I received the following note from frequent contributor D. –
Various calibers of ammunition are now starting to make an appearance on the marketplace. (Natchez Shooters Supply, Midway USA, etc)
Most are still selling for 3 to 4 times the pre-panic pricing.
Unless you would like to forever pay an extortionate price for ammo, I strongly suggest, WAITING!
If you can hold off on your purchases until prices fall to below $.50 a round (in 20 round quantities) you will send a message to the manufacturers and retailers that you will not abide by such pricing.(This is still pretty high, Tracer was selling at $.50 a round before the panic)
The longer that panic buying continues, the longer that prices will remain high and the higher the eventual price will settle to.
We made these people a lot of windfall money, let them show their thanks to us by reducing prices to the pre-panic pricing levels.
The fact that ammo is finally appearing demonstrates that they are catching up to demand. Let the warehouses fill up and prices will fall.
DONT BUY OVER PRICED AMMO!
I tend to agree with D. I wonder if we will ever see “normal” prices again – especially if companies start raking in the profits selling at an inflated price – and people buy. I am guilty for buying .223/5.56 and some .22LR at these inflated costs. I bought to replace rounds used during practice – but at prices well less than some of the ridiculous prices once asked.
I have no plans to “stock up” at current prices and agree that patience will pay off in the end.
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Supply and demand economics – when the supply is limited and the demand is high the cost of goods will escalate. The trend probably started about 10,000 BC when our ancestors started realizing they had stuff their neighbors didn’t and could demand something valuable in return.
Although the post doesn’t keep harping on the recent “price gouging” theme, there are still a lot of folks who feel they are getting taken to the cleaners. Two thoughts on that.
First, if your store has been selling 10,000 widgets a year at $5 each you have an expected cash flow from widgets of $50,000 per year. You base your store size and payroll on that figure. If the manufacturer tells you that he is only going to ship you 5,000 widgets next year you have to make some drastic choices – reduce store size and fire staff or raise prices to continue to support your exisitng expenses. Since it’s easier to print new price stickers than to fire somebody who has worked for you for years and whose family picture you see everyday, the prices go up.
Second, if you have been buying your widgets for $4 each and selling them for $5 you have $1 in profit to pay your expenses. If the manufacturer raises the cost of widgets to $6 each you immediately have to raise your prices to $7 each in order to secure sufficient funds to replace the widgets you sell and pay your expenses. Even though you bought the widgets in stock for $4 each, it now cost $6 to replace each one you sell. If you are only getting $5 you do not have sufficient income to pay your expenses and replace the widgets. Again, the choice is simple reduce the number of widgets you sell, reduce expenses, or raise prices. Raising prices is the only solution which keeps a retailer in business.
So, is the ammo actually over priced – maybe, maybe not. Many retailers often have a lot less control over their prices than you might think. And, if you boycott them simply because they are reacting to forces outside of their control they will quickly go out of business. That scenario will eventually leave one place to buy stuff – Wal-Mart. Try boycotting Wal-Mart and see how far you get!
One possible (though erratic) solution is to keep tabs on the local buy/sell newpaper (Greensheet, Wooden Nickel, or whatever is in your area). Estate sales, garage sales, etc are good places to pick up guns and ammo from folks who may not be aware of the current prices. You may get a weird mix of stuff, but if all you are doing is plinking the quality shouldn’t matter.
Some of the vendors are definitely gouging. I have been buying ammo for about a month now, but only by watching the prices and grabbing it when it is a good deal. Remington put out a bunch of 22 LR last month and it was a shock to see the difference on prices. For the same 525 round brick of ammo, Cabelas was getting $23.99, while Surplus ammo was asking $159.99. Surplus Ammo still has it in stock for $159.99. I purchased three bricks from Cabelas. Remember, these prices will probably not last for ever and support your vendors that are not gouging people. I will never buy anything from Cheaper than Dirt again. Their price today for a 100 rnd box of CCI min-mags is $60.
I agree to all the statements above, but I suspect the munitions manufactures are partially to blame for allowing the DHS to control there production quotas at the cost of supplying those who have been purchasing from them over the decades. The DHS blank purchase orders where a windfall for them and so they became a part of the Obama machine by catering to there agenda. It is what it is. On a moral level they should have seen what was going on and not been led down the marry trail at a cost to us.
