Marked Up Ammo at a LGS

Marked Up Ammo at a LGS

This is a discussion on Marked Up Ammo at a LGS within the Defensive Ammunition & Ballistics forums, part of the Defensive Carry Discussions category; I ordered 500.00 rounds of ammo recently and being a Chicago resident having it delivered to my doorstep was a no go So instead I ...

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    Marked Up Ammo at a LGS

    I ordered 500.00 rounds of ammo recently and being a Chicago resident having it delivered to my doorstep was a no go

    So instead I had the ammo shipped to a nearby store to my attention. I've done this quite a few times and never had any problems. Normally a store employee gives me a call when my order shows up but after two weeks of waiting I got a little antsy and decided to investigate. First I gave the company I ordered from a call and they said the order had been delivered. Next I called my LGS and asked if a shipment had came in for me and they said no. I explained the situation and they realized the did receive 500 rounds of Brown Bear but it was put on the shelfs. Honest mistake, they pulled it and held it for me to pickup.

    What amazed me was the price stickers that were stuck on the boxes when I picked them up. $40.95

    I paid $10.95 per box and was amazed they were willing to gouge their customers like that. 300% markup on ammo they didn't even pay for.

    Needless to say I haven't been back since or had anything else shipped there but the whole experience just blew my mind.
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    My only retail work was covering for my sister's best friend back in high school. One of my jobs that week was to put price stickers on stuff that came in. 300% was typical. Some was lower, some stuff higher, but that does not surprise me at all.
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    Thumbs down

    Say that is a SWEET PROFIT ain't it???

    After seeing that I'd be really hard pressed to deal with them again except for the very same way you did the first time. Case in point...I had 12 cases of #10 cans grub from a Utah cannery delivered to my bosses shop when I was working as a well driller (H20) nigh 20 years ago. Better that than dropped on my porch by UPS only to get stolen long b4 I ever got home. He was cool with it. I still got sum of that

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    OP What caliber was your Order of $500 worth? 9mm, 357, 45,??
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    VIP Member Array mcp1810's Avatar
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    Quote Originally Posted by NONAME762 View Post
    Say that is a SWEET PROFIT ain't it???

    After seeing that I'd be really hard pressed to deal with them again except for the very same way you did the first time. Case in point...I had 12 cases of #10 cans grub from a Utah cannery delivered to my bosses shop when I was working as a well driller (H20) nigh 20 years ago. Better that than dropped on my porch by UPS only to get stolen long b4 I ever got home. He was cool with it. I still got sum of that

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    OP What caliber was your Order of $500 worth? 9mm, 357, 45,??
    But out of that 300% you have to pay all the overhead. Rent, utilities, salary, taxes, insurance etc. And then you have to be able to pay for the next shipment. That "SWEET PROFIT" is not necessarily all that big.
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    Quote Originally Posted by mcp1810 View Post
    But out of that 300% you have to pay all the overhead. Rent, utilities, salary, taxes, insurance etc. And then you have to be able to pay for the next shipment. That "SWEET PROFIT" is not necessarily all that big.
    +1

    This is basic business, supply and demand stuff. When an ammo shortage isn't going on the pricing for ammo is cut throat. Every seller is selling their stuff within a dollar or so of each other during normal times. They are also selling it with very little markup to stay competitive. They make up for the small profit margin by volume selling.

    So what does that have to do with today's market? Everything! A LGS is now having problems getting stock in because everything is on backorder. Customers are still buying items up almost as fast as they come in. It sounds great at first but it can actually be a nightmare. If the LGS doesn't have enough stock then they can't cover their operating cost at the old markup because they can't do enough volume.

    It was great at first for them because they sold out of stock in record time but then couldn't restock. Now until the stock orders start catching back up and the panic buying stops, the LGS might be stuck in a catch 22. If they sell at old prices they won't make enough it stay in business. If they raise prices too much they alienate their customers. Then add in the internet companies with large distribution, inventory, and low operating cost. Internet companies can sell their stock when it comes in cheaper than any brick and mortar store. Big box stores that sell other things besides firearms are the same way because they're not dependent on it.

