22LR Ammo Market at a Tipping Point?

dorminWS · Post by **dorminWS** » Wed, 08 Jul 2015 11:14:03

We can hope, maybe...............

http://www.ammoland.com/2015/07/tipping ... z3fFxUDcyj

SHMIV · Post by **SHMIV** » Wed, 08 Jul 2015 12:10:42

Well; it sounds like good news.

It will be nice to see .22 back on shelves, at reasonable prices.

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MarcSpaz · Post by **MarcSpaz** » Wed, 08 Jul 2015 15:40:31

http://fiveguysracing.com/marc/Gun_Stuff/22lr.jpg

ShotgunBlast · Post by **ShotgunBlast** » Wed, 08 Jul 2015 18:34:35

Of course this could have been resolved a lot sooner if retailers were actually able to raise their prices based on supply and demand. You know, the way the secondary market actually works.

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MarcSpaz · Post by **MarcSpaz** » Wed, 08 Jul 2015 18:51:37

Supply and demand is usually based on price trends over a given period of time and market wide. When business jack ther prices up on one or even a few products by 300 to 500 percent literally overnight, you tend to create an exclusionary market which pisses off the majority. This is called price gouging.

Think of it like this... What if whole milk went from $2 a gallon to $4, but skim jumped to $25 a gallon because one weekend they had a run on skim? I think you would have a lot more people PO'ed about the skim prices as they switched to whole milk. The producers make more on whole because it take less to process. After a while the market levels off and the skim comes back at $6 a gallon and everyone is excited about the new low skim prices.

Now, it just so happens that this shortage of 22LR was not caused buy market pricing on 22LR. It was caused by supply and demand. See, 22LR is cheap to make, cheap to sell, and has a very low profit margin, even at extremely high volume. So, because all weapons and ammo were selling like crazy, the manufacturing industry stopped making the less profitable 22LR to make higher volume of the much more profitable cartridges which they still marked up 200 to 300 percent.

Its called market manipulation. Never let a good crisis go to waste. Usually people go to jail for it, but the DOJ doesn't care about gun owners unless its to tax them or disarm them.

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ShotgunBlast · Post by **ShotgunBlast** » Wed, 08 Jul 2015 21:29:32

MarcSpaz wrote:Supply and demand is usually based on price trends over a given period of time and market wide. When business jack ther prices up on one or even a few products by 300 to 500 percent literally overnight, you tend to create an exclusionary market which pisses off the majority. This is called price gouging.

Think of it like this... What if whole milk went from $2 a gallon to $4, but skim jumped to $25 a gallon because one weekend they had a run on skim? I think you would have a lot more people PO'ed about the skim prices as they switched to whole milk. The producers make more on whole because it take less to process. After a while the market levels off and the skim comes back at $6 a gallon and everyone is excited about the new low skim prices.

Now, it just so happens that this shortage of 22LR was not caused buy market pricing on 22LR. It was caused by supply and demand. See, 22LR is cheap to make, cheap to sell, and has a very low profit margin, even at extremely high volume. So, because all weapons and ammo were selling like crazy, the manufacturing industry stopped making the less profitable 22LR to make higher volume of the much more profitable cartridges which they still marked up 200 to 300 percent.

Its called market manipulation. Never let a good crisis go to waste. Usually people go to jail for it, but the DOJ doesn't care about gun owners unless its to tax them or disarm them.

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First of all, there's no such thing as "price gouging" when dealing with voluntary transactions. It's just a pejorative term that doesn't mean anything like "assault weapon". You either buy the product someone is selling or you don't. If there are a lot of potential buyers for supply you raise prices until the number of buyers equals your supply. If there is not a lot of potential buyers you lower your prices. I don't understand why people have trouble with that concept if a traditional retailer did it when that's exactly what they do individually on a secondary market, be it a gun show, Ebay, flea market, Craigslist, etc.

Retailers (and thus manufacturers) being able to raise prices on 22 ammo when there is limited supply and overwhelming demand would have one (or both) of two effects (pissed off majority be damned):

1. It would have left 22 ammo on the shelf for those that really want it. Sure, people like myself probably would have sat on the sidelines while the price was higher, but people who had more of a need for 22 ammo would have had better access to it.

2. Selling 22 ammo would increase margin, thus giving manufacturers incentives to make more 22 ammo to keep on store shelves.

Jeeze, it's been how many years now in this shortage? Can you honestly say that keeping prices frozen and thus shelves bare for multiple years (and when you do finally see it on the shelf there's a ration of how many boxes you can purchase) has been a benefit to the majority?

