An hour round drive to save $50 on a gun is a decent hourly return for many people, even factoring in the cost of driving.
When I hear vendors justifying their higher price for the convenience of buying from them, what I hear is "I choose not to be price competitive". Of course, with alcohol, the difference in state taxation and regulations may make that impossible.
Correct on $50. I'd prob do the same. I guess I was referring more to the guy spending 4 hours driving around to save $20, or $1/box on ammo.
The difference in the liquor industry is that although it's very highly regulated, there are still a lot of stores, so you have your convenience option and you have your price option, both generally nearby. NH is an animal unto itself, because on the liquor side it is a two-tier system, meaning there is no mid-level wholesaler adding a layer of price to the product. In MA it's a three-tier system, with me as the oxygen thief (thanks, Drgrant). So prices will naturally be lower in NH.
Where it gets squirrelly is when a big national chain comes into the market and takes a scorched earth approach to its competition. Almost all national brands are priced at cost, with the goal of stealing every customer from every store in a 10 mile radius. With more than $2B in revenue nationally, these chains can afford to take that long term approach. Here are two examples: the best wholesale price on Smirnoff and Dewars is $17.99 and $27.99, respectively. That's what National Chain X sells those items for. Now, the guy selling them at $19.99 and $29.99 looks like he's dry fisting his customers, even though he's really only making 10% and 6.7% gross margin on those items. That's how quickly your local store can fold. Appear to be screwing your customers and they will leave. Margins in the liquor business aren't great, but they are blended together (smaller the size, higher the margin) so that the store can make a living.
I have no idea what the margins are for items in the firearms industry, but I assume certain products carry better margins than others, and it's all based on purchase volume. Truthfully, I like that Cabelas and Bass Pro don't have really low prices, because it gives other stores a chance to be competitive. Even though I know they could undercut every LGS if they wanted to. Then my local options would dry up, for the most part, and I'd be forced to drive 100/150 miles to do my shopping.