Sound explanation of why you don't just turn on an ammo faucet.
https://outsider.com/outdoors/hunti...resident-gives-explanation-ammo-shortage/amp/
https://outsider.com/outdoors/hunti...resident-gives-explanation-ammo-shortage/amp/
However, the main reason for the shortage is that ammo companies simply can’t meet the current unprecedented demand. Vanderbrink says that the industry has been over capacity throughout much of the last four years.
In contrast, during the eight years of Barack Obama’s presidency, many consumers worried about stricter firearm regulations. They bought up as many guns and ammunition as they possibly could, leading to more ammo shortages. Yet, those same consumer fears decreased exponentially after Trump took over as president. In fact, industry insiders call this shift in consumer thinking the “Trump Slump.”
...reported an excess of $1 billion of backlogged ammo orders. They are taking steps to increase production though.
"Buy It Cheap, Stack It Deep" isn't just a funny phrase. It is something to actually do (whatever you can afford). I recall guys like Tom Gresham recommending everyone stock up on whatever they could afford as the current prices would not be around forever. He recommended people buy a few boxes of ammo every month to put away if you can't afford to buy by the case.Yeah, just a bunch of hooey from the president. How they manage to keep getting caught flat footed several elections in a row is just beyond me. Yes, there is more this time, but they still got caught flatfooted AGAIN and are feigning ignorance.
Unprecedented? Sure. Unpredictable? Not at all.
I like how the experts called it a Trump Slump, but the same thing happened with the previous elections. Remember all the posts and memes about Obama being the greatest salesman of the year?
So there was a bit of a Trump Slump after Trump won. Did the ammo companies using the lack of demand to build up inventory in preparation for the next election? Nope. They don't work that way. It would be costly to do, which is why they don't do it.
Remember folks asking if the ammo companies would increase production during the previous shortages?
Remember how people get surprised by ammo shortages with the last elections?
Searching for these things on THR is a nifty little walk down memory lane.
The bottom line here is that ammo companies either won't or can't actually gear up production for regularly scheduled panic buys. They are deathly afraid that if they gear up production and build up inventory and the predicted panic buying does not materialize, then they will potentially go out of business. HOWEVER, they can just ride the panic and keep making money and remain in business. Failure to make huge profits at the risk of going out of business is a poorer business strategy than being more conservative and making only some changes in direct response and staying the course overall.
Even if they did ramp up production with new machines and facilities, what would they do with those machines and facilities during most of the years between elections?
It’s equipment and workers will eventually have to get rid of when the demand dies down.Ammo makers COULD add additional machinery and hire more workers, but I understand the reluctance to do so. That would be a huge investment in infrastructure and at some point we have to reach the point of saturation where they'd be stuck with more equipment and workers than needed.
There has been an almost constant run on ammo for more than a decade now. And I'd argue that the amount of ammo being fired hasn't increased by nearly that much. There is a butt load of ammo out there in peoples homes. I'm 62 and if I never bought another round of ammo could make what I have last the rest of my life. Of course I'd not shoot as much as I'd like. But I'm sure there are a lot of others like myself.
And FYI, a buttload is actually equal to 2 hogs heads.
A Buttload is an Actual Unit of Measurement – Commonplace Fun Facts (wordpress.com)
How Much is a Buttload? (ponderweasel.com)
Exactly. It cost a lot of money upfront to be able to produce more ammo. You might never get that money back and that’s not a risk that a lot of companies want to take. That’s not a risk a lot of companies in other industries want to take.They're in business to make money and that's what they're doing.
Ramping up production during the "Trump Slump" in anticipation (speculation) of a pandemic and gun control isn't exactly a sound business strategy. Sure, you'll make more money "if" you call it right, but you risk going under if you don't. So they ramp up as best they can with current facilities and raise prices to keep up with the cost of raw materials.
It's really not rocket science
They're in business to make money and that's what they're doing.
Ramping up production during the "Trump Slump" in anticipation (speculation) of a pandemic and gun control isn't exactly a sound business strategy. Sure, you'll make more money "if" you call it right, but you risk going under if you don't. So they ramp up as best they can with current facilities and raise prices to keep up with the cost of raw materials.
It's really not rocket science
I don’t necessarily think I agree. Let’s say they had been proactive and spend 10 million dollars… Likely more… Getting a new place more machinery and more workers prior to the run on ammo, maybe January/February timeframe. and let’s say it takes from February to June to Find a new factory get all the equipment set up and get all the people hired… they increase their production by 100 or 150% and the run dies down by December. There’s no way they would’ve made all their money back and then once demand is lower because everybody’s calm down it would take them years to make the money back and they would have to lay a bunch of people off.While we are agreement on this, that the explanation given doesn't mirror this reality is why I think the comments are a bunch of hooey.
