Ammo shortages don't make sense in a free market economy,

This is a discussion on Ammo shortages don't make sense in a free market economy, within the Defensive Ammunition & Ballistics forums, part of the Defensive Carry Discussions category; Originally Posted by cvhoss What I'd like to know is who is getting the cash from the increased costs? If it's the manufacturers themselves, then ...

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Thread: Ammo shortages don't make sense in a free market economy,

  1. #16
    Member Array 40S&WMAN's Avatar
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    Quote Originally Posted by cvhoss View Post
    What I'd like to know is who is getting the cash from the increased costs?

    If it's the manufacturers themselves, then part of the price increases could be attributed to increased production costs. During a temporary shortage, it wouldn't be a prudent business move to hire & train additional employees or invest in additional equipment, but it may be productive to work current employees more (overtime) to increase production. Overtime costs would definitely increase the base cost of the product.

    If it isn't the manufacturers getting the cash, then it falls to the wholesaler or retailer and IMO, that falls into simple profiteering.

    It would be interesting to talk with someone who purchases directly from the manufacturers (Federal, Speer, Hornady, etc.) and compare the manufacturers current price to the price 6 months ago. We all know how much it has increased in the last 6 months, but where is the additional money going and why would be a legitimate question.

    Hoss

    some dealers in town where charging $50.00 for P-mags, 29.99 for 20rnd XM193, and things like a rem. 870 express that i bought for $299. last year are $500.000, you cannot tell me that the manufactures nearly doubled the prices, the local shops are buying lots of airtime telling people "a national change is upon us and you 2nd amendment rights may be lost"

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  3. #17
    Member Array alfack's Avatar
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    Quote Originally Posted by Hopyard View Post
    Indeed. Why would any business invest in producing more of a scarce product when the scarcity is causing the prices to rise and stay high?
    To maximize profits, the theoretic goal of every business entity. They could sell more at lower prices. There is a narrow window where profit maximization occurs and it is not at the highest price/lowest volume or lowest price/highest volume. The problem is us consumers have modified our behavior, rationally or not, and caused too high of a demand. If everyone would boycott buying ammo for the next couple of months, the prices would come down. Somehow, I don't think this will happen, given the hysteria and insecurity that this administration has promulgated.

  4. #18
    VIP Member Array Yoda's Avatar
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    One small sports/gun shop owner I know said that he has a customer with 3 large ranches in Texas and bought $14,000 in ammo in a single purchase. I think he was preparing for the possible Mexico drug spillover.

    When customers are stocking up like this it is hard to keep inventory. Best practice is buy it when its available or wait and eventually the stock will be replenished.
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  5. #19
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    shortage? its more like an epidemic.

  6. #20
    Senior Member Array AZ Desertrat's Avatar
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    I second the small pistol primer comment.....I am two months backordered at Cabelas now......I have 12 pounds of powder, plenty of brass and projectiles....but NO primers.....
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  7. #21
    VIP Member Array ccw9mm's Avatar
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    Since no economy is perfectly fluid, a system will adjust now and then to accommodate. But, such accommodation can't always be instantaneous or prescient. Thus, we get the ever-present price, supply and demand fluctuations, with occasional outages, spikes/crashes in price. In every sense of the word, the "free" market is working well.
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  8. #22
    VIP Member Array mcp1810's Avatar
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    One of the things I am doing is making note of which shops locally are profiteering. They are the ones that will not get my business, EVER. I have seen shops with tables at local gun shows selling twenty round Pmags for $20 each! Heck with a commercial account you can get the thirty round with the window from one of the major mail order places for $16.
    I admit, I did pay way too much for small rifle primers. I got 1000 for $40. That is about triple what I normally pay. However I am never going to do business with that shop again.
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  9. #23
    VIP Member Array cvhoss's Avatar
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    Quote Originally Posted by mcp1810 View Post
    .........I admit, I did pay way too much for small rifle primers. I got 1000 for $40. That is about triple what I normally pay. However I am never going to do business with that shop again.
    I'd appreciate knowing where you've been buying primers in the $14/1000 range anytime in the last year or so. That's cheaper than I've seen them in a long time. They may not have any now, but if it's an Internet company, I'd like to know for future reference.

