In stock ammo increase???

[bass806]

I order my CCI 9mm ammo from Natchez. Good service, fast shipping, generally good prices. They had 9mm CCI for 7.99 a box with a warning that CCI ammo will go up 4-1-09. In your shopping cart you can check and see how much is in stock. Yesterday it was approx. 20,000+ boxes for 7.99 per. Today it went up to 8.49 a box. Stock status shows about the same amount. Do most dealers add the manuf. price increase to in stock items? This seems to be a $10,000 profit for Natchez, as they already had the ammo in house. Am I missing something???

 

[takhtakaal]

It's rather common in other retail industries to mark up existing stocks according to current prices, rather than what was actually paid. I can't vouch for ammunition, but I can imagine that they would do this quite readily.

 

[redactor]

1. There's nothing wrong with profit. Businesses exist to make profit, not to let you shoot more. I refer you to the excellent book by Dr. Thomas Sowell "Basic Economics."

2. Yes you are missing something. When Natchez sells out of those 20,000 boxes, they have to pay to replace them in their inventory at a higher cost.

 

[jnyork]

It's their store, they can price their items however they want. Capitalism at its finest.

 

[Pilgrim]

The same heartache exists when a gas station raises the prices of gasoline in his tanks he has already paid for because he is anticipating an increase in future deliveries.

He has to pay for the increased cost of his supplies with something, so he does it by increasing the price of what he already has in stock. This is not gouging. The dealer is just trying to stay in business.

Pilgrim

 

[Im283]

I am pretty sure a lot of business do this. I am in the liquor business and when we get a price increase our existing stock reflects this price increase. Same thing gas stations do.

I am sure ammo is no different.

 

[moe.ron]

Gas, booze, and ammo...lot of daily staples right there!

 

[lonegunman]

1. There's nothing wrong with profit. Businesses exist to make profit, not to let you shoot more. I refer you to the excellent book by Dr. Thomas Sowell "Basic Economics."

Sure business should make a profit. They were making a profit on ammo at $7.99 and now they are making an unreasonable profit on ammo at $8.49. Just like ticket scalpers and those guys who take advantage of hurricanes, everyone likes profit.


2. Yes you are missing something. When Natchez sells out of those 20,000 boxes, they have to pay to replace them in their inventory at a higher cost.

This is an irrelevant argument. The new ammunition will be purchased at a new price and marked accordingly with normal profit intact. No money will be lost or expense incurred with "new ammo".



More than a few vendors in the shooting world exploit scares, raw material price hikes and congressional threats to jack prices for no reason other than to take advantage of their customers. Ammo is not scarce by any means.

Raw materials and transportation make up only part of the cost of make the increase. I happen to think the rest is ammunition makers piling on to take advantage of worried consumers and extract dollars for no reason other than basic price gouging

 

[moooose102]

yup, the fleecing of america, nothing any one of us can do about it. it takes a group of people to take a stand, make a big stink, for a length of time for anything to change. as for the gasoline thing, i have a cure, but i would probably be put in prison for putting it in writing.

 

[SammyIamToday]

Sure business should make a profit. They were making a profit on ammo at $7.99 and now they are making an unreasonable profit on ammo at $8.49. Just like ticket scalpers and those guys who take advantage of hurricanes, everyone likes profit.

The market will decide what an unreasonable profit is. If natchez's new prices are much higher than another online ammunition sales site, they will lose business to it.

This is an irrelevant argument. The new ammunition will be purchased at a new price and marked accordingly with normal profit intact. No money will be lost or expense incurred with "new ammo".

So, they should operate at a net loss until the new stocks sell? That's not good business sense.

 

[Jorg Nysgerrig]

You know, most local community colleges offer a business class or two at night. Some people in this thread might find that useful.

 

[HankB]

1. When supplier prices go up, dealers have to buy replacements at higher prices.

2. When supplier prices go down, dealers still have to recoup their investments on current inventory.

In other words, some dealers have a "ratchet" on their prices that only goes one way.

But most importantly . . .

3. People will still buy, even at the higher price.

If YOU were a businessman, why would YOU charge less than the traffic will bear? Higher prices mean more profit . . . unless you raise them so much that sales drop off too much. Juggling prices & sales volumes is done all the time to maximize profit.

 

[lamazza]

Well, a store has to take into account how much it will cost to replace that stock...

 

[45Badger]

Sure business should make a profit. They were making a profit on ammo at $7.99 and now they are making an unreasonable profit on ammo at $8.49

First a knee jerk- Who appointed you arbiter of fair pricing and profit? When it's your money footing the bills and floating the inventory, you get a "say". Until then, you get a vote- buy it or move on. I love all the folks who make poorly grounded assessments about other peoples businesses, pricing, and profitability:banghead:

More reasoned and fact based response- It is not only about (potentially) raising profits. LIC (last invoice cost) or replacement pricing is common. When prices drop, businesses often write down the value of their inventory. When they go up, they increase the value of the inventory. That's one risk a business assumes in taking on inventory.

Don't like it? Become an accountant and figure out a better way. Or open a competing business with a better model.

