Gun, Ammo Market Predictions

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cmccmc

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If you are a dealer and a customer you already know the state of Ammo and Gun sales. If you want something cool and don't luck up and find it before your competitor does you will have to do without that Springfield XD or Glock 23. Forget it if you want any of the "Holy Grail" items. 223 ammo or heaven forbid and actual Black Rifle that will cycle the holiest of holys.

DPMS is a year out on orders if you want a stock rifle. Other manufacturers are not much better. Pistol manufacturers are shipping insignificant quantities that are causing fist fights between distributor sales associates! (Jk) I went on to one of my distributors websites and did a search for in-stock inventory of handguns. No other limiting factor. They only had 70 types of pistols/revolvers in stock. That is it. Taurus, only had 4! Zero Springfield. Only 10mm Glocks.

And Ammo... ha!

No 9mm, No 38sp, No 380, No 223, No 7.62 x 39, No 357, No 327, No 32 H&R, No 32 acp, etc, etc.

The Market is already reacting in the way you would expect with a shortage. Hoarding and Gouging. The next step will be a massive de-valuation of the hoarded surplus that is on hand. If you have 7 black rifles and expect them to continue to be worth $1000 + you will eventually be proven wrong. There will be a glut of ammo and firearms on the market eventually. Econ 101 suggests that this will cause prices to fall.

This is not good for our industry. In effect, we will have a market correction. There will be no "bailout" for this industry! In fact, while we deal with the consequences of our actions we will be bombarded by our political foes that will exploit our weakness.

So how do we correct this? We can not count on the individuals that would hoard and gouge to correct their behavior, but what can happen is the industry scales up to meet demand and scales down when the "Obama Surge" is over.

The problem is that if your charge is the fiduciary health of say DPMS or Winchester, you have a hard time spending money to scale up production in a political climate that could collapse with one fell swoop if another Columbine or VA Tech incident happens. How do you justify millions in expansion dollars if it could be pulled out from under you tomorrow?

I believe the answer is you just have to. Failure to meet demand places dangerous pressure on and already weary market. The effect of which is basically we becoming our own worst enemy and doing the work of the Anti-gun left for them. Or at least weakening us against their attacks.

So, my suggestion to the DPMS's and Winchester's and Springfield's of the industry is to expand capacity and deal with the devil you know rather than the devil you don't. It's the gun business, we are used to damned if you do damned if you don't decisions... but not ones that result in fratricide!


Ben Cook, Co-Owner
CMC Discount Guns
Pageland, SC
 
You know, I haven't seen that many extra people at the range since this whole thing kicked off.

I'm only guessing, but I'll bet the amount of ammo sold is way more than what's being used, and that pretty soon (hopefully) everyone who's stockpiling is finally going to have "plenty".

What are ranges like elsewhere? Is anyone seeing a proportionate rise in attendance or is it mainly "all buy, no try"?
 
I have not noticed any increase in the number of shooters in my neck of the woods. Ammo is hard to come by, even at the expensive Gander MTN. Powder and primer availibility is also a bit low.
 
...pretty soon (hopefully) everyone who's stockpiling is finally going to have "plenty".

I doubt you will find any two people with the same definition of "plenty". As long as you have the specter of looming anti-gun legislation hanging over gun owner's heads, you will have this out-of-kilter supply/demand scenario.

Don
 
The Ammo buying craze seems to be slowing up in my neck of the woods.

The stuff that was selling out seems to be sitting on shelves a day or two more and they are not running out as much.
 
The bottom line is that people are hording. Its a self-perpetuating cycle. As people horde more, less is available, seeing less available makes them want to horde more.
I do not horde ammo. I keep around 100 rounds for each of my pistols. When I go to the range, I usually shoot 50, then go replace them. I like to have all 100 in case a friend wants to try one of my guns. That way my proficiency stays up and someone else gets some fun.
However, I find myself having to curve my range trips for the simple reason that I cannot find the ammo to replace what I would shoot at the range. Forget finding large amounts, I cannot even find 50 round boxes of .45ACP, .38scp, .357mag, etc.
This is I believe an epidemic in our community. And its going to have far reaching impacts. As people stop shooting their guns because they cannot get ammo for them, their proficiency will drop. Eventually we are going to have a generation who does not know how to use the guns they own. They will look stupid and paranoid, like video game junkies who wanted a pair of tricked out 1911's because Lara Croft had some. Or a short-barrel shotgun because they saw it on GrandTheftAuto. And not know how or why, or when they would or should use either. Sure we'll still have the people who know guns and how to use them, put who is the public going to see?
This could be the downfall of our gun culture. No longer are our parents teaching us responsible gun ownership (no offense to those of you who are teaching your children, good for you), video games are doing it for us.
Tying this back into the thread topic, ammo shortages are going to exacerbate this. Somewhere in the Bible it says roughly that for good reasons or bad, the Gospel was being preached and spread. For good reasons or bad, people are joining our gun culture. Now we need to help those who came into the room (so to speak) for "bad" reasons to learn responsibility and accountability. We can do this at our ranges by helping proliferate good gun handling, marksmanship, and most importantly, safety.
But we can also do this by going to the gun store and maybe not buying 1000 rounds of .45acp when 250 would probably last us a while. Spread the wealth and hopefully our culture will persist through the trials and tribulations of a society that is openly hostile to us right now.
 
