Ammo Prices Are Going Up

[xsubsailor]

We just can't win 

Weak sales and a declining gun market increased the price of ammunition in recent months, and companies are gearing up for another price increase this spring, Bloomberg News reports.

After record sales in 2016, the gun industry is seeing declining purchases, and that downturn is steadily driving up the cost for ammunition.

“Shooting Sports recorded third-quarter sales of $286 million, down 21 percent from $361 million in the prior year quarter, as a result of persistent lower demand in the market for ammunition and firearms,” Vista Outdoor Inc CEO Chris Metz said during an earnings call Thursday.

Vista, which owns dozens of ammunition brands, saw profits decline 47 percent in 2017. The company raised ammunition prices once in January and plans to raise prices modestly in April. It expects competitors to do the same.

Other companies have noticed declining sales, and Remington Outdoor Co., one of America’s oldest gunsmiths, filed for bankruptcy protection Monday in the midst of the slump.

“There is no fear-based buying right now,” James Debney, CEO of American Outdoor Brands Corp., formerly Smith & Wesson, said on a December call with investors. Between 2006 and 2016, gun sales reached several record highs, if one measures sales through the FBI’s National Instant Criminal Background Check System.

 

http://dailycaller.com/2018/02/16/ammo-prices-are-going-up-heres-why/

[Dolomite_supafly]

Since when does a declining demand equate to increased value?

seems to me they are just chasing the same profits in a declining market. 

[gregintenn]

Give it a few days for congress to threaten gun control and the demand will magically reappear.

[GlockSpock]

Since when does a declining demand equate to increased value?
seems to me they are just chasing the same profits in a declining market. 

Since business leaders that make decisions have zero understanding of markets in general.


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[Hozzie]

Since when does a declining demand equate to increased value?
seems to me they are just chasing the same profits in a declining market. 

When that demand is still equal to or above the supply. Demand can be declining and still above supply.

[Grunt67]

Personally, I wouldn't put much money on what Bloomberg has to say regarding guns or ammo. He hates them both.

[DaveTN]

Companies that increased their production due to investing in more equipment now have that equipment to pay for during lower demand. But I doubt many ammo companies made that mistake; we all knew it wouldn’t last.

I’m still finding good prices on common ammo on-line. 9MM, 40S&W 223 & 308.

I just bought a .243 and that was a little harder to find a deal on ammo. But I haven’t checked the local Walmart’s in a long time. I liked it when members were taking pics of the Walmart prices and posting them here, but haven’t seen that in a while.

[No_0ne]

3 hours ago, Dolomite_supafly said:

Since when does a declining demand equate to increased value?

seems to me they are just chasing the same profits in a declining market. 

This works well for monopolies.  Ammo companies are, of course, not monopolies, however there are a limited number of suppliers, and it's enough of a niche market that it's not likely to draw competition from larger companies looking for market share. Ammunition manufacturing has always been a high volume, low margin industry, if the volume isn't there to keep profits up then the margins have to increase.

As for keeping profits up, or even increasing them, isn't that kind of the purpose of any business?

Edited February 16, 2018 by No_0ne

[GlockSpock]

This works well for monopolies.  Ammo companies are, of course, not monopolies, however there are a limited number of suppliers, and it's enough of a niche market that it's not likely to draw competition from larger companies looking for market share. Ammunition manufacturing has always been a high volume, low margin industry, if the volume isn't there to keep profits up then the margins have to increase.

As for keeping profits up, or even increasing them, isn't that kind of the purpose of any business?

 

Yes, but generally speaking raising prices rarely directly increases profits. When demand is lowered, raising prices generally would lead to even lower demand, thus decreasing profits even more.

 

It simply depends on how elastic or inelastic goods are.

 

 

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[tnhawk]

I've got a good supply of most of the calibers I use, however I need to increase my stock of 10mm, 357 and 44 before prices go up.

[Hershmeister]

This is called signaling- a manufacturer telling the public about their plans to raise price - the hope is their competitors follow


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[JAB]

On 2/16/2018 at 1:33 PM, Hozzie said:

When that demand is still equal to or above the supply. Demand can be declining and still above supply.

