PorkNBeans
Regular
- Location
- Central Manitoba
ammo situation worsening.... and worsening..... and worsening ....... May 5, updated
- Thread starter dizzy
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That's not entirely true. During the last so called shortage in 2008 after the first Oboma election...ammo was in short supply especially .223 and handgun ammo. We bought from who ever had it at almost any price. At it's peak a case of 1000 US made .223 was selling for $525. As the demand slowed down and prices went down(at wholesale) it dropped back to $399/ 1000 retail. The problem was I had lots of stock that I payed aroung $389 for. We sold it out at $399 and made $10 a case, barely making $10 / case if you don't count overhead and interest. We had several skids at this price but we had to move it because the Federal ammo US military can deal was coming also at $399/ 1000. That's business and the risks we take. We make good money most of the time but there are a few blips along the way. You have to have fairly deep pockets to ride out the storm from time to time. Phil.
its about resupply and the ability to or not to. 30 guns shops a day are closing their doors in the U.S.A. the ones surviving are the ones making enough to keep alive......for now. I can assure you Canadian shops who cannot get ammo, will be in a tough spot through the summer. lets see how it plays out.
Don't get me started on BC ferries...
I hope x39 ammo doesn't go up too much, its the one caliber i'm lacking in.
Ah memories...
I remember buying a few cans at $500 thinking I got a great deal.
Thing about then, is it REALLY speaks to the charts I posted in this post:
http://www.canadiangunnutz.com/foru...tuation-worsening/page6&p=8466173#post8466173
Ammo prices went down temporarily, because commodity prices took a hit along with EVERY asset class during the Global Financial Crisis.
All the prices for commodities are set by the commodity exchanges which all the big banks have highly leveraged positions in - and this deflationary crash would have collapsed the entire global banking system if the US Federal Reserve hadn't come in and bailed them out through Quantitative Easing (aka - central bank debt monetizing government debt, aka - central bank buying treasuries aka - printing currency out of thin air). As a side effect, commodity prices crashed as the paper markets for them went through a MASSIVE sell off.
Fast forward 6 years - the US Federal Reserve has created trillions of dollars to keep these zombie banks alive - and commodities have returned to their pre-2008 highs. Until there's a massive correction like 2008, I see no reason to believe ammo will ever substantially drop in price. This time around, if there IS a big deflationary crash - there are going to be bigger problems. Namely, there's absolutely NOTHING the government's can do to "save" the financial system and instead, what's more likely to happen is all the money sitting on the bank's balance sheets will enter into circulation as they start failing and government deposit insurance is activated - sending the price for consumer goods through the roof.
Rocket Surgery
CGN Ultra frequent flyer
I agree and disagree with this comment. You're absolutely correct that CFO's, laws, political tension, plays a massive part in the supply and demand aspect but do also keep in mind that the folks who dominate the firearms industry type with two fingers. These are the same people who think that they can mark up items like mad and no one will ever know. What drives me absolutely batty is when you see a vendor put a gun on sale that was normally $899.00 down to $399.00 like the CSA VZ.58 223 rifles, and people are happy? How much money is the vendor making normally? Have you seen the latest Blue Line lowers normally $199 selling for $119? If they're making a profit after dropping the price 40%, are they charging more than twice what they pay for stuff? Did you not see CanAm lower his price of the bi-metal norinco ammo by $200.00 per crate in one night, then put it on a buy 4 get 1 free deal? I mean we were talking $599 for a crate, down to $399, then down to $320.00 if you purchased 5. You can see this kind of behaviour all over the Canadian industry and they wonder why we cry gouging.
I get the whole capitalism thing, and that profit is good, etc but don't lie to me and say you're barely making it when you're constantly sold out of goods with 50%+ markup on them, it's just bad form. Kind of like when I wore sweat pants to my buddy's wedding.
It's a misnomer that capitalism is simply about profit. Capitalism is about managing a complex system of flows of capital.