I have suspected for awhile now that the Walmart workers at the ammo counter are putting a little extra cash in their pockets by calling their friends as soon as some ammo comes in. I was at our local Walmart the other day when a guy came in and told the girl behind the counter that so and so was holding some ammo for him She told him they were not supposed to do that, but opened the counter below the cash register and sure enough there was a couple of boxes of 380 tucked away for him. She pulled them out and sold them to him.
Have seen .223 for as cheap as 30 cents per round recently so getting better but still a long way off of where you could get it for 20 cents per round in 1000 round quantities. 9MM is still way too high but some of your local gun shops will have it for $15.99/50 rounds or just over 30 cents per round. Have not seen any 9MM online that cheap.
When – I hope – it gets back down to the former price ranges I plan on stocking up even more as will not take much for some other event to see it go shooting ( no pun intended) back up !
I truely do understand all that supply and demand math, that almost put me to sleep.
The bottom line is BS prices like mentioned above(JAS)on a brick of .22 going from the $20’s to $159. I have seen a lot of this nonsense. There is NO WAY that the materials, labor, etc from the manufacturer have risen enough to justify a sixfold increase in prices, either wholesale or retail. Think about that! A brick of .22 now costing what you could buy 500+ rounds of .223 for pre-panic!!!! That is just CRAZY. If their greed is that extreme, perhaps they should be out of business, just like the corrupt banks that should have been allowed to fail instead of bailed out to screw us again. The insane housing market prices spiriled up this very same way…because people where stupid enough to pay the constantly ridiculas asking prices with loans they couldn’t afford. The end result screwed us all! Market driven yes, but WE are the market..enough is enough of being manipulated and robbed,and four to sixfold increases are robbery!. I can’t wait to see the prices on primers when they become available. This (primer availability) event is probably the correct time to resume buying.(steam rising from keyboard) Can you tell that I feel strongly about this??? Regards, D.
If one has the time to shop around, on the internet, there are still reasonable buys on ammo to be had. Just last week, I got some 7.62×39 at The Sportsmans Guide for about 60 cents a round. Not great but not gouging either. Within a day or two, it was listed as sold out. Gotta keep your ear to the ground these days.
Congratulations on your understanding the concept. Unfortunately, not everyone does. Sorry if I bored you; old guys need a nap every now and then anyway so nothing lost.
First of all, my comments were more intended to explain the dynamics of the local Mom and Pop stores, not the giant retailers. I’m not sure where you were going with the banks and housing industry as it’s not even in the same league much less ball park.
JAS comments also serve to prove my point, though in a different way. Buying power of a retailer affects the prices they pay the manufacturers and, thus, the subsequent retail prices you and I pay. Cabela’s has 40+ stores and sells about $3 billion a year (yes, I got that from their investor relations info). Surplus Ammo has one store and probably doesn’t sell in total (all products) an amount equal to what Cabela’s sells in just ammo. Do you really believe Surplus Ammo could compete with Cabela’s in a head to head? Cabela’s has the ability to take a loss on an item to attract customers into their store, Surplus Ammo probably doesn’t.
Neither you nor JAS nor I know when the current batch of ammo was ordered by Cabela’s or what their purchase contract stated insofar as delivery of product versus cost of goods. Many larger retailers place multi-year orders and the prices are set long before the product is produced. That’s one of the ways the big boxes manage to beat up the little guys on prices. Even I prepurchase diesel fuel 6 and 12 months out so I can lock in prices lower than what will be at the pump.
I have several friends who do nothing but sell ammo (on line, gun shows, wholesale, etc). They are all small time compared to Cabelas or Wal-Mart or even Surplus. I know for a fact that the prices they pay the manufacturers have risen dramatically. I’ve seen the invoices, so it’s not a guess. They were charging $900, $1,000, and even $1,200 for a box of 1,000 .223 because that’s what it took to cover the cost of the ammo and provide a minimal profit. They weren’t gouging their customers or screwing anybody.
Are the manufacturers playing the market – maybe, maybe not. That I don’t know. I own shares in Smith & Wesson Holding Company. The value of the stock has risen about 35% in the past year, so they are definitely making money. But, that rise in value isn’t anywhere near what I would expect from price gouging and customer screwing.
