Convertible. Durable good that is also collected. In 1991 I bought a top of the line cell phone for $199 with no contract. Today a top of the line cell phone is $700 with no contract.

I wonder what the cost is on a rifle carried in combat by a US soldier. What was the cost of that rifle in 1982? I guarantee it was a lot cheaper but, of course, it is a very different weapon today. Guns used in combat are not purchased for their collectibility but for their usefulness. SnapOn tools are not purchased for collections but for usefulness. Prices on tools that are being USED daily are very different from prices on items that are sold for hobbies. The vast majority of guns sold in the USA are for hobbiests, not every day use and they are purchased with disposable income. They are not necessities. They are desires and companies can charge more for desires.

Is it possible that the industries you use were doing so much price gouging 20 years ago that they could take a huge hit to their margin and still be viable. Did Snap-On have a 450% margin in 1990 and now they struggle with a 150% margin. Don't laugh! It happened to the American furniture makers.

As long as people are willing to pay more for a name brand then that brand will charge what they can. Do the CEO's of the major gun companies have secret meetings to determine their prices going forward? No they don't. Do they talk on the golf course about the cost of doing business and the direction they are looking? I bet they do. Do they have marketing departments that know what the competition is doing every single day? You bet they do. If Ruger dropped the price on their guns and kept it low then the other guys would lower theirs in order to stay competitive or they would lose market share and that is absolutely unacceptable, especially to a public company.

It is easy to shout "conspiracy" or "collusion" when companies in competitive businesses are similarly priced but those terms require that the people at the companies are working together to keep prices elevated. Is it collusion if the owner of an LGS checks prices at Walmart and lowers his price to be competitive? Why is milk the same price in most stores unless it is on sale? It seems to me that your collusion theory is more likely to be a result of quality market research by the companies. Do Coke and Pepsi work together to determine their prices? Bud and Coors? Okay so those two are not American companies but their prices are usually in line with each other.

Who/what were you responding to? I don't think that quote worked so well

 

[Kynoch]

It looks like you are taking a couple of convenient examples and using them to illustrate your point, collusion, while ignoring very valid examples because they refute your point.

What very valid examples? Snap-On Tools, Leopold optics, Glock firearms, Leatherman tools and Ping gold clubs are not real world examples? They are all American-made durable goods.

Guns are durable goods but they are also a collectable item so they fall into some different categories. The price of many durable goods has gone up 2-3x over the same time period. Cars have doubled. Appliances have doubled and tripled. There have been marked improvement in these items but there have also been marked improvemnet in firearms. Get a price on a 1966 Mustang Convertible. Durable good that is also collected. In 1991 I bought a top of the line cell phone for $199 with no contract. Today a top of the line cell phone is $700 with no contract.

Hold the phone one moment. Cars, appliances and many other things have changed greatly in the past 20 years. Billions has been spent on consumer product R&D. A S&W Model 29 and a Ruger Redhawk are pretty much the same guns they were 20 years ago (actually cost reduced in some cases), requiring zero R&D yet they now sell for 2-3x what they did 20 years ago.

I wonder what the cost is on a rifle carried in combat by a US soldier. What was the cost of that rifle in 1982? I guarantee it was a lot cheaper but, of course, it is a very different weapon today. Guns used in combat are not purchased for their collectibility but for their usefulness. SnapOn tools are not purchased for collections but for usefulness. Prices on tools that are being USED daily are very different from prices on items that are sold for hobbies. The vast majority of guns sold in the USA are for hobbiests, not every day use and they are purchased with disposable income. They are not necessities. They are desires and companies can charge more for desires.

What the hell does that have to do with the price of weak beer in Mexico?

Is it possible that the industries you use were doing so much price gouging 20 years ago that they could take a huge hit to their margin and still be viable. Did Snap-On have a 450% margin in 1990 and now they struggle with a 150% margin. Don't laugh! It happened to the American furniture makers.

I don't know. My examples were fairly far reaching. I do suspect that Glock's margins were and are astronomical yet they offer great value. I think because of Glock's presence, they competitors aren't getting away with charging 1,200+ for a 9mm semi-auto pistol. I'm just not sure why S&W doesn't go after Ruger's revolver business (or the reverese) if it has become so lucrative?

As long as people are willing to pay more for a name brand then that brand will charge what they can. Do the CEO's of the major gun companies have secret meetings to determine their prices going forward? No they don't. Do they talk on the golf course about the cost of doing business and the direction they are looking? I bet they do. Do they have marketing departments that know what the competition is doing every single day? You bet they do. If Ruger dropped the price on their guns and kept it low then the other guys would lower theirs in order to stay competitive or they would lose market share and that is absolutely unacceptable, especially to a public company.

You have no idea if they collude or not. Nor do I. I suspect not many gun company executives play golf after Bill Ruger's feelings about the game. If they did. those chats on the course alone would be highly illegal. Losing market share need not be "absolutely unacceptable." Profits and sustainability are the main goals -- not market share.