With the volatility in the market, many businesses often find themselves in circumstances where they need to take loses on their inventory to raise the capital needed to stay in business, potentially if it means greater return in the future.
Think about it this way:
Gun Business 1 has $10,000 worth of expenses this month.
He has $5000 in his bank account.
If he doesn't come up with an additional $5000 by the end of the month - his landlord evicts him from his retail space and he goes out of business.
What does he do? He could take out loan, he could furlough or lay off his employees, or he can fire-sale some of his inventory at a significant loss to raise capital (giving his customers the illusion that the prices of his wares are going down). If the cost to him is LESS to firesale his ammo than to take out a loan, or to rehire/keep his employee's satisfied - it would behoove him to sell his ammo at a discount.
If paying this month's $10,000 expense with capital raised from fire selling his ammo (let's say he takes a $2000 loss in the process) means him being able to bring in the next, hot new gun that will make us gunnutz go wild, and for which he could make a $20,000 profit next month - it's well worth his while to take a hit by discounting his ammunition this month to stay in business a month longer to be able to bring them in.
THAT is what capitalism is about. Giving business owners the freedom to make strategic decisions and take risks to ensure optimal distribution of goods and services through mutually agreed upon voluntary transactions. This is a very specific scenario, but operating a business in a free market is full of scenario's like that - and realistically - who loses in that scenario?
I suppose the folks who bought ammo before the business slashed his prices might feel cheated - but really who's fault is it that they bought his goods? The dealer didn't hold a gun to the head of the buyers, telling them to buy (only the government does that). The buyers made that decision willingly and voluntarily and in my opinion if they agreed to the price and paid it, they are entirely liable for that decision. Really, the only one to blame is the buyer, but even buying high gives the buyer a baseline for how to evaluate the value of the goods he purchased. If he bought a crate of ammo for $500 a month earlier, and the next month, the same ammo was $400, it gives him incentive to buy more as he can now make an logical assertion that the price of ammo is now cheaper/on sale.
It's this aggregation of intelligence through experience that makes savvy buyers who put pressure on dealers to lower prices by simply not buying at high prices (if they don't feel inclined to pay it). Conversely, noobs who have never bought anything before have no such bias and in circumstances like what's going on in the US now - those noobs are gobbling up supply and putting upwards pressure on the price for everyone else. Once again - it's the BUYERS though who are responsible, not the businesses.
In the absence of capitalism - what you have is shortages and scarcity - regulations and price controls eliminate the flexibility for business owners in running their businesses and always results in the absence of business all together.
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Totally agree with harbl_the_cat.
Running a business is not easy, and I am grateful to those out there who are willing to step up do it. It's a lot harder work and much more risky than most people think. Yes there will be swings in the market that drive prices up and down - but the very nature of a competitive marketplace is that eventually prices/costs will stabilize. It's fundamental supply chain economics. Yes, a retailer may be making a bigger than "normal" profit on something, but in the long term, if the market is really that good for him, a competitor will move in and drive back down the prices. What a retailer chooses as his sales and pricing strategy is whole nother can-o-worms. For example supermarkets are famous for having loss-leaders just to get people in their stores. They make up their margins on co-products or related products, or sometimes they just need to move stuff out to make more room for other products.
In the end, those who don't plan well in advance (both retailers and consumers) will get burned on the various upswings and downswings, but that's just the nature of free enterprise and free will. For me, rather than spending a lot of time working up theory's to explain the current situation, I'd rather just shoot what I stocked up last year, and keep my eye out for ammo at good prices and buy that when I can.
Running a business is not easy, and I am grateful to those out there who are willing to step up do it. It's a lot harder work and much more risky than most people think. Yes there will be swings in the market that drive prices up and down - but the very nature of a competitive marketplace is that eventually prices/costs will stabilize. It's fundamental supply chain economics. Yes, a retailer may be making a bigger than "normal" profit on something, but in the long term, if the market is really that good for him, a competitor will move in and drive back down the prices. What a retailer chooses as his sales and pricing strategy is whole nother can-o-worms. For example supermarkets are famous for having loss-leaders just to get people in their stores. They make up their margins on co-products or related products, or sometimes they just need to move stuff out to make more room for other products.