 

Many times I have said that I would consider the ammo shortage to be 'over' when I can walk into a Walmart and consistently see .22LR ammo on the shelves.  That has been mostly the case for the past, few months.  The real 'end' for me, however, was when I was in the Turkey Creek Walmart on Monday evening and saw that they not only had .22LR ammo on the shelf but that they had bulk packs of Remington, Winchester and Federal .22LR - shelves full of them - and the prices were more or less what they were before the shortage began (especially when we adjust for four or five years of inflation and natural, what would have been gradual, price increases.)  To put the cherry on top, I have been consistently seeing one or another type of .22WMR ammo on Wally shelves - including Winchester Super X (the original WMR load) that are still going for a bit over ten bucks for fifty.  For the past, few years WMR ammo has been a veritable leprechaun riding a unicorn while chasing a gryphon through the streets of El Dorado.  Consistently seeing WMR ammo - and often more than one type - on the shelves of Wally World is, to me, a sign that the ammo shortage - at least for common (and maybe slightly less common) - calibers has 'ended' (well, more likely hit a lull, I think.)

I know that Walmart isn't the be all and end all of ammo retailers.  However, like it or not they are one of the most prolific chains that sells ammo (they sell ammo in all of the locations of which I am aware, at least.)  Because so many people shop there and they tend to have pretty good prices Wally locations are also among the first places to run dry when there is an ammo scare and one of the last places to be completely restocked when the scare is over and demand goes back to normal.  Sadly, I don't expect this lull to last more than a couple of months before there is panic in the Sporting Goods department and people are once again going online and into Walmart, Academy, and their LGS to buy up every round of ammo, every box of reloading supplies and every Nerf dart they can get their hands on once again.

My suspicion is that many of those first-time gun buyers who purchased guns during the scare (because they thought they soon might not be able to get them) and purchased a lot of ammo either to 'stock up' or because they wanted to practice shooting have probably grown tired of their new 'hobby', put the gun in the closet or their sock drawer and gone back to collecting stamps or whatever.  Heck, some of them might even be helping to drive the new-purchase market down by selling off some (or all) of the guns they bought as well as some (or all) of the ammo.  In other words, I think that the high demand was a temporary uptick that was sometimes falsely inflated by guys who were buying everything they could get their hands on to resell at inflated prices.  Unfortunately, with the general ammo shortage coming so closely on the heels of the previous shortage that was pretty specific to .380 ammo, the industry has now seen how much of a boon such a scare can be just as the NRA learned long ago that allowing threats to our gun rights is good for their business model so I expect them to do all they can to 'encourage' such scares in the future - but only after they have raised their prices due to 'decreased demand' (and them raise them again due to 'increased demand' once the next scare begins.) 

Edited February 21, 2018 by JAB

[No_0ne]

11 hours ago, JAB said:

 

Many times I have said that I would consider the ammo shortage to be 'over' when I can walk into a Walmart and consistently see .22LR ammo on the shelves.  That has been mostly the case for the past, few months.  The real 'end' for me, however, was when I was in the Turkey Creek Walmart on Monday evening and saw that they not only had .22LR ammo on the shelf but that they had bulk packs of Remington, Winchester and Federal .22LR - shelves full of them - and the prices were more or less what they were before the shortage began (especially when we adjust for four or five years of inflation and natural, what would have been gradual, price increases.)  To put the cherry on top, I have been consistently seeing one or another type of .22WMR ammo on Wally shelves - including Winchester Super X (the original WMR load) that are still going for a bit over ten bucks for fifty.  For the past, few years WMR ammo has been a veritable leprechaun riding a unicorn while chasing a gryphon through the streets of El Dorado.  Consistently seeing WMR ammo - and often more than one type - on the shelves of Wally World is, to me, a sign that the ammo shortage - at least for common (and maybe slightly less common) - calibers has 'ended' (well, more likely hit a lull, I think.)

I know that Walmart isn't the be all and end all of ammo retailers.  However, like it or not they are one of the most prolific chains that sells ammo (they sell ammo in all of the locations of which I am aware, at least.)  Because so many people shop there and they tend to have pretty good prices Wally locations are also among the first places to run dry when there is an ammo scare and one of the last places to be completely restocked when the scare is over and demand goes back to normal.  Sadly, I don't expect this lull to last more than a couple of months before there is panic in the Sporting Goods department and people are once again going online and into Walmart, Academy, and their LGS to buy up every round of ammo, every box of reloading supplies and every Nerf dart they can get their hands on once again.

