Gouging Pt. 2: Market Price, “Noble” pricing, and Flippers

As most know, I happen to be grammaton76, a moderator on Calguns.net.  This places me in a unique position to observe the in’s and out’s of the secondhand gun marketplace.

You may have read my previous rant, on how “gouging” isn’t gouging.  This may come as a surprise to you, but: I’m fine with what people call “gouging”, and a large part of it is because I hate gun board flippers with a blind-hearted passion.  But freedom demands that they be tolerated, and so I do.  Any attempt to infringe upon them will also infringe upon others, and there’s no way around it.

I define a gun board flipper as the person who buys something on a board with no intention of keeping it, solely because it’s a good deal and he buys it solely so that he can quickly sell it to someone else for full market value or higher.  A flipper is not the guy who bought a gun for himself years ago, then realizes it’s worth a bunch of money now and resells it.  And a hoarder (which seems to be another category of folks disliked on boards) is not a flipper.  If you’re buying thousands of rounds of ammunition to store so that you can sit in your bunker in the event of a catastrophe… fine with me; you’d make a good neighbor if things went bad.

I despise flippers because they deprive the eventual end user of a deal, they ensure that the original seller gets pennies on the dollar, and they laugh obnoxiously all the way to the bank.  Like electric arcs between contacts with big potential differences, flippers appear like magic whenever there’s a big difference between the price you are asking, and the price they know they can get from someone else.  I really want to see people offer their items at close to market price so that the sellers are reaping the profits, and the items go to the actual intended users of the items, and no flippers are involved in the process.

Let me summarize my feelings:

  • If you’re a gun board flipper, I think you’re scum.
  • If you enable flippers by underpricing out of some sense of “honor”, you’re naive and you’re the reason flippers are so prevalent.

Now that that little bit is over, I will discuss recent occurrences in the Calguns marketplace.  No names will be named, but folks may recognize their own stories here, and I do not give one flip how that makes them feel.

Our society is nominally free – people are free to buy or not at whatever price they wish, and they are also free to sell or not at whatever price they wish.  Calguns, and other gun forums, are just another example.

Of course, like in any gun panic, there’ve been some people who felt bad about the current pricing, and have wanted to help out fellow shooters.  In two instances within the last 30 days, there were guys who, instead of asking the current market price of their items, offered them openly at more or less the “old” going price.  This was a noble gesture, and their items sold fast, as you might expect.  The buyers thanked the sellers profusely for the deals, talked about how they were going to keep it for their collection, etc.

Two weeks later, the buyers re-posted the items in the for-sale forum, for current market price.  The buyers were flippers, out to make a buck off of the sellers’ misguided senses of nobility.

See what happened there?  Two guys offered “noble” pricing, the flippers took the deal, lied about how it was going to be for their own collections, and flipped the items as soon as they had them.  In one case it was a gun so the guy waited two weeks for it to get out of DROS, but in the other case it was ammo.  Now an actual end user, the person who should’ve gotten a good deal to begin with, will still end up paying the full market price (or higher), but the profits all go to the flipper, and the seller will get none of it.

There is nothing in the forum rules against this, because any such rule would be unenforceable.  The flippers in question DID make the jerk move of listing it on Calguns again though, in full view of the original sellers, which adds insult to injury.

“Wait”, you might say, “clearly, not everyone is that inconsiderate!”  Actually, you’re right.  Because most flippers are considerate enough to sell it on Gunbroker or other forums so that you don’t find out about it, and they can get a shot at the next gun you sell cheap.

Seriously, this is what happens when you list your stuff below market value to help people: you only encourage flippers, and the actual buyer of your item is still paying market price or higher.  How do you stop these guys?  Raise your prices.  Ask fair current market value, or just enough below it that it’s not tempting to a flipper.  The guy with the rifle saw a quick $300 profit, and he seized it.  Had the original seller priced it closer to market price, the flipper wouldn’t have seen enough profit in the deal to make it worthwhile, and it probably would’ve gone to an actual user.

This is why I don’t give people deals, and I don’t perform free services for people anymore.  Back when Romanian parts kits were $80 apiece and NDS-3 receivers cost $55, I helped a guy build several Romanian AK’s for free, with my tools at my place.  Months later, he bragged to me how he got $1200+ apiece for these guns which he swore we were building “for his collection”.  I never got paid a penny for the wear on my tools, or the several weekends I spent helping him build those.  The minute I changed my policy to demanding $100/build for the use of my tools and my assistance on building AK’s, he bought his own tools and started building his own guns on his own time.  It’s amazing how that works.  Same thing goes for asking close enough to market price, that the flippers won’t want to bother.

Here’s the Sean Newton guide to fighting flippers:

  1. Be a “gouger”, not a victim.  In the for-sale forum of any board, you have only two choices in this market: be a “gouger”, or be the guy pouring money into the pockets of the flippers.  It is much better to be the former than the latter.
  2. Trades are an excellent alternative to asking more than you feel is right.  If you’re offering a gun for its old retail price, and a guy exchanges equivalent ammo with you at the old retail price for that ammo, then you’re at a fair exchange no matter which way you compute the numbers.
  3. You can’t herd cats, you can’t regulate the internet, and you can’t expect honor out of your counterparts.  Does your board want to try to combat flippers by implementing a no-flipping rule?  Don’t bother, they’ll just list on another board or on Gunbroker, or Armslist, or another board.  Never accept a gentleman’s agreement with some guy you just met that, that item X is really for his own collection.  An honest man may say it, but a flipper will say the same words.  And check the next point if you think only honest men are trolling your board’s for-sale forum.
  4. Flippers ARE going to see your deal before anyone else.  Who do you think hangs out in the marketplace on gun boards all the time?  Hint: The flippers are constantly trolling for deals, and actual “real” buyers check once or twice a day – if that. Statistically speaking, anything you list at a good price is very likely to go to a flipper.  I’m not the highest-ranked ninja of Perl, but I wrote a system to scan the CGN marketplace for new for-sale threads with certain keywords for a (non-flipper) friend, and the flippers are probably doing the same thing.  Deals are in front of the motivated buyers within minutes, and flippers are some of the most motivated out there.  Never expect that the first person to see your deal won’t be a flipper.
  5. Sell everything with the full expectation that the other guy’s going to try to flip it.  If you asked full market value for your gun, and someone else knows a way to sell it for +50%, then cool – let him do it.  Just don’t sell anything so cheaply that you’re going to feel bad when you see it for sale again two weeks later.
  6. Even if you intend to take less money, list higher.  If you list something at $900, flippers will pass it by or give you a lowball offer around what you actually wanted out of it (say, $600).  Refuse the lowball offer.  Because the guy who shows up to buy it at full market value, say $900, actually does want it for himself.  So if you wanted $600 for your rifle, when he shows up at the shop to do the transfer, give him back $300.  Be aware that he might still flip it, but you’ve actually eliminated probably 95% of the flippers if you only sell to people willing to pay market price.

Preview of a future rant: Over the course of years, I’ve paid attention to all the myriad of reasons people regret selling guns.  Most long-term shooters have several regret stories, and my path to a life without regrets is simple: I just don’t sell my guns.  My friends call me the “black hole of guns”, for good reason.  This will be the subject of a later post, but you should never sell a gun to buy a gun.  Whatever made you want the gun in the first place, is going to make you want it again later on, and the next one you replace it with probably won’t be as good.  Selling a gun to buy a gun is the prime cause of most “I regret selling that” stories I’ve read.

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