All businesses speculate. The only question is really how much they are willing to speculate. Ammo companies are playing it conservatively in a reactionary manner instead of being proactive and then trying to explain away the shortages as being on the market, when they are part of the problem as well.
Yeah, just a bunch of hooey from the president. How they manage to keep getting caught flat footed several elections in a row is just beyond me. Yes, there is more this time, but they still got caught flatfooted AGAIN and are feigning ignorance.
Unprecedented? Sure. Unpredictable? Not at all.
I like how the experts called it a Trump Slump, but the same thing happened with the previous elections. Remember all the posts and memes about Obama being the greatest salesman of the year?
So there was a bit of a Trump Slump after Trump won. Did the ammo companies using the lack of demand to build up inventory in preparation for the next election? Nope. They don't work that way. It would be costly to do, which is why they don't do it.
Remember folks asking if the ammo companies would increase production during the previous shortages?
Remember how people get surprised by ammo shortages with the last elections?
Searching for these things on THR is a nifty little walk down memory lane.
The bottom line here is that ammo companies either won't or can't actually gear up production for regularly scheduled panic buys. They are deathly afraid that if they gear up production and build up inventory and the predicted panic buying does not materialize, then they will potentially go out of business. HOWEVER, they can just ride the panic and keep making money and remain in business. Failure to make huge profits at the risk of going out of business is a poorer business strategy than being more conservative and making only some changes in direct response and staying the course overall.
Even if they did ramp up production with new machines and facilities, what would they do with those machines and facilities during most of the years between elections?
I don’t necessarily think I agree. Let’s say they had been proactive and spend 10 million dollars… Likely more… Getting a new place more machinery and more workers prior to the run on ammo, maybe January/February timeframe. and let’s say it takes from February to June to Find a new factory get all the equipment set up and get all the people hired… they increase their production by 100 or 150% and the run dies down by December. There’s no way they would’ve made all their money back and then once demand is lower because everybody’s calm down it would take them years to make the money back and they would have to lay a bunch of people off.
That’s not a risk any sane company would take. We have seen that this current animal crisis has lasted quite a while and it may still last quite a while but there’s no way to know how long that is so chucking a bunch of money at the problem to make more ammo quickly well almost never makes sense. They would have to do it slowly and carefully.
I think the explanation in the article is absolutely in line with reality. Especially given that Covid has meant that a lot of places I decrease decrease the number of workers they had for a while, so 100% production would have meant 100% of a decreased workforce.
You think they haven’t hired people to do the math and watch the market trends? I guarantee the bigger manufacturers have.Well, not exactly. First off, there are 7M new gun owners out there. That number alone should push the envelope a little. Secondly, they are selling it as soon as it is off the production line, which basically means production is lagging way behind.
The smart thing to do would be to hire an actuary to do some number crunching and make some reasonable projections.
The other thing is, I'm not sure when everyone will "calm down". My estimate is not for at least a couple of years. Especially with all the "gun control" noise coming out of our new administration.
You think they haven’t hired people to do the math and watch the market trends? I guarantee the bigger manufacturers have.
Well, not exactly. First off, there are 7M new gun owners out there. That number alone should push the envelope a little. Secondly, they are selling it as soon as it is off the production line, which basically means production is lagging way behind.
The smart thing to do would be to hire an actuary to do some number crunching and make some reasonable projections.
The other thing is, I'm not sure when everyone will "calm down". My estimate is not for at least a couple of years. Especially with all the "gun control" noise coming out of our new administration.
I guarantee you they have those people running numbers.
Maybe ammo manufacturers should diversify their business. What a concept.
Exactly.I guarantee you they have those people running numbers. They likely know the exact costs to build a new facility and buy and install equipment. They know exactly how long it'll take and what type of internal resources they need to manage the project and train new employees. But the management that make the decisions are only going to pull the trigger if it makes business sense. The ROI might be 3-5 years to just install a new line, and if there's no room for a new line you're looking at far longer to build a new facility. That's a HUGE loss if in 2024 there's another Republican in office and suddenly the market is flooded with ammo (and guns). Companies like Federal aren't in business to just make a ton of money today. They are in the market to make steady profits for the years and decades to come and need to make their growth decisions with that in mind.