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  10. #24
    VIP Member Array mcp1810's Avatar
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    Cvhoss, sorry but that is the one time I have bought primers in the last two and a half years. I only bought those because I knew I didn't own any of that type so there was no point in digging through my stuff to look for them.
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  11. #25
    Distinguished Member Array Rugergirl's Avatar
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    From what I have read, here and elsewhere the ammo manufacturers are running at full capacity 24/7 seven days a week.
    It may be the shipping department that takes Friday off, but the actual production of the ammo is round the clock.
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  12. #26
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  13. #27
    Senior Member Array Jmac00's Avatar
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    Good news (for me, anyway) the bullets I ordered back in JANUARY, should arrive this afternoon. Hopefully I can pick them up tomorrow or Wednesday.

    These bullets were ordered the first week of January

    I paid $72/1000 for 165gr RNFP (plated) projectiles. With shipping the bill came to $159
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  14. #28
    Senior Member Array dgg9's Avatar
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    Quote Originally Posted by tinkerinWstuff View Post
    From the horses mouth so to speak -

    One of my customers is a firearms manufacturer. He could really use a new machine that I could sell him which would make him both more profitable and be able to pump out more guns.

    His response, "we don't want to invest any money in the firearms manufacturing side of the business because we don't know what this new administration will bring within the next two years."
    For guns and magazines, I can see that, what with the spectre of a new AWB always in the background.

    It doesn't explain why ammo is so scarce. There are no credible ammo bans on the horizon. Demand for ammo has been high for over a year. Granted, usually the higher prices send the message through the markets to lower demand, and the Obama election short-circuited that. But ammo has been getting scarce for over a half a year now. People are looking to buy, and the top venders don't have enough to sell. Potential sales are sitting there on the table, unclaimed. I don't see why they don't start more shifts, etc.

  15. #29
    Senior Member Array Jmac00's Avatar
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    Quote Originally Posted by dgg9 View Post
    For guns and magazines, I can see that, what with the spectre of a new AWB always in the background.

    It doesn't explain why ammo is so scarce. There are no credible ammo bans on the horizon. Demand for ammo has been high for over a year. Granted, usually the higher prices send the message through the markets to lower demand, and the Obama election short-circuited that. But ammo has been getting scarce for over a half a year now. People are looking to buy, and the top venders don't have enough to sell. Potential sales are sitting there on the table, unclaimed. I don't see why they don't start more shifts, etc.

    His response, "we don't want to invest any money in the firearms manufacturing side of the business because we don't know what this new administration will bring within the next two years."
    If the firearms manufacturers are not investing and with the NObama administration saying they want all kinds of new restrictions (whether credible or not, or simply rumor) NO MANUFACTURER is going to invest in infrastructure if the government even HINTS that they maybe out of business in 2 to 4 years.

    Purely simple economics. Infrastructure cost a LOT OF CAPITAL and the ROI (return on investment) is 5 to 7 years, why would you buy new equipment, I don't blame ammo and firearm manufacturers for not increasing production beyond what they are doing right now. There is simply no incentive to do so.

    We can even go beyond what the Ammo manufacturers are going through by looking at NObama's "stimulus package" .

    if you read "the package" the NObama Administration has left manufacturing IN GENERAL completely OUT OF THE PACKAGE??? There is no incentive for tool and die makers, or wood workers, or parts vendor's or any other manufacturer to invest in there companies. This is a UNBELIEVABLY HUGE MISTAKE.

    Now if the Administration doesn't do anything in the next 12 months (in the way of weapon and ammo restrictions) then I would expect things to calm down, and I would expect price to fall accordingly
    Last edited by Jmac00; March 30th, 2009 at 10:14 AM. Reason: spelling error (my spell checker went to work LOL )
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  16. #30
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    Keep in mind commodity shortages and prices. Having had the plumbing ripped out of property I own so the kiddos could get a bucks for the copper, I know that commodity shortages (and black market) exist.

    Moreover, I am old enough to remember when price increases in sugar a flour
    made caused huge increases in things like cola and bread, even though the raw ingredient cost changes were a fraction of the retail price.

    It was gouging then, and there is gouging now, and there is a way to stop it.

    I do considerably less shooting than in the past. If everyone cut back a little and stocked a little less, things might get back into balance.

    While we as individuals no doubt consider our guns and ammo as necessities of life, most don't, and so I have no problem with letting market forces sort this one out. In the meantime, I "ain't" paying 8 bucks again for 100 rnds of min-mags, or 25 bucks for a box of 380. I have enough on hand for reasonable SD needs; and that it--- I won't do what Retsupt does, for example, and stockpile.

    In fact, I think buying now is doing exactly what too many home buyers and stock buyers did; buying into a bubble and perpetuating the bubble.

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