As I noted previously many smaller retailers don’t have a lot of control over the prices they have to charge if they want to remain in business. It seems to me that it is very petty to use that lack of control as a determination that they are bad people and should be driven out of business.
Now, did CTD take advantage of the situation? Most definitely, but that’s how they’ve always done business so it shouldn’t have been any surprise.
Your right, D is right. I have gone through this before and understand the idea of demand, supply, and value. There were many retailers and companies out their that took advantage and artificially inflated the prices -which then created the PANIC buying – which created more demand and inflated pricing. One of my local gun shops put a limit on ammo and throughout the panic buying kept the same prices (within 20%) as before panic buying as well as supply. Yes – they kept .22LR, 9mm, and 5.56 – and sold at regular prices while other shops were selling 3x their cost.
To me, it all boils down to ( gouging or not)- “are you willing to pay a higher price for ammo than you think you should?” I am not, and so will not buy any more ammo until the price drops. Do I have ammo put back? Maybe. . . Being self-employed, I learned a long time ago that when things are going well, put it away for a rainy day. . . . always plan for the future.
OK Let’s try this. Components of a metallic cartridge:
Primer with a hammer and anvil and initiating substance (also the tooling to make those parts and processes for the chemical).
Brass case (metals, tooling and annealing processes)
Powder (chemicals involved in nitro-cellulose production, labware and processes), Bullet (composite metals, plastics and swaging tooling)
Other considerations: labor, facilities rent, power, water, trash, maintenance,packaging and printing, insurance and transportion of product.
Aliens have not stolen one of the critical compounds used in powder or primer production, thus causing a criticle shortage.
Bloomburg has not acquired the patent or licensing for one of the processes involved in production of the metallic or chemical components and refused thier useage.
The Chinese have not bought up all of the Brass, lead or copper thus causing a critical shortage.
The teamsters, International union of bullet casters or ammunition box printers of America have not gone on strike demanding double wages.
Given all this: We are left with much fewer variables as to why prices shot through the roof and remain high months later.
DHS contracts wiped out the stocks and monopolized the production capabilities of ALL of the manufacturers of ammunition. Some how I am having difficulty with this. I seem to recall reading that the numbers involved are a drop in the bucket of the annual quantities produced and consumed by the shooting public. They are also somewhat subsidized by the military contracts and we are supposedly in a draw down.
Manufactuerers reduced output in anticipation of a gun ban that would have severely reduced sales.Stock idle in the warehouse costs money.
The gun owners and shooters went into a panic and bought up three years stock in three months, emptied the warehouses and strained production to breaking point. Something I am sure happened. (During this period manufacturers,wholesalers and retailers saw a theoretical profit increase of 1200%, providing a serious buffer for the lost sales caused by the lack of stock and production meeting demand) Yes, Yes pre-delivery pricing etc, etc, but that does not equate to 4-500% price increases over years of time let alone months of incremental cost increases.
Yada, Yada , Yada…given all this please explain why, who and by what means prices are still through the roof. Also how is the consumer to apply pressure to reduce prices if not by refusing to buy at those prices from the retailers? I feel for the mom and pops, I have been one,but If they cease to be retailers, the wholesalers have fewer outlets to sell to, and also feel the pinch and perhaps also fail, reducing the outlets for manufacturers thus hurting them. I just do not feel that the consumer should just “Take It!” because the retailer has been hurt by the wholesaler, who has been hurt by the manufacturer, who has been hampered by the Alien abscondtion of our lead.
But I guess this too shall pass. D.
Been shopping around for deals, used ‘Ammoseek.com’ & ‘BulkAmmo.com’, have found reasonable prices and actually bought from dealers that I was unfamiliar with prior. Agreed, prices are elevated, however, consider this: How did we get to this point in the first place (Read – When’s it going to happen again. You’re kidding yourself if you think you’ve seen the last Columbine, Sandy hook OR politician with an agenda). Maybe next time, we lawfully citizens won’t fare so well. Spend smart, remember the MANY buisness owners that have stood with firearms owners and against price gouging, but also be smart and plan for tomorrow – today.