It is easy to shout "conspiracy" or "collusion" when companies in competitive businesses are similarly priced but those terms require that the people at the companies are working together to keep prices elevated. Is it collusion if the owner of an LGS checks prices at Walmart and lowers his price to be competitive? Why is milk the same price in most stores unless it is on sale? It seems to me that your collusion theory is more likely to be a result of quality market research by the companies. Do Coke and Pepsi work together to determine their prices? Bud and Coors? Okay so those two are not American companies but their prices are usually in line with each other.

Why are you getting in such a twist? SOMETHING is driving the prices through the roof. I don't for a minute discount the increase in demand. It's the supply side I question.

Hmmm...

 

[X-Rap]

Snap-On Tools have not doubled or tripled in price in the past 20 years. Leopold Optics have not doubled or tripled in price in the past 20 years. Glock firearms have not doubled or tripled in price in the past 20 years. Leatherman Tools have not doubled or tripled in price in the past 20 years. All durable goods made in the USA.

All those examples were over priced when they came on the market either because of their exceptional quality or their uniqueness to the market.
I gave my reasons back some posts ago and stand by them. The American appetite for guns is and will always be strong so long as we can still have them but we live under a constant black cloud that tells of a coming storm in which we won't have that ability to buy what we want.
If we lived pre 68 or 38 GCA and didn't have threats to our 2A rights both foreign and domestic the prices would be much different as would the variety. I'm guessing it would be less of an increase than your Snap On Tool. If they ever try to outlaw ratchets you can expect the price to jump considerably.

 

[Kynoch]

All those examples were over priced when they came on the market either because of their exceptional quality or their uniqueness to the market.
I gave my reasons back some posts ago and stand by them. The American appetite for guns is and will always be strong so long as we can still have them but we live under a constant black cloud that tells of a coming storm in which we won't have that ability to buy what we want.
If we lived pre 68 or 38 GCA and didn't have threats to our 2A rights both foreign and domestic the prices would be much different as would the variety. I'm guessing it would be less of an increase than your Snap On Tool. If they ever try to outlaw ratchets you can expect the price to jump considerably.

Today's prices are hardly a product of the GCA. Snap-On is an excellent example. So is Leopold, Leatherman, Ping and Glock.

 

[Shear_stress]

Malarkey. The prices of most guns has risen far more than the last 20 years than other US-made durable goods.

This thread is a clear example of what happens when opinions exist in the absence of data.

I can't speak for other US-made durable goods, but here are concrete examples of actual prices differences between 1984 (the date of the most recent Shooter's Bible I have) and 2012. I've tried to find some examples of common, substantially similar firearms between the two years.

1. Ruger Standard Model Auto pistol:
MSRP, Mark II, 1984: $168 = $371 (2012$)
MSRP, Mark III, 2012: $379 (2012$)

Price increase in real dollars: 2.2%

2. Beretta 92-series 9mm pistol:
MSRP, 92S, 1984: $515 = $1137.45 (2012$)
MSRP, 92FS, 2012: $650

Price increase in real dollars: -43%

3. Colt Single Action Army .357:
MSRP, 1984: $620.50 = $1370.46 (2012$)
MSRP, 2012: $1390

Price increase in real dollars: 1.4%

4. Remington 700 BDL:
MSRP, 1984: $446.95 = $987.15 (2012$)
MSRP, 2012: $985

Price increase in real dollars: -0.2%

----------------------------------------------

So, what are we bitching about again?

 

[Kynoch]

Having thought about this a while I will render these opinions.

First, there is absolutely no question that gun prices have risen far more in price than most other durable goods over the past 20 years and especially the last 10 years. Suggesting otherwise is simply wrong.

Ultimately price is set by supply and demand. There is no getting around that. Let's look at both sides of that.

First, there is the limitations if imports based on the GCA. While that alone cannot explain the price of firearms today it does play a part, especially when mixed with other factors.

On the supply side, guns are a "dirty business" to much of the population in the USA. There would be some real ramifications if "mainline" sporting goods companies got into the business of making and selling guns. Just imagine Nike selling guns based on the demand and pricing of today. The Nike model would have them being cranked out by a contractor in Haiti and sold under the Nike name which is of course is precluded by the GCA.

Gun sales have also historically been highly cyclical. It's long been a "feast or famine" business, largely because of changing military demands. I think the chiefs of the big gunmakers are preparing for an eventual slow-down even if it's simply via market saturation. That's what keeps them from adding massive new capacity -- they see an eventual slowdown.

There really is limited competition. Compare buying a single action revolver to golf clubs. So the potential for collusion is quite high.

On the demand side, particularly in today's market, purchasing is driven largely by emotion it seems and not by logic. People really do feel they are going to lose their RKBA and many are responding by filling their closets with arms and ammo.

Guns are durable goods without a shelf-life. At some point the market will be saturated. How are gun companies going to respond? That will be fascinating.

 

[Kynoch]

This thread is a clear example of what happens when opinions exist in the absence of data.

I can't speak for other US-made durable goods, but here are concrete examples of actual prices differences between 1984 (the date of the most recent Shooter's Bible I have) and 2012. I've tried to find some examples of common, substantially similar firearms between the two years.