MarcSpaz · Post by **MarcSpaz** » Wed, 08 Jul 2015 22:08:16

Now you are really scaring me. Price gouging, being a pejorative term or not, absolutely positively applies ONLY to voluntary private transactions. It is specifically referring to a seller's prices being raised to a level much higher than what is considered reasonable. More specifically after a supply shock.

Regardless of if you agree what price gouging is, you completely missed my point. It doesn't matter what the price was, is or could be. The manufacturers stopped making 22LR. That's why there was none to be purchased. Not because prices were too low and greedy customers bought too much too fast. Once the built inventory was sold... it was gone. It doesn't matter if the retail price was $1 for a brick or 500 or $1,000 for a brick of 500. There was simply none to buy once the warehouses and distributors were exhausted.

ShotgunBlast · Post by **ShotgunBlast** » Wed, 08 Jul 2015 23:36:16

It boggles my mind how you can consider a price for something as gouged (and thus unreasonable by your definition) and still fork over the money for the item. The very fact this voluntary transaction is taking place proves that the price is not unreasonable because if it was you wouldn't be purchasing the item. Everyone loves talking about how great the free market is, until they're the ones who feel like they're getting a bad deal but in the end it's all just supply and demand curves.

I agree, the supply was exhausted. Which is a good explanation for empty shelves for a few weeks or a few months. But a few years? Come on. Why was the supply exhausted? Because retailers weren't able to react to the market due to "anti-gouging" laws. If retailers were able to raise prices quickly, don't you think that would have helped contain the shock on the warehouse supply? If not, don't you think higher prices (and thus higher margins) would entice manufacturers to ramp up production to cash in on the opportunity until supply leveled out? You said yourself manufacturers were focused on getting higher margin ammos back on the store shelves. This is exactly what individuals do on the secondary market. I never had any intention of selling ammo, but once I saw empty shelves and continued demand I was able to part with some 22 and 9mm for some nice coin.

We see this anytime a big storm rolls in and you can't find any flashlights, batteries, or ice on the shelves. Well what happens if you're taking care of some folks that need batteries or ice to keep their medical equipment or medication going during a power outage? I personally would rather pay an inflated price and actually get the products I need than see a bunch of empty shelves and think "well if something happened to be on the shelf thankfully I'd only be paying the everyday low price". When Superstorm Sandy rolled through the northeast, I really wanted to rent a uhaul and load up a bunch of generators to sell at a pretty penny except I'd probably get arrested like a guy did when he went down after Katrina. When generators being sold at the regular price, there's no motivation to try to get them to the northeast when you can easily sell them anywhere else in the country for the same price, but with enough of a markup it would be worth a guy driving from Virginia to load up the truck and figure out how to get generators to people that need them. Prices are a valuable tool that alert manufacturers and suppliers that there is a heightened demand for their product. When we stifle that signal flare through "anti-gouging" laws, we end up with empty shelves and little incentive to get them filled up.

https://www.youtube.com/watch?v=R6ojYtKazgQ

MarcSpaz · Post by **MarcSpaz** » Thu, 09 Jul 2015 02:45:01

ShotgunBlast wrote:It boggles my mind how you can consider a price for something as gouged (and thus unreasonable by your definition) and still fork over the money for the item. The very fact this voluntary transaction is taking place proves that the price is not unreasonable because if it was you wouldn't be purchasing the item. Everyone loves talking about how great the free market is, until they're the ones who feel like they're getting a bad deal but in the end it's all just supply and demand curves.

For what it worth... in the last 2 years, I only bought 22LR once. Ironically, it was mid July in 2014. I got 1,000 rounds of 22LR for $45 from a friend who is an FFL and sold them to me at cost. There is no way I would pay the prices that they have been asking since the Sandy Hook shooting. Anyone who pays more than 5 cents a round for lead round nose is getting screwed.

ShotgunBlast wrote:I agree, the supply was exhausted. Which is a good explanation for empty shelves for a few weeks or a few months. But a few years? Come on. Why was the supply exhausted? Because retailers weren't able to react to the market due to "anti-gouging" laws. If retailers were able to raise prices quickly, don't you think that would have helped contain the shock on the warehouse supply? If not, don't you think higher prices (and thus higher margins) would entice manufacturers to ramp up production to cash in on the opportunity until supply leveled out? You said yourself manufacturers were focused on getting higher margin ammos back on the store shelves. This is exactly what individuals do on the secondary market. I never had any intention of selling ammo, but once I saw empty shelves and continued demand I was able to part with some 22 and 9mm for some nice coin.

