AMMUNITION COST? Who reaps the windfall profit?

Primarily the flippers selling online.

Scalpers.

Manufacturers and wholesalers are making a higher than normal profit right now. But they also know that the bubble will soon burst and when it does things are going to be lean for many years. Most of the ammo sold in the last 10-12 years isn't being shot, but hoarded. When ammo becomes readily available there is probably a 5-10 year supply sitting in folks basements.

Local gun stores are hurting. Even though they have in many cases gone up 3X or more on price they can't make money if they don't have product to sell. I don't really blame them for charging $30 for a box of 9mm that I could buy for $8 a couple of years ago. They are still making less money and have bills to pay to stay open. I'd rather see them make a larger profit on less merchandise than sell it for $10-$15 per box to scalpers who resell it for $50.

The people on auction sites selling the products for at least 5x more than they paid for them.

the cost of everything is going up, no one is really making much more of a percentage than usual unless they had tons of materials in stock they bought at real low prices. But they probably didn't as no one really could have predicted the peak demand in 2020.

When the retailer will sell the ammo for a small increase that amounts to the total increase to the average customer but limit quantities it seems reasonable. The flippers that put it on GB or such for 3X or more that price those are the ones we can blame for the stupid high prices that are not the actual retail price charged. Just stop buying if not absoutly needed and soon the prices will return to normal plus a small cost of materials increase. Just sayi'n.

300% increase? Not from ANY reputable seller; maybe from some scalpers and flippers. it is not from the mfgs, wholesale or retail folks.

Manufacturers and wholesaler/distributors normally have long term supply contracts with each other in place with fixed prices (possibly with terms to address future base component price fluctuations). They usually don't see huge swings in prices. Where we do see changes in prices starts at the retail outlets. They have a known fixed dealer price during normal times and can price up or down (sales, coupons, etc.) as they see fit to match customer demand. When we have a run on products, the retailers soon run low and even with higher prices may not be able to keep inventory. Going back to your wholesaler or distributor ans asking for more likely isn't going to gain you much since they usually have the majority of their pipeline already contracted. Whatever buffer they kept for new business will be absorbed almost immediately. The people who end up making windfalls are those retail level folks who already had large supply contracts in place and are willing to mark up and sell away from their traditional customer based. A lot of these places end up in financial ruin when the market rebalance itself if they make a mistake timing the end of the panic. We saw really good examples of that with ammo and gun makers in 2017-2019. The cycle will eventually repeat.

None of the above. The prices of everything are increasing, including the making of ammo complements. It’s not any more profit it’s just more expensive. Scalpers are probably making the most.

Think it was yesterday I posted that Midway had 5.56 IMI ball penetrator for something like $0.82 cents each in 1200 round cartons. Yeah, found it Midway 5.56 IMI Ball Penetrator. Everything has gone up. A $3.00 2X4 8 foot stud is now a $6.00 or more board. America's needs move by truck and diesel fuel as well as gasoline have gone up. Everything is going up with raw materials not only going up but hard to find. Here in the US corporate taxes have also increased. What I see is depression followed by recession.

Ron

I work at a local gun store and see the actual invoices. Some of the distributors and wholesalers have raised prices on ammo and firearms significantly. For example, we have received less than 100 50-rd boxes of .380 ACP since early last summer; the bulk of it from a smaller regional distributor. The price for the 10 boxes we received in April was over $60 per box of 50 rounds. We charged $69.99 with a one box per day per customer limit. The supply lasted two days; most purchased by gun owners have no ammo at all, or, want to go to the range and want to replace the 50 rounds used at the range. The big box store are receiving inventory, likely direct from ammo manufacturers without sky-high wholesale prices and selling it for close to pre-pandemic prices. That supply is usually snapped by retail customers within minutes of it being placed on the shelves. Although we have accounts with almost all of the large national distributors, we have received very little ammo from them since mid-summer. There is just too much demand and not enough inventory to satisfy the demand. Consequently, some businesses within the supply chain are taking the opportunity and charging whatever the market will bear.

George P said:

it is not from the mfgs, wholesale or retail folks.

Click to expand...