Used to be that only a few folks bought cases of ammo instead of boxes.

Then prices started to go up due to metals prices and they bought even more and some folks who bought boxes started buying cases "just in case".

Supply suddenly drops due to the 20 fold increase in demand and folks who bought boxes and thought their buddies that just bought a case were nuts suddenly don't think they're nuts. Another group starts buying cases instead of boxes.

Along comes the banic and people who didn't even buy boxes buy a case. Hundreds of them. Perhaps thousands. Demand goes up another 20 fold, temporarily, and the shelves get emptier in some places.

Apply some of the same model to firearms and you see demand jumping over supply.

Do the manufacturers increase production to the point where they can meet all the demand? Of course not. They may increase production to meet anticipated demand after banic buying ends, but you don't invest all your profits in the ability to produce more than you can sell. You optimize your profit by matching to the sustainable demand.

Some folks will sub out some aspects of manufacturing so they don't have to invest capital in equipment, hiring and training. That way when demand drops they aren't sitting on a bunch of equipment they can't use and laying off employees they don't need that they've spent a lot of money on in training.
 
Even though everyone's idea of "plenty" differs, there still is a level at which a person will have "plenty", be it 1,000 rounds or 10,000 rounds - and once they get there, they'll stop buying.
 
"Some folks will sub out some aspects of manufacturing so they don't have to invest capital in equipment, hiring and training. That way when demand drops they aren't sitting on a bunch of equipment they can't use and laying off employees they don't need that they've spent a lot of money on in training."

Exactly, this is a "scalable" solution. Growing and shrinking based on demand. Century Arms was advertising at the shot show that they needed assemblers to help them with demand. They wanted folks with extra capacity to help them fill orders. That is smart.

Where is the "smart" thinking on the side of the ammo and firearms manufacturers? What is the wisdom of having so few companies being able to produce a quality black rifle receiver? I got machinists in my neck of the woods that would love the extra work. Probably wouldn't mind the ATF crawling in their butts for the license to manufacture either.

Magtech is making enough money that they took the month off for Mardi Gras. No lie. So you can't tell me that others can't cash in on the ammo crunch!!?!!

As a dealer, I am taking notes on who is helping me... and who isn't. Next year at my distributor shows and at the shot show... there will be answers to these questions.
 
Even though everyone's idea of "plenty" differs, there still is a level at which a person will have "plenty", be it 1,000 rounds or 10,000 rounds - and once they get there, they'll stop buying.

In a reasonable, rational society, or more to the point, a resonable and rational TIME in a society, this would certainly be the case. But our own self-perpetuating (read: ITS OUR OWN FAULT) paranoia has raised the "enough" level to a point where: a, its almost unreachable financially for alot of people; b, its affecting gunowners negatively, not only financially, but also in other areas, such as public perception ("all those nasty gun owners are stockpiling ammo"). The police could raid my house (given provocation, of which I do not give them. I am a law abiding citizen)and newspaper articles would call what I have a "stockpile" of guns and several thousand rounds of ammo. They won't mention that most of it is bulk, value pack bricks of .22LR (I have about three or four bricks). They just care that I have lots of ammo and guns, so I must be a deviant.
 
There's also the fact that frankly there are not a lot of good investments out there right now (confidence in the markets is very low, and gold and silver have no practical use). Frankly, my investment in guns and ammo is an investment in useful tools, a sport/hobby, and also has significant intrinsic value - as we've seen. In times of uncertainty, people rush to guns and ammo.

Whether the world/country recovers or not, my guns and ammo will retain and likely increase significantly in value and will always be useful tools.

The key is to not overpay for them now out of fear/greed.
 
