Mention was made in an OSA thread that some new in box gun prices bought online are less than the local gun shop's dealer cost. I don't know about a dealer's cost of a gun, but I do know that recently in several gun shops and gun shows I have seen prices on fairly common guns such as a Ruger LC9S that were almost $90 higher with tax than the same gun ordered on line that came with free shipping plus the FFL charge. That is quite a difference when you are talking $319 vs. $406.
I used to work with some bicycle shops several years ago and they had a situation when large bike name-brand companies would require them to buy a minimum number of bicycles to stay as an authorized dealer or even to get any bikes from the company. This almost always came with a "no returns" policy from the big bike company...they were now the property of the local bike shop.
The problem began when the bike companies and distributors began selling their unsold inventory at the end of the bike season to primarily large online bike sellers (Colorado Cyclist for example) at clearance prices lower than the local bike shops paid at dealer cost. The local bike shops were then faced with having to try and sell a bike that was priced more than someone could order it online and ended up having to take a loss on each sale.
The problem got drastically worse and became a vicious cycle when the bicycle companies and distributors not only started selling excess inventory at below dealer's cost, but also started to advertise a "better newer faster stronger" (BNFS) next year model to the public to try and generate interest and future sales.
This situation was made worse for local bicycle shops as as overall bike sales began slowing and bicycle companies and distributors relied more and more on the "better newer faster stronger" model to try to generate more demand and get more sales. The fire sale of last year's models and announcements and advertisements of the BNFS models started coming earlier and earlier each year. This resulted in potential buyers not wanting to buy the current floor model bikes and waiting for the BNFS ones to arrive next year.
This caused the local bike shop to get squeezed even earlier in the season than usual. Not only could they not sell the current model at a profit, they sometimes couldn't even move them at a loss because the new next year models were promised to be such revolutionary products. That meant the local bike shop had to carry the unsold current model over the winter and then had to try to sell a now one year old non-BNFS model in a slowing sale environment the next bike season. That didn't work well at all.
This business model was not a viable one for most of the smaller bike shops. Minimum order requirements were increased by the big bike companies and distributors to make up for slowing overall bike sales, resulting in the smaller local bike shops having to quit carrying those brands. Other lesser-known bike brands who were willing to sell in smaller quantities to the local bike shops had less desirable (read that as not as publicized to the masses through expensive bike magazine and national advertising or having cheaper components) bikes and/or charged a higher price per bike on smaller purchases by the local bike shops.
The bike component manufacturers soon followed suit by allowing their name brand components to not just be sold by local brick and mortar dealers, but by the online catalog bike component sellers. In many cases, the local bike shop owners told me that reduced their component sales and service business significantly and that it became cheaper for them to buy components from the on-line catalog sellers than it was to buy from the manufactures and distributors.
The result of this unscientific finding by me? With no consideration or protection of the local brick and mortar stores by the manufacturers and distributors not one of those small bike shops is in business today. No doubt there are innumerable factors that brought about the demise of these local bike shops, but for two of the ones that closed the owners told me it was a direct result of the bike companies' actions described above. I don't know that bike and gun shops are a mirror comparison, but I do hope that the impact the bike companies had on their loyal small bike shops doesn't come to pass in the gun world.
I used to work with some bicycle shops several years ago and they had a situation when large bike name-brand companies would require them to buy a minimum number of bicycles to stay as an authorized dealer or even to get any bikes from the company. This almost always came with a "no returns" policy from the big bike company...they were now the property of the local bike shop.
The problem began when the bike companies and distributors began selling their unsold inventory at the end of the bike season to primarily large online bike sellers (Colorado Cyclist for example) at clearance prices lower than the local bike shops paid at dealer cost. The local bike shops were then faced with having to try and sell a bike that was priced more than someone could order it online and ended up having to take a loss on each sale.
The problem got drastically worse and became a vicious cycle when the bicycle companies and distributors not only started selling excess inventory at below dealer's cost, but also started to advertise a "better newer faster stronger" (BNFS) next year model to the public to try and generate interest and future sales.
This situation was made worse for local bicycle shops as as overall bike sales began slowing and bicycle companies and distributors relied more and more on the "better newer faster stronger" model to try to generate more demand and get more sales. The fire sale of last year's models and announcements and advertisements of the BNFS models started coming earlier and earlier each year. This resulted in potential buyers not wanting to buy the current floor model bikes and waiting for the BNFS ones to arrive next year.
This caused the local bike shop to get squeezed even earlier in the season than usual. Not only could they not sell the current model at a profit, they sometimes couldn't even move them at a loss because the new next year models were promised to be such revolutionary products. That meant the local bike shop had to carry the unsold current model over the winter and then had to try to sell a now one year old non-BNFS model in a slowing sale environment the next bike season. That didn't work well at all.
This business model was not a viable one for most of the smaller bike shops. Minimum order requirements were increased by the big bike companies and distributors to make up for slowing overall bike sales, resulting in the smaller local bike shops having to quit carrying those brands. Other lesser-known bike brands who were willing to sell in smaller quantities to the local bike shops had less desirable (read that as not as publicized to the masses through expensive bike magazine and national advertising or having cheaper components) bikes and/or charged a higher price per bike on smaller purchases by the local bike shops.
The bike component manufacturers soon followed suit by allowing their name brand components to not just be sold by local brick and mortar dealers, but by the online catalog bike component sellers. In many cases, the local bike shop owners told me that reduced their component sales and service business significantly and that it became cheaper for them to buy components from the on-line catalog sellers than it was to buy from the manufactures and distributors.
The result of this unscientific finding by me? With no consideration or protection of the local brick and mortar stores by the manufacturers and distributors not one of those small bike shops is in business today. No doubt there are innumerable factors that brought about the demise of these local bike shops, but for two of the ones that closed the owners told me it was a direct result of the bike companies' actions described above. I don't know that bike and gun shops are a mirror comparison, but I do hope that the impact the bike companies had on their loyal small bike shops doesn't come to pass in the gun world.
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