In the end, those who don't plan well in advance (both retailers and consumers) will get burned on the various upswings and downswings, but that's just the nature of free enterprise and free will. For me, rather than spending a lot of time working up theory's to explain the current situation, I'd rather just shoot what I stocked up last year, and keep my eye out for ammo at good prices and buy that when I can.
Rocket Surgery
CGN Ultra frequent flyer
That's all fine and dandy but it doesn't explain things like gasoline prices being the way they are, or software costing what it does. Capitalism was never designed to be about vapourware supply and demand characteristics like software, where you can simply control the competition with venture capital and charge whatever you want. Gasoline companies make a killing simply because the world can't function without energy, they just price it cheap enough so that we have to use it.
Capitalism was about 2 bakeries in a town competing for muffin business, this transnationalism was never even dreamed of at a time when electricity didn't exist.
What these gun retailers do in Canada is try to get as much profit as possible, and I don't have a problem with that, my issue is the fact that they whine all damn day and make people believe they're somehow being trodden upon. It's not an essential service they're providing, people choose to pay the prices because they enjoy the hobby or want people to think they do. I'm just pointing out how absurd it is when people cheerlead for retailers that are making stupid money and then run to their defense when they treat a customer like trash and get away with it.
Capitalism was about 2 bakeries in a town competing for muffin business, this transnationalism was never even dreamed of at a time when electricity didn't exist.
What these gun retailers do in Canada is try to get as much profit as possible, and I don't have a problem with that, my issue is the fact that they whine all damn day and make people believe they're somehow being trodden upon. It's not an essential service they're providing, people choose to pay the prices because they enjoy the hobby or want people to think they do. I'm just pointing out how absurd it is when people cheerlead for retailers that are making stupid money and then run to their defense when they treat a customer like trash and get away with it.
First off, true capitalism does NOT exist in our society. The government killed off the last remnants of it decades ago by going to a pure fiat based monetary system, long before I was born. The system we live in now is straddles the line between state capitalism and national socialism - and the aberrations that exist in all our markets today are entirely a function of decades of government and central bank intervention, regulation, and manipulation.
Venture capital making hostile takeovers of competitors is a good example of a SYMPTOM of the problems with this system, but it's not the root cause. Simply put, a system where government encourages banks to make unlimited securitized loans, it gives both the banks and those who know how to game the system the ability to accumulate unimaginable power. It is true that corporations run the world - but they only do so because governments shelter them from natural market conditions that would otherwise obliterate them. Just look at what the "Conservatives" are doing in power now - bailouts, stimulus, an "Economic Action Plan" for failing industries.
Furthermore, you say "we have to use it," in describing gasoline. That's patently false - rather, the vast majority of people have made choices to make it such that they are entirely dependent upon it being below a certain price threshold. Of course - they've been steered towards making these choices again because the government has created incentives and manipulated the economy to be that way. Of course, the government makes sure it benefits off such the dependency they've created, as well. Gas is a terrific example of this - the average tax on gasoline nation wide is 32%, as much as the oil companies make - don't forget, the government get's a VERY healthy cut of the pie as well.
I'm not saying some gun retailers are unethical, immoral, or unprofessional. Gun retailers are typically corporations and corporations themselves are government approved person-hoods managed by actual people. As such, corporations can be either good or bad. The thing is, gun retailers have to jump through a LOT of hoops just to start up a business and once they are in business, they have to keep jumping through a lot of hoops just to stay in business.
A good example is the Calgary Shooting Centre - they wanted to start up a range and business and had to take out a million dollar loan, and then it took them almost a year and a half to open their doors to generate ANY revenue. There's a lot of factors that contribute to that - not the least of which is compliance with government regulations. Once in business, they have enormous operational expenses no other retail business has - specialized insurance, specialized equipment, OH&S, environmental, much more enhanced security, qualified staff requirements (staff must have a PAL), safe storage requirements, very expensive importation permits, not to mention a highly unpredictable supply chain of inventory - just to name a few.