Well, I know of a bunch retailers that have ammo marked up 200%-400% over "normal" prices. They buy it from individuals at inflated prices just to have something to sell and have to raise the prices to make any money. Hard to sell guns when there is no ammo to go with them. How do I know? I have customers walk out on me every day without a firearm because I have no ammo to offer them.
If they do get ammo from a distributor, it's so infrequent that they mark up the price to make up for the fact that they don't have it there on a regular basis...or put it on gunbroker and let bidders drive the price up.

The last guy before the end user.
I sold a bunch of factory ammo and made a ton of money off it.

It's the flippers who grabbed it up early making the big money on ammo. My shop is selling it just over cost in order to keep the range going.

The ammo I sold was between 22 years old and 3 yeas old.
Bough some when retailers were trying to give it away in 2018.

bullpup-addict said:

. . . profiting the most from the sale of ammo?

Click to expand...

You would need balance sheets from all the companies in the supply chain, from mines and smelters to FedEx and UPS, to figure that out. I can say from experience that manufacturing is often a surprisingly small fraction of the cost of an item, with materials and shipment of materials ending up larger that you expect.

bullpup-addict said:

. . .
but I don't see the justification for such a high increase. What am I missing?

Click to expand...

You're missing the concept of a Market. Prevailing prices are not a moral statement to be justified or condemned, they are the aggregate of all the market participants' best guesses about supply, demand, and availability, today and on all future days.

If you buy a widget today for 3x what it cost 2 years ago, you are guessing that it's worth that price to you, today. Ditto for every other participant, who offers for sale (or not), or purchases (or not), a widget.

None of the above.

Commodities speculators will reap the biggest reward and Scalpers would be a distant second.

Everybody involved except the buyer.

I could care less how high priced or non existent ammo gets, I make my own and have enough components to last a couple decades at least.

Bill

The real profit will lie with those who are sitting on piles of ammunition in their basement the day some sweeping anti gun legislation is passed.

I picked 5 because you didn’t have an all of the above button

As an aside, the prices are high because of scarcity. The scarcity is because of (remember?) a global pandemic. People have been forbidden from working by governments around the world. And these workers are what keep our supply lines open.

As we speak, I read that gas stations could run out of gas this summer. Not because of a shortage of gas, but because of a shortage of truck drivers who drive the tankers.

And that, because of the pandemic. When demand for gas plummeted, many drivers left the business. Now there's a shortage of drivers. https://www.wpxi.com/news/top-stori...e-driver-shortage/EXEEXYY2AJE4ZMQER2DUEAE7BE/.

But, as workers (and drivers) get back to work, supplies will pick back up. Newbie gun buyers will own a comfortable quantity of ammo and they'll relax.

I don't think the prices of shootin' stuff will ever get back to pre pandemic prices, though. They'll go down from where they are now, but not to where they were.

If my LGS is any example, they're not sharing in the riches.

I went there to do a transfer to an out of state buyer, and they had zero ammo in the place, and only a few guns in the entire store.

Went back a few days later to have a lower shipped out of state and they had about ten 250 round boxes of Aguila .22's they were selling at $20 a box. Not getting rich at that reasonable price for the current times.

I inquired about selling a revolver through them, they said it would sell fast if I included some ammo with it, which they didn't have.

Sad to go into a store with no inventory.

Ammo is not a bit different than any other item that transacts everyday in this economy - if one thinks that the currency is worth more than the item, the item does not get purchased. In turn, if one thinks that the item is worth more than the currency, then the item gets purchased. AND, both parties have to agree on the transaction (the exception being taxes).

It's clear to me the people who have managed or owned businesses vs not. Anyone who has run a business that relies upon commodities or products to stay in business knows that times like right now are actually not great for those who rely upon retail sales of ammunition to make a profit. Stores profit from turning over inventory and when you're competing for scraps of inventory it puts you in a very precarious place. Many can't even get the inventory they need to continue to profit off sales and they are having to make much larger cash investments to even capture that inventory. If someone thinks is a good time to be in the ammunition retail business they are sadly mistaken. For scalpers selling small amounts for large profits its a bit different because they don't have to pay to keep the lights on and people employed despite having empty shelves and very little inventory to turn over.