The Economics of Ammunition

[FPrice]

A retired police chief from central mass whom I know just posted this on FB. Some interesting stuff.

Economics of Ammunition
Difficult times are impacting the firearm industry, especially the ammunition segment. Don't expect relief anytime soon.

"It is important to understand that ammunition pricing is not set by what the ammunition costs to produce, rather it’s determined by what the next batch is going to cost to produce. The profit margin is a set percentage that’s typically going to remain constant as long as production costs remain constant. An important factor in production are labor costs, which are similarly constant unless demand increases or decreases and affects long-term projections. As you can imagine during this unprecedented event, costs are fluctuating dramatically. "

Feel free to chime in. As if you guys need to be invited to express your opnions.

Economics of Ammunition - Guns and Ammo

Difficult times are impacting the firearm industry, especially the ammunition segment. Don't expect relief anytime soon.

www.gunsandammo.com

 

[sschevy]

The gravy train of dirt cheap ammo has ended for the foreseeable future for sure

the manufacturers have already told me to expect a 10-15% increase on many calibers immediately

 

[timbo]

I'm so glad I reload. I don't have unlimited components but at the rate I've been going to the range (not much), I have enough for the foreseeable future.

 

[appraiser]

does he address supply and demand, like gasoline, the price of the stuff already in the tank can be raised significantly if the price of the next truckload is anticipated to be higher.

Although the cost to produce ammo may go up, and with it the price, the law of supply and demand says that the actual price is set by the market, and if ammo is in short supply, everyone in the supply chain is going to raise the price along the way.

Ammo is a commodity you buy long before you need it, stack it high and deep.

Nobody ever regretted investing in Brass, Lead and Copper.

 

[teamRR]

The gravy train of dirt cheap ammo has ended for the foreseeable future for sure

the manufacturers have already told me to expect a 10-15% increase on many calibers immediately

10 to 15% isn't really armageddon, it's the 100% increases I worry about.

 

[Mark from MA]

Nobody ever regretted investing in Brass, Lead and Copper.

People that buy it on a credit card, at the top of the market, do. Especially if they then need to sell it at the bottom of the market.

Its a commodity like everything else, and in crazy cycles can see silly highs, and then drastic lows. I don't think we will see the lows anytime soon, but unemployed people will not be stocking up on overpriced ammo. Unless its SHTF time.

I too am glad I reload......

Im also glad I shoot .40. I could buy it for 29 cents a round right now. Not that that its a great price but its available and not rape.

 

[enbloc]

I reload AND stack commercial ammo. I feel well positioned...

 

[sschevy]

10 to 15% isn't really armageddon, it's the 100% increases I worry about.

a agree with ya

but plenty of people out there will see the price of 9mm go up $2 a box and loose their minds

I miss the days of $4 a box 9 and $2 a box 5.56

 

[teamRR]

a agree with ya

but plenty of people out there will see the price of 9mm go up $2 a box and loose their minds

I miss the days of $4 a box 9 and $2 a box 5.56

Oh yes - and the $100 cases of 7.62 Russian we used to buy..

I got lots, not enough to shoot every caliber a lot, but basics I need not be gouged for awhile.

If it goes on just gonna work more on my long game this summer, match ammo is fairly available and reasonable, and keeps me busy without needing to run hundreds of rounds a day.

 

[citoriguy]

a agree with ya

but plenty of people out there will see the price of 9mm go up $2 a box and loose their minds

I miss the days of $4 a box 9 and $2 a box 5.56

I miss $0.90/gallon gas too, but life marches on. There’s going to be a lot more crazy prices in the FS section soon.

 

[Mark from MA]

I miss $0.90/gallon gas too, but life marches on. There’s going to be a lot more crazy prices in the FS section soon.

You may get those .90 cent a gallon prices back again!

 

[appraiser]

adjusted for inflation we are sub 90 cents a gallon now, and remember in MA close to 45 cents a gallon is taxes or fees of some sort

 

[Mark from MA]

That is true.

 

[FiremanBob]

Remember, if (when?) the boog drags on or the EMT kills the grid and the supply chain of chemicals to make smokeless powder and primers dries up, black powder and flint will become state-of-the-art personal defense technology.

 

[wilson911]

10 to 15% isn't really armageddon, it's the 100% increases I worry about.