Add to that at any point the CFO can come in and do an inspection and essentially shut them down for any reason they want or that the government can (and does) make all kinds of hair-brained regulation that makes it virtually impossible to make any long term forecasts for doing business. Just look at the Alberta CFO's ruling that all guns must be locked at gun shows. Imagine if the CFO made a ruling (as they most certainly could) every gun on display for business MUST have the action removed - that alone would be an ENORMOUS cost to retail businesses.
So back to the Calgary Shooting Centre example. You think about the 3 owners of that range - they have hundreds of thousands of dollars on the line, have to endure essentially years of no revenue, no income, with ZERO guarantee of success - yet they do it anyways. Now think that EVERY firearms related business essentially has to go through the same process. Now imagine the Government comes in and bans all semi-automatics - half of those businesses would fold within a few months.
The long and short of it is even if I have preferred vendors, I have HUGE respect for the guys who run firearms businesses. I once thought the way you did, until I did some research and tried to start my own one up. I was of the philosophy "if I don't like it, I'll just start my own darn business." After finding out what's involved, I'm just happy there are as many businesses as there are - because honestly, there's MUCH easier ways to make a living in this country. People who run gun based retail or distribution businesses are either insane or they do it as a labor of love.
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Oh yeah, I called up my cousin in Edmonton, and he went to 3 Walmarts in the North West side of town - same deal - no Win555's in any of them. Only the more expensive CCI's in stock. Not sure of other calibers.
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CanadianReich
CGN Ultra frequent flyer
- Location
- nova scotia
according to the newest arms treaty talks posted in the firearms media section they seem to want to dry up the ammunition and reloading so guns have no ammo...
this is just talk thou....for now
this is just talk thou....for now
They can go ahead and try. I suspect doing so would make guys with 3 lifetimes worth of spent brass, powder, lead, presses and dies quite wealthy while those without become willing to pay unimaginably high prices for it.
You can reactivate spent primers with a small amount of work, so I suspect primed brass would be like silver. Powder would be like gold.
- Location
- Vancouver Island
Walmart here still no federal 525 packs since I cleaned them out months ago. CT finally got some in though, after months of nothing. Winchester crap here and there, but I dont have anything that will cycle it reliably so it just annoys me by taking up shelf space 
Gee, I wonder why the shelves are empty. people like you.
BINGO!!!
The ammo is there. Maybe some time these hoarders and profiteers will take a break.
Some jerks even plan on sell .223 for $1 a round
- Location
- Vancouver Island
People like me. Exactly! I didnt think you would catch on. People that shoot a lot (like me) buy a lot of ammo. I guess you are a wanna be internet shooter then, huh? I buy ammo and shoot it. Lots of it. I still have 2 boxes left from that lot tho, so maybe I am a hoarder. I also cleaned out CT of their 2 boxes in December, but they got 2 more in just last week, so they are at full inventory for the season. Some people are unable to plan ahead. I can't really feel sorry for them. Ammo is always hit and miss around here, so I buy what I think I'll need beforehand. Logic. Works for me, clearly not for you.
Hoarders are not the problem, there are not near enough hoarders to cause the current shortage. $1 a round for 223 will soon look very very cheap, in fact when you consider what a 223 round can do a buck is a bargain. I assure you the current ammo problem has everything to do with demand from new buyers being much higher than the suppliers can supply. the previous market balance was so fragile ANY increase in demand was going to upset the demand. Heck if every gun owner simply bought 11 percent more ammo than the previous year that in itself would create a one month complete ammo famine. Now that the market is demanding 3-4 times the previous ammo supply, the famine will last much longer, maybe 24 months or more. this is not a small deal. Some dude in the NOrth buying 10000 rounds will have no affect on the overall market. buy what you can if you intend to shoot for the next 2 years and don't say you weren't warned.
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