    Are there LGS that are marking their stuff way more than they have too? Sure, but without knowing their volume, cost, and overhead who knows which is which. All we can do is shop around and wait for things to die down.

    Lastly, American businesses, small and large, usually run on credit not cash. There are going to be mom and pop stores that are not going to make it through the tail end of this panic because they didn't save their record profits at the beginning of the panic.
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    Quote Originally Posted by mcp1810 View Post
    But out of that 300% you have to pay all the overhead. Rent, utilities, salary, taxes, insurance etc. And then you have to be able to pay for the next shipment. That "SWEET PROFIT" is not necessarily all that big.
    Understandable, but $40.95 for a 50 round box of .40 cal is ridiculous. I guess they must have buyers but I don't know who would pay that much for a box of Brown Bear .40 cal, especially now that things have calmed down a bit.

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    It's supply and demand, and while it's not how I would run a business, it's how some places make it through harder times. If their price is higher than the market will support, then it'll sit on their shelf until they adjust their price to match the market value. Not to mention that since it wasn't something that they actually ordered, it's quite possible that they marked it up based on information that is beyond our ability to rationalize. Like Guy A says "How much do I put on these .223 boxes that came in" and Guy B thinks that they are a completely different .223 that he did order and was expecting to see, so he tells Guy A to mark it accordingly. If Guy B was expecting Black Hills .223, then $40 a box wouldn't be outrageous.

    Personally I think I'd be spending my valuable typing time complaining about a state government that makes decisions about what completely legal products I can, and cannot, have delivered to my home...
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    Based on what my lgr has been getting lately, I'd say that's about right. And remember, they didn't pay anything for it.
    I'm not saying we should kill all the stupid people. I'm saying remove all the warning labels and let the problem sort itself out.

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    Just pointing out that its not 300% markup when you are selling someone else's ammo that you didn't order or pay for.

    Can you say "pure profit"?

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    That's a pretty terrible business if they can't even keep track of what they ordered and didn't order.
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    Well, the LGS didn't sell it apparently, so perhaps the market told them the markup was too high. Go for you, you got your ammo. Markups are not some scientific deal. They are guesses by the retailers on what they would like it to sell for.

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    A very, very small portion of the markup ends up being actual profit...that is, if the business is successful.

    Most people's head would spin if they found out how much the overhead/expenses cost that have to be paid from that markup just for the business to keep its doors open for business before the owner even considers paying himself/herself one penny that he/she has to pay taxes on before the remainder can be used to put food on his/her family's table. And news flash, that penny that the owner earns is not profit, that penny is his/her paycheck that they earned for doing all the work they do for their business. Profit is what is left over after everything has been paid, including the owners salary.
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    I guess I live in the "lessor of two evils" location. My LGS tends to sell ammo/guns for not much more than we were paying back before the rush. He is well established, a mom & pop operation, but widely known as a "square shooter" and always treats the customer right. He will continue to have all of my business.

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    I see where you guys are coming from but that just seems like bad business to me.

    Before the ammo scare there prices for 9mm ammo were a bit higher than average but they were still in the ball park I considered reasonable. I realize business have to cover their costs but a big part of business is also not alienating your customers. This particular store is fully staffed, always packed and I see one or two people purchasing a firearm every time I pay them a visit. They might be scraping by on the tip of their teeth but keeping repeat customers is always the more profitable business strategy in the long run from my experience in retail sales. Heck, I'm an impulse buyer who doesn't think twice about paying full price for anything that catches my eye and know the inventory catching my eye is at a different shop.

    Do any of you guys run a gun shop? Maybe you could chime in and let us know what you pay for ammo vs what it's sold for. I'd love to hear those figures to see if I'm over reacting. The shop I've been going to since still sells 50 rounds of 9mm for 15.99 or 100 for 30.00. Not the cheapest prices in the world but a lot more reasonable than 40.00 for 50 rounds.

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    If all these people hadn't screamed the sky is falling and run out to grab every box of ammo on the shelves, you wouldn't be creating this thread. It's self-generated pricing. let it gather dust for a few weeks and watch those $40 stickers get replaced. But no, some of the fools out there will scarf it up regardless.
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