ZeroHedge on Ammo

Squander

Marksman
Rating - 100%
35   0   0
Jun 27, 2014
165
18
South Bend

Suggestion is that inflation provides a cover for price increases that are actually going to profit. And we're paying the prices. Perhaps it's time to stop buying, and to let the inventory build up at the factories.
 
Last edited:

2in1evtime

Master
Site Supporter
Rating - 100%
56   0   0
Oct 30, 2011
2,535
83
retired-midwest
It is definitely a profit driven drive by the ammo makers and the makers of components, primers from 3 cents to 10 plus cents, powders up to 35% increases, bullets and lead prices way up too, thinking component prices are high just to get people to purchase the ammo they make!!!!!!!!!
 

Brian's Surplus

Sharpshooter
Site Supporter
Advertiser
Rating - 100%
4   0   0
Jul 18, 2016
486
43
Howard County
I think it's as much the middle man that's jacking the prices.
That's certainly true in some cases, but have you been paying attention to all of the price increases levied by the manufacturers? Vista has been raising prices multiple times per year. I use the same formula to determine retail mark-up that I have since before the shortages. Primers were $33 for basic ones up to $58 for bench rest back then, they are $65 to $125 now. Pretty much double.

Powder has been going up quarterly. We just got hit with an increase on Alliant and all of the Hodgdon brands. Around $2-3 per #. Literally while they hit us with an increase, Vista announced another, to take place April 1st...
 

Brian's Surplus

Sharpshooter
Site Supporter
Advertiser
Rating - 100%
4   0   0
Jul 18, 2016
486
43
Howard County
Powder prices are on average 25% more, primers 300% or more depending on where purchased, projectile prices are up 255 or more, ammo prices are up a lot, Inflation[ value of the dollar is down] and a corrupt administration in the whitehouse doesn't help either!!!!!!!!!!!!!!!!!!!
It makes it difficult for retailers as well. Anything I have that has been on the shelf for more than a few months runs a risk of costing me more to replace than I sell it for. I just sold a tumbler a couple weeks ago for $74.77. I went to reorder it and it cost me $83.99 plus shipping. I had just bought it last year. Prices are going up in an amount greater than my markup in just a few months.
 

tackdriver

Marksman
Rating - 0%
0   0   0
Apr 20, 2010
176
43
Interesting indeed. A few years back (well, quite a few) I studied the economic collapse in Argentina around 2000. One big problem was that retailers didn't catch on to what you just described. Normally - buy a can of beans for .35 and sell it for .70. With rapid inflation, shopkeepers thought "Hey, I'd better sell this for 1.00 to keep up with inflation, only to find out it was 1.20 when they tried to restock their shelves. Compound this across most products and decreased credit power, and they just couldn't restock. This further reduced supply to consumers, increased panic, and drove prices higher again. It was a pretty vicious cycle, leading to pretty vicious conditions on the street.

The kicker was, the root causes were pretty simple to understand, and the trouble was predicted by many, years ahead of the collapse. The Gov't was just to entrenched in the games they were playing, and completely unwilling to take the actions needed to avoid the crisis. They just let the train go over the cliff because they didn't want to use the brakes.

Sound familiar?
 

BugI02

Grandmaster
Rating - 0%
0   0   0
Jul 4, 2013
24,647
149
Columbus, OH
It is definitely a profit driven drive by the ammo makers and the makers of components, primers from 3 cents to 10 plus cents, powders up to 35% increases, bullets and lead prices way up too, thinking component prices are high just to get people to purchase the ammo they make!!!!!!!!!
You're on the right track, but think of it another way

If they can sell the critical components for reloading for a total of, say, $120 ($35 for 1 lb of powder and $85 for 1000 primers) or they could use those components to make 1000 rounds of perhaps 9mm (5 or 6 grains per round and one primer) and they can sell those 1000 rounds for 40¢ per round then that is $400. Not sure what the relative profit margins are, but I'm betting it is higher on the ready to use ammunition

It seems they can sell just about all of the ready to use that they can produce, so it would make sense that not much attention will be paid to components except as they reach a point where they have excess production capacity for primers and powder. I'm surprised that there is as much availability as we are seeing, and prices won't be under any pressure to get lower until the ready to use ammo pipeline is substantially recharged
 

Brian's Surplus

Sharpshooter
Site Supporter
Advertiser
Rating - 100%
4   0   0
Jul 18, 2016
486
43
Howard County
Interesting indeed. A few years back (well, quite a few) I studied the economic collapse in Argentina around 2000. One big problem was that retailers didn't catch on to what you just described. Normally - buy a can of beans for .35 and sell it for .70. With rapid inflation, shopkeepers thought "Hey, I'd better sell this for 1.00 to keep up with inflation, only to find out it was 1.20 when they tried to restock their shelves. Compound this across most products and decreased credit power, and they just couldn't restock. This further reduced supply to consumers, increased panic, and drove prices higher again. It was a pretty vicious cycle, leading to pretty vicious conditions on the street.

The kicker was, the root causes were pretty simple to understand, and the trouble was predicted by many, years ahead of the collapse. The Gov't was just to entrenched in the games they were playing, and completely unwilling to take the actions needed to avoid the crisis. They just let the train go over the cliff because they didn't want to use the brakes.

Sound familiar?
I've been thinking about this a lot, especially now that we are spending a decent amount of time tracking and adjusting prices. We already have a plan if things get to the point of true hyper inflation. At that point it would be physically impossible to change prices fast enough. I would basically convert our pricing structure from US Dollars to store currency, something like "Brian's Bucks". We would have a dry erase board that could be changed as frequently as needed to show the current rate of exchange. It really scares me that I even had to come up with such an idea. I certainly hope I never have to implement it.
 

Bill2905

Expert
Site Supporter
Rating - 100%
1   0   0
Feb 1, 2021
1,051
113
Lake County
If they can sell the critical components for reloading for a total of, say, $120 ($35 for 1 lb of powder and $85 for 1000 primers) or they could use those components to make 1000 rounds of perhaps 9mm (5 or 6 grains per round and one primer) and they can sell those 1000 rounds for 40¢ per round then that is $400. Not sure what the relative profit margins are, but I'm betting it is higher on the ready to use ammunition
You are spot on. Ammo manufacturers are going to get paid for the value they add by assembling the components into ready to fire ammunition. I work in a completely different manufacturing industry but can relate that the same concept applies to our pricing and margins as well.
 

BugI02

Grandmaster
Rating - 0%
0   0   0
Jul 4, 2013
24,647
149
Columbus, OH
I knew an engineer for Ford who told me once (a number of years ago) that it cost the company about the same to make a Taurus and a Navigator, about $18k

He said they could sell the Tortoise for $21-24000 and they could sell the Navigator for $50k+, so which one did I think they would produce the most of
 

Ark

Master
Site Supporter
Rating - 100%
13   0   0
Feb 18, 2017
3,389
113
Indy
The article pretty much sums it up. Ammo is a cartel, all components come from the same two companies, there are massive barriers to entry, and they are currently reaming us and collecting the highest profits in the history of the business. They'll never let 2017 happen again. Who needs production when you have price hikes?
 

guardman7

Plinker
Rating - 0%
0   0   0
Jul 19, 2011
3
1

Suggestion is that inflation provides a cover for price increases that are actually going to profit. And we're paying the prices. Perhaps it's time to stop buying, and to let the inventory build up at the factories.
Yeah but you’ve got a bunch of scabs and newbies who are still going to pay the prices. We need a few more manufacturers, less monopolies, and to bring those east bloc primers back
 
Top Bottom