The real question is how much is a retailer gouging versus passing on increased pricing. The problem I have is that one retailer will say they are paying more, but another retailer will sell the same box of ammo for less. Example: Independence 5.56 Blue and White 20 round box. 3 single store retailers get it in stock the same week. Store 1 sells for $8 per box, Store 2 for $13.99 and store 3 for $14.99. Store 1 is the smallest of the 3, but the one I trust most for not gouging. Store 1 is the one to get my future business!
Had job as armed security in California + 9mm ammo 5 minute shelf life = no job! Don’t have ammo cant train or do my requalifications like Bureau of Security and Investigative Services of California licenses us to do. Which means no revenue for California 🙂 law enforcement complaining of low ammo and now the new laws of having to have permit for ammo. Career change, yay !
I still have over 3000 rounds of 9mm-Hydra-Shock JHP’s & I’m not going into anymore details then that. But I will say that I should thank my Uncle for enlightening me before prices went up & I stocked up heavy….Real Heavy ! on everything else.
On the Lighter side I should be comming into NEW TECH., of interest to all that are concerned about high gas prices soon & the ability to have an unlimited supply of it WTSHTF really happens !
I give WTSHTF about 5-10 more yrs. unless there is a drastic upheaval before then. So be looking for my postings sometime after the 4th of JULY about How to have Unlimited Bug Out Fuel
( Before, During & After ) When The Shit Hits The Fan. If you use my method you can start stocking up now & you’ll be ready incase.
Just picked up 100 rounds of 5.56 55 grain FMJ for $49.95. 2 weeks ago, it was $59.95 and a month before that, it was $69.95. Prices are coming down, slowly. As far as Cheaper Than Dirt goes – I’ll never, never, ever buy from them again.
I was away for a little while with no access to my computer, so I am late joining the discussion. First off, I want to thank Harry for his economic example. Although I have a basic understanding of “Supply & Demand”, I thought his Widget comparison was most insightful. I am certain that some ModernSurvivalOnline readers benefited from this information. I am somewhat skeptical that a boycott will actually work. Realistically, if everyone that follows this site, refused to buy bullets at current prices, it would have no effect on the overall situation. Panic purchases continue. We would only be putting ourselves at a disadvantage in that we did not get ammo while it was available. I am not advocating that anyone pay the grossly inflated prices of a dollar for a .223 REM round, or 50 bucks for five hundred .22 Long Rifle. There are some “Middle Of The Road” solutions, if you look around. Who knows what the immediate future holds? The prices that we deem “too high” today, may be super deals 6 months from now. Any number of crisis or disaster situations could make ammunition totally unavailable. That’s why we are united here, right? We are expecting that something really bad is going to happen. Again, I would not recommend the purchase bulk ammo (more than 1000 rounds) at the current inflated prices. I would advise getting some bullets while they are available. If I am wrong, you end up with more ammo. If I am right, you may regret not obtaining bullets while they are still around.
Rourke (And others), while I understand the resentment at CTD for raising prices, discontinuing certain products,Repeatedly sending ‘In Stock’ notifications (and reaffirming availability via verbal conversation with Customer Service before AND after placing orders)repeatedly accepting orders(and my cash) sitting on my cash for several days then canceling the order – THIS REALLY HAPPENED(Jan-Mar 2013). Set all of this aside, UNLESS you’re growing money trees in your back yard(or have an oil well), you simply CAN NOT afford to overspend on necessities be it groceries, gas or hi-cap mags. Sure it stinks, but Hold your breath and make the purchase…if the price and quality are there. Obviously, it’s my opinion. Be smart spend smart – its only TCB (Business).
How about overtime cost at the manufacturing plants? Since demand went up that far, I have no doubt the manufacturers increased production (more production, more profit). Increased production was probably preceded by increased equipment purchased to increase production lines and increased overtime for staff to make more. Metals prices have gone up, too.
While I see $160 for a box ridiculous, there has to be someone paying that much for it or else it sits on the shelf. I say good luck to Surplus Ammo selling it for that. If they find someone to pay that, they probably deserve the money more than the buyer.
I certainly don’t begrudge a company trying to make a profit, but I won’t be one to contribute to ridiculous profits and will continue to be a patron of my usual local shop that sells for a regular price when they can get it in.
And as for saving some behind the counter for a regular customer… that’s how you keep your good customers, by doing them a favor on occasion.
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