1. Ruger Standard Model Auto pistol:
MSRP, Mark II, 1984: $168 = $371 (2012$)
MSRP, Mark III, 2012: $379 (2012$)

Price increase in real dollars: 2.2%

2. Beretta 92-series 9mm pistol:
MSRP, 92S, 1984: $515 = $1137.45 (2012$)
MSRP, 92FS, 2012: $650

Price increase in real dollars: -43%

3. Colt Single Action Army .357:
MSRP, 1984: $620.50 = $1370.46 (2012$)
MSRP, 2012: $1390

Price increase in real dollars: 1.4%

4. Remington 700 BDL:
MSRP, 1984: $446.95 = $987.15 (2012$)
MSRP, 2012: $985

Price increase in real dollars: -0.2%

----------------------------------------------

So, what are we bitching about again?

You're not getting it, are you? A Leatherman tool is pretty much the same price it was 10-20 years ago without adjusting for inflation. Do you get that? To make this an apples to apples comparison I would have to actually discount Leatherman's current pricing. The pricing you are posting is also no where near what market price was.

The Beretta is a very interesting example. While I don't know anyone that paid that sort of money for a Beretta (I remember them being ~$800-900) they are an excellent example of something that actually dropped in price. There goes the metal/R&D/insurance/etc. theories. The real reason is that the demand for the Beretta dropped with the advent of plastic handguns.

This topic is getting ever more interesting. I don't think it's a simple topic either. I think there are tons of nuances.

 

[Shear_stress]

You're not getting it, are you? A Leatherman tool is pretty much the same price it was 10-20 years ago without adjusting for inflation. Do you get that?

Funny guy. The title of this thread is "why are guns so expensive?" The answer is that they are as cheap or expensive as they have ever been.

When it comes to the bizarre expectation that the firearms market should track with a couple of cherry picked examples of durable goods that are not only far simpler in construction but are subject to vastly different market forces, the obvious answer is that manufacturers either can't make (the same) guns for less and/or that the market bears a price for guns that, in real dollars, doesn't really change over time. Why on earth would you assume that the market for a Snap-On wrench has anything, literally anything, to do with the firearms market?

But, no, I'm sure it's a conspiracy . . .

 

[X-Rap]

Today's prices are hardly a product of the GCA. Snap-On is an excellent example. So is Leopold, Leatherman, Ping and Glock.

Gun control that is now law and some which is only implied at this time is certainly driving the price of gun sales today.
If we could still buy and sell through the mail without regulation as prior to the 68 laws or buy and own FA weapons as in the early 30's do you think that there would be such a hunger for ownership of those things that might not be here next year? Many of us don't remember buying US Mil Surp through the mail like 1911's, M1 Carbines, or Garands but it happened. Very few remember freely owning FA weapons but I remember well $59 SKS rifles and cheap ammo to feed them as well as the AW Hi Cap ban so yes if you and others don't think the politics of gun control doesn't motivate and drive the market you probably believe in Santa Claus The Easter Bunny and the Tooth Fairy.
Tell the last free people on earth that they can't have something and see how valuable it becomes.

Snap-On is an excellent example.

It is probably the worst example.

 

[jmr40]

Using minmum wages as a guidepost I belive guns are cheaper than ever. Back in 1974 I was in high school working a minimum wage job and saved up enough money to buy my first rifle. I bought a Remington 700 ADL, a cheap scope, mounts, leather sling and 1 box of ammo. Total cost was $250 OTD. At 1974 minimum wages I worked 131.5 hours to pay for the gun. At todays minimum wages a kid working the same number of hours would earn $953. In 2012 I can spend $600 and have a better rifle and scope and have $350 left over.

 

[Kynoch]

Hmmm...

 

[Kynoch]

Funny guy. The title of this thread is "why are guns so expensive?" The answer is that they are as cheap or expensive as they have ever been.

When it comes to the bizarre expectation that the firearms market should track with a couple of cherry picked examples of durable goods that are not only far simpler in construction but are subject to vastly different market forces, the obvious answer is that manufacturers either can't make (the same) guns for less and/or that the market bears a price for guns that, in real dollars, doesn't really change over time. Why on earth would you assume that the market for a Snap-On wrench has anything, literally anything, to do with the firearms market?

But, no, I'm sure it's a conspiracy . . .

No they are not. But why not answer the question? Why have guns spiraled up in price over the past 20 years while many durable good have not? particularly durable sporting goods that have remained static in design for the last 20 years?

Any idea at all?

I picked Snap-On because they are largely made in the USA, made of steel and appeal to a target group in the USA -- just like guns. I provided other examples as well. Guns are NOT compatible to cars in terms of design costs, gov't mandates, etc.

 

[Shear_stress]

No they are not. But why not answer the question? Why have guns spiraled up in price over the past 20 years while many durable good have not? particularly durable sporting goods that have remained static in design for the last 20 years?

Gun prices have clearly, absolutely not spiraled up in price in real dollars. Let's please put this incorrect assumption to rest.

Then we can talk about a concept known as "economies of scale."