 

[DoubleTapDrew]

When prices drop, businesses often write down the value of their inventory.

Seems rare that if CCI suddenly dropped the price of their ammo $2 a box Natchez would immediately mark their price down that much on their existing stock, but when the price increases you can bet they'll up it immediately. So on their existing stock they are making an additional $1.49 a box. Yeah it'll cost more to replace it and they'll be back to their old profit margin.
I know that's how it works and they aren't a non-profit or anything, it just sucks for us it only goes one way, up.

It would be kinda funny to see *Note: CCI announced a 20% price decrease on ammo effectice May 1st so stock up now!*

 

[jrfoxx]

Every couple of months when I see the price of ammo has gone up, I think how glad I am over a year ago, I dropped the cash to buy reloading dies for every one of the 26 different calibers I shoot (except .22lr and .22mag, but if I could figure out how to reload those withough blowing myself up making the priming compound, I do those too).Course the fact that the cost of supplis keeps going up still stinks, but its still cheaper than buying factory ammo.Also makes me not as annoyed at how much it rains here and screws up my plans to go shooting.....
The bad weather helps keep me out of the doghouse and the poorhouse.

 

[GigaBuist]

Ammo is not scarce by any means.

It was not too long ago. Folks couldn't keep 7.62x39mm in stock, 5.56 was hard to come by, etc. I'd say if Eric the Ammoman can't keep it in stock then the supply side is lacking.

 

[Flintlock Tom]

Any sale of any commodity is a two sided agreement: the retailer posts a price, the customer agrees to the price and takes the product home. If the customer does not agree he does not take it home. If the retailer can't find a customer to agree to his price, he lowers the price or eats it himself.
Simple.

 

[goon]

It looks like they are screwing you but you have to remember than when they sell out of what they have now, they have to replace it at the new price.

So it's kind of like they're floating their way along to try and stay ahead of the price increases as much as possible.

My solution to stay above the whole thing is to buy enough that you feel comfortable with it.
Get 1K for every caliber and stick it in ammo cans.
When you want to shoot, go buy a box of ammo. Use that box to rotate out one of your "old" boxes and replace it with a new one.
You'll always have ammo on hand and you don't get hit as hard as you would buying all of it at once (eventhough you pay as much for it in the end).

It sucks that ammo prices are going up but the dealers don't have much to say about that. I have a friend who manages the department at my favorite FFL. He's also a shooter, which is why he works at the gun store.
It bugs him just as much as it bugs the rest of us but what choice do they have?
If you want to stay in business you can't run it like a charity.

 

[lonegunman]

Since my family business has been around for three decades,,I'm betting our business model works.

Maybe we should check here more often?

 

[Phil DeGraves]

Are you guys saying that if you bought a Colt SAA in 1970 for $300, that you would sell it now for $360, since you get your 20% more than you paid for it?
Nonsense. You'd ask $1200 because that is what the market will bear right now. It has nothing to do with existing stock or what you originally paid for it, so stop the hypocrisy.

 

[Ithaca37]

The market will decide what an unreasonable profit is.

Ammo sales are tightly regulated, making entry in to the market difficult at best. This is not a free market. Granted, nothing in this country is truly free, but government regulation of the size and complexity as that governing FFLs does not allow for free market theories to apply.

 

[Titan6]

Do most dealers add the manuf. price increase to in stock items?..... Am I missing something???

Only if you want them to buy more and sell it to you.

 

[bluto]

It is entirely possible that increasing prices on existing stock will help defray a shrinking profit margin on new stock pricing. I see this all the time in my food sales industry.

We don't know how much of an increase the dealer sees at the wholesale level. It may be significant enough that just passing along the exact increase will lower his sales margin - and overall profitability. He may still decide to do this (hold back price increases to a minimum) to remain competitive so.......... by raising the price of his current inventory he can recoup some future margin losses.

Raising prices .50 a box is hardly gouging. In fact, we don't know that we aren't actually getting a good deal, relatively speaking, in relation to manufacturer price increases. If you don't think so then buy somewhere else. Eventually, the free market will bring prices in line to a competitive level if it hasn't (as I suspect it has) already.

Free market capitalism works to bring you the best deal available. You may not like the deal, but don't start dumping on the guy (vast majority anyway) trying to stay in business.

 

[Gun Slinger]

For the OP as well as anyone else annoyed by these ammunition "profiteers":

You also have the right to refuse to buy their ammunition if the amount of profit that they are generating 'puts a bug in yer bonnet'.

As 'SammyIamToday' pointed out, the market will determine an acceptable margin of profit and if the market does not sustain it, then they will be forced to mark down their inventory to a more 'acceptable' level or face the prospect of having their inventory remain on the shelves.

Unfortunately, with energy prices affecting the cost of everything as well as every process from manufacturing to packaging to transportation, prices will continue to escalate until the price of energy stabilizes (unlikely to happen soon) and the panic buying, oops, sorry.... "stocking up" on ammunition that so many seem to be doing these days in response to a possible Dummycratic Gun Grabber Presidency come Nov. 2008, so don't look for things to get any better anytime soon.