Armageddon is when you cant buy any. Even at double the price.

 

[timbo]

Remember, if (when?) the boog drags on or the EMT kills the grid and the supply chain of chemicals to make smokeless powder and primers dries up, black powder and flint will become state-of-the-art personal defense technology.

Just like the progs want, vis a vis the 2a

 

[timbo]

a agree with ya

but plenty of people out there will see the price of 9mm go up $2 a box and loose their minds

I miss the days of $4 a box 9 and $2 a box 5.56

I remember $5 bricks of .22LR CCI Stingers too but that was when I was making $1.65 an hour during the early 70s

 

[Uzi2]

I reload AND stack commercial ammo. I feel well positioned...

I reload and stack both reloads and commercial/milsurp ammo.

a agree with ya

but plenty of people out there will see the price of 9mm go up $2 a box and loose their minds

I miss the days of $4 a box 9 and $2 a box 5.56

That was a long long time ago.

 

[rudiewhitebwoy]

I know that commodity Lumber & Panel are usually priced based on replacement cost.
Market goes up, you go up, you might drag your feet a little depending on how much inventory you have and how busy you are.
Market goes down, you go down and it's harder to drag your feet. People with low inventory will drive there competitors prices down.
Our salesmen work on straight commission, and that commission is based on current market, regardless of our cost.
It's the commodity buyers job not to F^@k up too badly. That's my job. I buy not to make money, but to save money.
The market is the market, we get a little better than 30% of what we quote but if we hold our numbers in a rising market we could get 60%.
I make sure we can cover at the the lower cost, most of the time anyway.

 

[Uzi2]

Just wait until inflation hits, today's prices will seem cheap.

 

[teamRR]

Just wait until inflation hits, today's prices will seem cheap.

Shouldn't things go the other way during a downturn like this, ie dollar worth more because there are less of them in play basically?

 

[swampy]

I'm retiring in 5 years. I'm stockpiling components and reloading for that period of my life now. I also have 1000lbs of lead, a few hundred pounds of linotype, 100lbs of pewter, and plenty of molds. My powder supply needs revue however.

 

[Mark from MA]

Shouldn't things go the other way during a downturn like this, ie dollar worth more because there are less of them in play basically?

Less dollars in play???? The printing presses are running full bore.

 

[teamRR]

Less dollars in play???? The printing presses are running full bore.

Ya printing $$ is an issue, I was more thinking about recession itself as that does (and is currently) reducing inflation.

 

[enbloc]

Today's prices will be a bargain in the future. That's why I'm buying the right ammo at the best prices that I can find now.
Because of these past practices, I have not felt the 'pinch' of the current shortage and I am shooting ammo at yesterday's prices.

Well, at least up until they shut down my club...

 

[Mark from MA]

Today's prices will be a bargain in the future. That's why I'm buying the right ammo at the best prices that I can find now.
Because of these past practices, I have not felt the 'pinch' of the current shortage and I am shooting ammo at yesterday's prices.

Well, at least up until they shut down my club...

I don't know....short term....if Trump gets in and the virus goes bye bye. Lot of unemployed people out there sitting on overpriced ammo. A unemployed people not buying ammo. Ammo companies possibly have overproduced to meet orders sitting on dealers floors. Could be a glut possible and prices could hit the cellar.

Prices on commodities on copper, lead and brass from other industries like building, auto making and manufacturing will go down as well if the economy stumbles and
doesn't come back fast.

 

[Mark from MA]

Ya printing $$ is an issue, I was more thinking about recession itself as that does (and is currently) reducing inflation.

Short term I agree.

 

[enbloc]

I don't know....short term....if Trump gets in and the virus goes bye bye. Lot of unemployed people out there sitting on overpriced ammo. A unemployed people not buying ammo. Ammo companies possibly have overproduced to meet orders sitting on dealers floors. Could be a glut possible and prices could hit the cellar.

Prices on commodities on copper, lead and brass from other industries like building, auto making and manufacturing will go down as well if the economy stumbles and
doesn't come back fast.

I'm not going crazy, just buying stuff I shoot, or can be sold off to non-prepped individuals. 5.56, 9mm, .22, 12ga slug & buckshot.
Preppers always look at the long term...