The key is to not overpay for them now out of fear/greed.

That ship seems to have already sailed for many people.

While I agree guns are an excellent investment, I do not think ammo is . For one, its an expendable resource. You shoot it, and its gone (or it will cost more money to make it usable again for reloaders). While I believe guns will continue to appreciate, regardless of an Obama ban (with the exception of the EBR guns which will have to come back down to earth eventually), ammo should not.

With the exception of standard inflation for cost of materials, the factor that is driving this price increase in ammo is fear/greed buying. Eventually we, as the gun owning culture, will have to put our feet down, or risk not being able to enjoy our passion.

With all due respect, I think anyone buying EBR's and other guns likely to be banned are risking losing their shirts if things do not pan out the way we fear they may. Even if a ban does pass, there is no guarantee it will be permanent or stand up to SCOTUS scrutiny. And then a bunch of people are going to be stuck trying to sell a DPMS AR for 1300$ that is retailing for 850$. That should be good for the economy.
 
Magtech is making enough money that they took the month off for Mardi Gras. No lie. So you can't tell me that others can't cash in on the ammo crunch!!?!!

As a dealer, I am taking notes on who is helping me... and who isn't. Next year at my distributor shows and at the shot show... there will be answers to these questions

One really neat thing about this country is, if you don't like how others run their business, you can start your own.

Wow what a freakin concept.:what:

When you invest the time and money then you can make the rules.
 
While I agree guns are an excellent investment, I do not think ammo is . For one, its an expendable resource. You shoot it, and its gone (or it will cost more money to make it usable again for reloaders).

Many good investments are perishable/usable goods. The fact that ammo has a DUAL role is to a bonus.... Gold just sits there looking pretty. Ammo is the lifeblood of freedom and democracy, and can save your life.
 
and once they get there, they'll stop buying.
I bought 500 rounds of recently 5.7 X 28 because I bought an AR57 upper. I bought 500 rounds of 7.62 X 39 about 3 months ago because I was under 200 rounds of it. I also bought some primers about 3 months ago. I bought a lot of bullets when the price of copper just started to skyrocket several months ago. Other than that, I am not "hoarding". I have what I usually have laying around so I can shoot at the range often.
 
DPMS is a year out on orders if you want a stock rifle.

Dude, they were a year out three years ago. That is a very good and popular brand of rifle. In fact they have been well behind since NRA threw them the "Gun of the Year" Award.

No 9mm, No 38sp, No 380, No 223, No 7.62 x 39, No 357, No 327, No 32 H&R, No 32 acp, etc, etc.

Funny, I was at Walmart yesterday and they had all those calibers except for the 9mm and the 327. But they don't carry 327 anyway.
 
I agree with the OP as I have been saying this for the last few months. Right now people are freaking out and buying whatever they can - whatever they deem "bannable" and the industry is booming - guns, ammo are still flying off the shelves -

So one of two things will eventually happen as EVERY boom eventually busts - like the OP said, eventually people will reach their quota of whatever enough is - ammo and guns so that if a ban came down the Hill tomorrow they'd be content, or they reach the point to where they are so over extended that they decided enough is enough - and what will happen? Will that mean that once the boom subsides that people's overall firearm purchases will be lower than before the boom and the industry suffers? That so many guns flood the marketplace at a time when demand goes down driving prices down and the industry suffers?

We'd be naive to think that what we've seen happen to the impenetrable housing bubble or the tech bubble can't happen to us, and wouldn't all the Bradys out there love seeing the firearm industry suffer. That's why we need to calm down and use some sense, keep the industry and the sport healthy and not let this continued boom eventually harm us.
 
Its another bubble. I doubt even Democrat politicians will tolerate being ousted due to any gun or ammo bans/taxes. Its political suicide.

Market whether it be housing, stock, energy or guns/ammo are ruled by emotion as people are doing the buying and selling. People are emotional beings.
 
Economics: You're right, we're kinda kicking ourselves in the teeth.

Fine. I'll live with it. Why?

Because there is NO WAY that all the extra NICS checks and unbelievable purchashing is going unnoticed by those that want it to all go away. Especially given the current economic state of the country. I'm thinking it's a pretty good slap upside the head for 'em.
 
who wanted a pair of tricked out 1911's because Lara Croft had some.

Guilty!

While I agree guns are an excellent investment, I do not think ammo is . For one, its an expendable resource. You shoot it, and its gone

Guess I shouldn't stock up on food then also in case of emergencies. You just eat it!
 
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