It's simple, really.
Prices are FAR too low.
Retailers need to crank up the price until the rate at which ammo goes out the door gets closer to normal.
Retailers that crank up the price do a couple beneficial things:
The bottom line, economically, is simple: shortages are the result of interference with the price system. If we let prices do what they are supposed to do-- communicate market information and thus balance supply with demand-- then the problem largely resolves itself.
ATK, Remington, Black Hills et al are obviously selling their ammo too cheap to the big box stores. The big box stores can then sell it too cheaply on the shelf.
If ANYONE in the supply chain would do the right thing and raise prices to what they SHOULD be as a result of the spike in demand, then this problem would resolve itself much more quickly.
I've been looking for some .40cal HST defense loads. I finally found some at Gander for $33/20! I left empty handed because the price was too high for me.
If you raise prices high enough, people en masse will similarly say 'that's too high' and leave the ammo on the shelf. Shortage resolved.
When people see ammo STILL on the shelf, they realize the shortage is over and demand slackens. When demand slackens, the prices will drop back down.
I'm frankly surprised that WMT and Gander are so clueless that they continue to let scalpers claim their profit.
If I am in business leadership responsible for selling Ammo at WMT or Gander, I'm firing the moron that's keeping prices so low we can't keep any inventory in.WMT and Gander like to think they are helping customers by keeping prices low. But they aren't. They are hurting customers by prolonging the "shortage" and hurting themselves by letting scalpers claim profit that they could just as easily claim. This is mostly the result of setting prices at the corporate headquarters (where they aren't was informed about the local market). Let your local store/department managers set ammo pricing, raising the certain items by $5 or $10/box until they can go more than a couple days before selling out. Then you will have far fewer people buying up ammo in GA and reselling to CO over the internet because of the vastly different market prices in two locales, for example.
I wouldn't charge the same for bottled water in the Sahara as I would in Colorado, so why not let ammo prices reflect local demand?
The "Right' price is the one that keep ammo on the shelf until the next truck shows up. Ideally, that last box would sell as the truck pulls up. But when you sell out in 20min what takes a week to deliver, you've OBVIOUSLY got prices WAY too low.
Yes, it's a short term inconvenience and an annoyance to have astronomical ammo prices. But it's best to deal with some short term pain and let it pass than it is to prolong the agony forever and ever by defeating the effective work of the price system.
H
Prices are FAR too low.
Retailers need to crank up the price until the rate at which ammo goes out the door gets closer to normal.
Retailers that crank up the price do a couple beneficial things:
- Undercut the scalpers. The scalpers exist because the huge gap between what people are willing to pay and what they can buy it for at the big box store. If WMT and Gander has the "armslist" price on the shelf, the scalpers go away and the shortage disappears.
- Increase the cash going to ammo companies. This can increase capacity and stimulate more production to the market
- Increase the cash going to others in the supply chain-- producers of raw brass, forming dies, production equipment, etc. More production is stimulated
The bottom line, economically, is simple: shortages are the result of interference with the price system. If we let prices do what they are supposed to do-- communicate market information and thus balance supply with demand-- then the problem largely resolves itself.
ATK, Remington, Black Hills et al are obviously selling their ammo too cheap to the big box stores. The big box stores can then sell it too cheaply on the shelf.
If ANYONE in the supply chain would do the right thing and raise prices to what they SHOULD be as a result of the spike in demand, then this problem would resolve itself much more quickly.
I've been looking for some .40cal HST defense loads. I finally found some at Gander for $33/20! I left empty handed because the price was too high for me.
If you raise prices high enough, people en masse will similarly say 'that's too high' and leave the ammo on the shelf. Shortage resolved.
When people see ammo STILL on the shelf, they realize the shortage is over and demand slackens. When demand slackens, the prices will drop back down.
I'm frankly surprised that WMT and Gander are so clueless that they continue to let scalpers claim their profit.
If I am in business leadership responsible for selling Ammo at WMT or Gander, I'm firing the moron that's keeping prices so low we can't keep any inventory in.WMT and Gander like to think they are helping customers by keeping prices low. But they aren't. They are hurting customers by prolonging the "shortage" and hurting themselves by letting scalpers claim profit that they could just as easily claim. This is mostly the result of setting prices at the corporate headquarters (where they aren't was informed about the local market). Let your local store/department managers set ammo pricing, raising the certain items by $5 or $10/box until they can go more than a couple days before selling out. Then you will have far fewer people buying up ammo in GA and reselling to CO over the internet because of the vastly different market prices in two locales, for example.
I wouldn't charge the same for bottled water in the Sahara as I would in Colorado, so why not let ammo prices reflect local demand?
The "Right' price is the one that keep ammo on the shelf until the next truck shows up. Ideally, that last box would sell as the truck pulls up. But when you sell out in 20min what takes a week to deliver, you've OBVIOUSLY got prices WAY too low.
Yes, it's a short term inconvenience and an annoyance to have astronomical ammo prices. But it's best to deal with some short term pain and let it pass than it is to prolong the agony forever and ever by defeating the effective work of the price system.
H
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