It's a known fact that very few companies were making 22LR for the better part of the last 24 months. The few companies that were making rounds were only honoring contracts, but not making retail product. With that in mind, yes, I could see the shelves being empty for years do to a lack of manufacturing.

As far as making the price point higher to be more appealing to makers... why would customers pay 50 cents a round for 22LR if they could get high power rifle rounds for 42 - 45 cents a round. I know I wouldn't. I haven't fired my 22 in 2 years.

ShotgunBlast wrote:We see this anytime a big storm rolls in and you can't find any flashlights, batteries, or ice on the shelves. Well what happens if you're taking care of some folks that need batteries or ice to keep their medical equipment or medication going during a power outage? I personally would rather pay an inflated price and actually get the products I need than see a bunch of empty shelves and think "well if something happened to be on the shelf thankfully I'd only be paying the everyday low price". When Superstorm Sandy rolled through the northeast, I really wanted to rent a uhaul and load up a bunch of generators to sell at a pretty penny except I'd probably get arrested like a guy did when he went down after Katrina. When generators being sold at the regular price, there's no motivation to try to get them to the northeast when you can easily sell them anywhere else in the country for the same price, but with enough of a markup it would be worth a guy driving from Virginia to load up the truck and figure out how to get generators to people that need them. Prices are a valuable tool that alert manufacturers and suppliers that there is a heightened demand for their product. When we stifle that signal flare through "anti-gouging" laws, we end up with empty shelves and little incentive to get them filled up.

Again, you're talking about shock events that can't really be planned for. In an emergency like a hurricane, everyone needs water, a flashlight and batteries (theoretically). So unless you price them so high that no one can afford them, then the shelves will be empty anyway. Even at a high price, they will sell. Its just that everyone pays a lot more in a time of crisis, making things worse or harder to deal with, leaving less money for other essentials, like food, fuel and medicine.

Anyway... we can just agree to disagree. We can still be friends. In the mean time, I have 500 rounds of Winchester Black Copper 40gr round nose for sale for $100 plus shipping and handling if you know anyone who's interested.

ShotgunBlast · Post by **ShotgunBlast** » Thu, 09 Jul 2015 07:30:22

Planned events or unplanned, prices are the best way to match supply and demand and when there is a shock event that wipes out the shelves it's the best incentive to either get new product made if the supply chain is wiped out or get product relocated to an area that needs it for localized events. It's the only thing that makes the guy who already has 20k rounds of 22 think twice about picking up a few more bricks. It makes the prepper who already has a generator, batteries, and food rations for a year think twice about getting more flashlights so those products can be on the shelf for others who don't already have it. That's all I'm saying. Prices help the market work if we allow them to.

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dorminWS · Post by **dorminWS** » Thu, 09 Jul 2015 09:03:02

MarcSpaz wrote: Now, it just so happens that this shortage of 22LR was not caused buy market pricing on 22LR. It was caused by supply and demand.

......................................................
A distinction without a difference, I'd say. Market pricing is caused by supply and demand.
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MarcSpaz wrote: See, 22LR is cheap to make, cheap to sell, and has a very low profit margin, even at extremely high volume. So, because all weapons and ammo were selling like crazy, the manufacturing industry stopped making the less profitable 22LR to make higher volume of the much more profitable cartridges which they still marked up 200 to 300 percent.

Its called market manipulation. Never let a good crisis go to waste. Usually people go to jail for it, but the DOJ doesn't care about gun owners unless its to tax them or disarm them.

................................................
When you stop making one product to make a more profitable product, that's not market manipulation; that's just the market. It is how the market allocates resources based upon supply and demand. If it had been manipulation, whoever the black-hearted manipulator was would have swooped in when .22LR prices got high and produced and sold more of it. As multiple black-hearted manipulators jumped in, the supply would have expanded causing the price to drop until the incentive to expand .22LR production was extinguished by falling prices. That's what's called "a market reaching equilibrium".

If you want to point a finger at someone for the disincentive to produce more .22LR and resulting extended short supply of it, I'd suggest you look to the ever-lovin' US gummint. Certain of its agencies and armed forces soaked up vast quantities of more profitable calibers while at the same time other of its agencies heaped on environmental regulations and attempted to impose gun-control schemes that increased costs, probably reduced the supply of lead, and discouraged investment in new capacity.

