In order to participate in the GunBroker Member forums, you must be logged in with your GunBroker.com account. Click the sign-in button at the top right of the forums page to get connected.
Options
ammo prices
n/a
Member Posts: 168,427 ✭
Why the big difference in ammo prices as the components cannot be that much more, Not talking premium.
Sage1
Sage1
Comments
The mass marketers like Wally World buy in vast quantities. They use the economics of scale to keep their prices as low as possible. Mom and Pop who own the local sporting goods store, can't compete with them.
Why the big difference in ammo prices as the components cannot be that much more, Not talking premium.
Sage1
You're asking why commercially loaded rounds cost more than the sum total cost of the components (presumably that you buy bulk at retail)?
I'll answer your question with a question. Why does a hamburger cost more at "Five Guys" than the one you make in your kitchen? It shouldn't since they're buying meat literally by the ton wholesale, while you're buying it by the pound retail.
The answer is that the price of anything is not just a function of materials cost, but also cost of manufacture and delivery. Five guys has to pay for the meat, yes, but they also have to pay the costs of running the restaurant, electricity, heat/cooling, hiring staff, advertising, etc. Those are marginal (ie extra) costs that they have to pay to do business. Since you presumably already have a home and a kitchen, you don't have to pay any extra to cook a burger.
Same applies to ammo. Remington can buy bullets cheaper than you, but it still has to run the machinery to load them, advertise them, distribute them nationally, pay for liability and other insurance, etc.
Ammo, in particular, is heavy, meaning shipping is relatively expensive, and its also regulated, adding to costs. Manufacturing ammo on a commercial scale requires extra protection and insurance that loading a few rounds in your garage does not. The ammo companies have to make a profit on their product and that adds to cost.
And of course as mentioned, there are issues of supply and demand, as well as economy of scale. Rounds that are mass produced by the millions (eg 9mm) cost less than aren't (eg .380). This is true even though the pure materials cost (ie cost of brass and lead for bullets) should be less with the smaller .380 rounds.
Similarly, there is no MATERIALS reason why a military surplus 8mm Mauser cartridge should cost less than a commercially loaded .30-06, but the demand for the former is much lower.
Right now ammunition makers are selling ammo at max output and price to Uncle Sam. When he quits buying, and the mass stocks run down a bit, they have to rely on us as customers. Then, and only then, will the market will adjust back down to what we will pay for it.
The price of ammunition is going to be high until we get "un-involved" over in the middle-East.
Right now ammunition makers are selling ammo at max output and price to Uncle Sam. When he quits buying, and the mass stocks run down a bit, they have to rely on us as customers. Then, and only then, will the market will adjust back down to what we will pay for it.
The price of ammunition is going to be high until we get "un-involved" over in the middle-East.
Right now ammunition makers are selling ammo at max output and price to Uncle Sam. When he quits buying, and the mass stocks run down a bit, they have to rely on us as customers. Then, and only then, will the market will adjust back down to what we will pay for it.
My observation is that ammo prices have actually fallen (across the board) over the last year or so.
Ammo isn't as cheap now as it was in 2002-2004 (when ammo prices were actually at a historically inflation-adjusted low) and I don't think in general its falling any more, but its cheaper now than most of 2009-2010, I think.
This is probably mostly because the "Obama ammo panic" has worn off, and because the Obama-era hoarding has slightly depressed demand.
I suspect that the current economic depression is also decreasing domestic demand. Also, my guess (without data to prove it), is that while still not at peacetime "baseline" overall US military ammo usage is probably lower now than say 4-5 years ago when the shooting war in Iraq was hotter.
Unfortunately, I think several factors are coming in the near future to push ammo prices back up. As mentioned above, transportation is a big part of ammo costs, and as any driver can tell you from a glance at the pumps, fuel costs are going up.
The same weakening dollar that is in part contributing to increased fuel costs (and general inflation) is also contributing to increased commodity costs across the board, again, that's probably going to increase ammo costs.
On the other hand, if you're like many, your ammo hoard will increase in value along with the increase in costs, so you could think if it as either an "investment" or perhaps an "inflation hedge" if you like!