My suspicion is that many of those first-time gun buyers who purchased guns during the scare (because they thought they soon might not be able to get them) and purchased a lot of ammo either to 'stock up' or because they wanted to practice shooting have probably grown tired of their new 'hobby', put the gun in the closet or their sock drawer and gone back to collecting stamps or whatever.  Heck, some of them might even be helping to drive the new-purchase market down by selling off some (or all) of the guns they bought as well as some (or all) of the ammo.  In other words, I think that the high demand was a temporary uptick that was sometimes falsely inflated by guys who were buying everything they could get their hands on to resell at inflated prices.  Unfortunately, with the general ammo shortage coming so closely on the heels of the previous shortage that was pretty specific to .380 ammo, the industry has now seen how much of a boon such a scare can be just as the NRA learned long ago that allowing threats to our gun rights is good for their business model so I expect them to do all they can to 'encourage' such scares in the future - but only after they have raised their prices due to 'decreased demand' (and them raise them again due to 'increased demand' once the next scare begins.) 

Conspiracy, much?

[JAB]

16 hours ago, No_0ne said:

Conspiracy, much?

Conspiracy?  No.  A conspiracy would be if I suggested that the NRA and gun industry were actually BEHIND the mass shootings and similar incidences in order to cause customers to buy more/members to donate more due to fears of gun/ammo bans.  I am not suggesting that.  I am simply saying that, just as the media uses such tragedies to generate ratings and just as anti-gun politicians use these tragedies to push for further loss of personal liberty the gun/ammo industry and the NRA will take advantage of tragedies and the rhetoric from the aforementioned anti-gun politicians in order to feed gun owner's fears so they can drum up more business/donations.  Heck, the NRA pretty much called for a ban on bump stocks but you can guarantee they will fret how all of our gun rights are under threat due to such bans in their next propaganda mailer.

Now, I would not be at all surprised to find out that the NRA and possibly the gun industry contributes to the campaigns of anti-gun politicians.  Those folks are good for business, after all.  They don't call Obama the best gun salesman of the last, several years for nothing.

Edited February 22, 2018 by JAB

[tacops]

On 2/16/2018 at 1:02 PM, gregintenn said:

Give it a few days for congress to threaten gun control and the demand will magically reappear.

BINGO.  So with the new push for legislation I decided maybe I needed to go ahead and order more now before the prices get ridiculous again.  I thought I better check inventory to decide what I might need.  After completion of inventory I decided to just forget it, I'm good. 

[Wingshooter]

I’ll probably pick up some more powder. Hopefully this will blow over quick.

[10P8TRIOT]

Always smart to buy on a regular basis as the prices are dropping. Prices are currently at or below pre-Obama levels. My February purchases include a 5000 round case of Aguila 22LR at 3.8¢/round delivered (from OutdoorLimited) and a 1200 round case of IMI 5.56 M193 at 24¢/round delivered (from Midway). I don't know where ammo prices are going ... and I really don't care. I've got enough stash to outlast the next gun-grabber induced ammo hysteria.

[TripleGGG]

BINGO.  So with the new push for legislation I decided maybe I needed to go ahead and order more now before the prices get ridiculous again.  I thought I better check inventory to decide what I might need.  After completion of inventory I decided to just forget it, I'm good. 

Don't you just love when you have more than you thought. I'm constantly buying and putting back. Doesn't take long to be good to go for anything.

[bersaguy]

I have been looking for a good buy on 380 ammo recently but it seems to be holding higher than the other popular calibers. I have shot some and would at least like to replace what I have shot which would fill my ammo safe back up.

[10P8TRIOT]

6 hours ago, bersaguy said:

I have been looking for a good buy on 380 ammo recently but it seems to be holding higher than the other popular calibers. I have shot some and would at least like to replace what I have shot which would fill my ammo safe back up.

SGAmmo has Fiocchi FMJ at 23.5¢/round (including shipping). Not a great price, but decent.

https://www.sgammo.com/product/fiocchi/1000-round-case-380-auto-95-grain-fmj-ammo-fiocchi-380ap

[A.J. Holst]

Aim Surplus has been a good source for my fmj ammo; .223, .380, 9mm.

Have also picked .303, .30 carbine, .38/.357, and 7.62x25 at competitive prices.

[bersaguy]

2 hours ago, 10P8TRIOT said:

SGAmmo has Fiocchi FMJ at 23.5¢/round (including shipping). Not a great price, but decent.

https://www.sgammo.com/product/fiocchi/1000-round-case-380-auto-95-grain-fmj-ammo-fiocchi-380ap

Thanks for the tip on the Fiocchi Ammo but I bought a case of it about a year before the panick  buying started and got it at a very good price and I still have about 3 boxes left of it and I use it only for range ammo because about 1 or 2 rounds in my 15 round magazines fails to fire and I have to re run it through sometimes 2 or 3 times to get it to fire  and some never fire so I won't be buyng any more of that brand of ammo.