MarcSpaz · Post by **MarcSpaz** » Thu, 09 Jul 2015 14:15:46

dorminWS wrote:If you want to point a finger at someone for the disincentive to produce more .22LR and resulting extended short supply of it, I'd suggest you look to the ever-lovin' US gummint. Certain of its agencies and armed forces soaked up vast quantities of more profitable calibers while at the same time other of its agencies heaped on environmental regulations and attempted to impose gun-control schemes that increased costs, probably reduced the supply of lead, and discouraged investment in new capacity.

I would agree with all of that as contributory for sure. But lets be real here... none of this would have been an issue if it wasn't for the historical trends of our government making useless reactive laws that will in no way make-up for past tragedies or prevent future events. Such as the Gun Control Act, the National Firearms Act, the Brady Act, the Federal Assault Weapons Ban, the School Safety And Law Enforcement Improvement Act, and the 2013 United Nations Arms Treaty.

Yes, lets point the finger at the law makers, but for the big reasons. If Congress didn't make a new law or empower the ATF to make new rules at will every time a tragedy took place, we wouldn't have had any of the issues of availability with firearms and ammo.

I mean, think about it. A great example.... Armor piercing rounds for handguns and rifles for civilian use are completely banned in the US, not because police officers were killed after being shot through a vest, but because after a decades of armor piercing rounds on the market, someone in congress thought is might become an issue in the future. The entire population of the US was pre-judged and punished for something that didn't happen. The latest records I saw were from the FBI in 2013, showing that to that date, exactly Zero (0) LEO's were killed after an armor piercing round penetrated body armor.

flyingron · Post by **flyingron** » Mon, 13 Jul 2015 10:18:35

The local walmart has had $6.99 100 Round CCI boxes fairly on and off recently but it's dried up again.

FiremanBob · Post by **FiremanBob** » Mon, 13 Jul 2015 11:25:18

Marc, I recommend you get your hands on a couple of books by Thomas Sowell and refresh your understanding of how and why markets not only work better than anything else, but are also more ethically correct.

MarcSpaz · Post by **MarcSpaz** » Mon, 13 Jul 2015 11:37:46

I love the free market in the US for sure. I understand free market in general. I just don't agree with sudden price shock. Its just an opinion is all.

I've own several retail business and have managed many more. I made a fortune doing it too. Part of the reason I left the retail world is because I didn't like the laws forced upon us (and its gotten worse) and I found some practices in the retail industry to be less than honourable. That is experiance. Not sitting outside looking in.

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Swampman · Post by **Swampman** » Tue, 14 Jul 2015 07:36:46

During the 22 shortage I called a guy on another forum a gouger for advertising 22lr at 4 for a dollar. Got put in the corner, so to speak, for a week.

I was wrong. He was reacting to the market. I understand the market and how it works, but was pissed off that I couldn't find 22lr anywhere for less than 20 cents.

Most people just don't understand the market and how it reacts to different stimuli. If people payed any attention to the stock market they might be shocked to see the share price of, say, Apple as high as it is. Most people can't afford more than a few shares. Does that mean Apple is gouging? Not at all. Just making as much profit as they can.

No profit means you can't stay in business. If a product is selling at a higher price than you are offering you'll lose money. Can't stay afloat that way.

Individuals are the same way. Looking to make some extra money, people will sell what they have at market rates and use the money to restock when the price comes back down. It's no different than a business with the exception that the individual isn't faced with the regulatory burden a businessman has, but also can't buy at the same wholesale rate a businessman can. So the individual is limited in his ability to sell by what ha has on hand.

My 2 cents. Good discussion !

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Bailey960 · Post by **Bailey960** » Wed, 29 Jul 2015 12:43:36

Let's hope we're nearing the end of this nonsense. I did manage to get 2,000 Mini-Mags from Cabelas for $8.99/100 (not great, not horrible).............but........it took 4 orders over 4 days due to their rules.

AlanM · Post by **AlanM** » Wed, 29 Jul 2015 17:44:10

Hasn't anybody seen my thread?
.22lr ammo at Charlottesville WalMart on 7/28/15

WVUBeta1904 · Post by **WVUBeta1904** » Thu, 20 Aug 2015 19:21:17

Came across this video today.

This guy seems a tad conspiracy-driven, but then again, he's got some fair points..

It's too bad that the Gov't can drive the population to such paranoia...although that's nothing new.

http://youtu.be/34FKKgPBAt4

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Post by **OakRidgeStars** » Thu, 20 Aug 2015 19:54:25

I'm getting to where I hate to look at .22LR threads any more. Conspiracy or not, my rimfire guns are getting way too neglected.

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