There’s a simple duality of laws at work in a market economy known as the supply/demand relationship. Generally, if demand for a good increases, then the supply of that good scales up accordingly. This keeps the price of that good somewhat level.
However, if the supply cannot match a sudden spike in demand, then the equilibrium is skewed, and prices rise. That’s what’s happening in a segment of the gun industry right now.
Case in point: the AR-15. We’ve got a Democrat heading up the Executive branch come January, and now everybody thinks it’s going to be banned. So, in one fell swoop, folks all rushed out and grabbed up every last one of these they could find. Demand quickly outpaced supply, and what happened? Prices went up.
Since the primary supply outlet (manufacturers and distributors) is currently near zero, those who were quick enough (and had the money to blow) have a near-monopoly on the secondary supply.
The demand is still there, so sellers on the secondary market have been able to command some ridiculously inflated prices. Normally, this wouldn’t fly, but folks on the demand side are being driven by an ill-founded “I’ll pay anything” mentality.
That, folks, is any seller’s wet dream.
As a result, rifles that were $700-800 at retail a month ago were going for over $2000 at gun shows two weeks ago. That doesn’t shock me; what gets me is that people are paying those prices.
Fortunately, that bubble appears to be shrinking, even if it hasn’t burst yet. I’ve heard back from several people who attended a gun show today, and it appears that those $2000 AR-15’s are now tagged with “discount” prices of $1200-1500.
That’s still hardly a bargain, and as I’ll explain, there is no sane reason to pay those prices.
This whole situation is the result of a sudden and near-total depletion of supply. However, this is a short-term problem. Manufacturers want to sell their products, and as such, they will be replenishing supply. I’ve heard from two who expect to be back on track by the end of the year, and several others will be back to normal by late January.
So, those $800 AR-15’s will all be back on retailer’s shelves in a month or two. What happens to the $1500 gun show “specials?” Well, the folks sitting on them will be forced to sell them at prices to match retail, and perhaps less. That’s right: the ghouls who expected you to pay 200% premiums will likely be losing money in the long run, since they’ll have to beat the retail prices if they hope to unload their remaining inventory (bear in mind, these people paid regular retail when they bought those guns in the first place).
Can’t say I have any sympathy for them, either.
In fact, we’ll very likely see a surplus as the warehouses restock. Nobody knows exactly how many rifles are needed to fill the remaining demand (and there’s still a panic on), so the manufacturers will likely err on the side of excess. If said supply outstrips demand, prices will have to give in the other direction.
I’ll go ahead and predict that the post-holiday months will be one of the best times in history to buy military-pattern rifles. Just hold out a few more weeks, and it will be a buyer’s market.