We get asked (that’s the nice way of saying it) every day, “why won’t you lower ammo prices?!?” The simple answer is that we’re a business, and to stay in business, we can’t buy something for a dollar and sell it for 50¢. The more complicated answer goes back to March of 2020. I was watching ammo prices back then, and as I started the process of buying the SharpShooters business, I obviously started watching ammo prices even closer. For the last 6+ months that I’ve lived SharpShooters, I’ve become quite intimate with the economics of ammo prices. I’m going to try and lay it all out here. I’d love to hear your comments as well.
In March of 2020, a triple whammy whacked our ammo prices. First, our idiot politicians said the words “government lockdown.” That phrase is not popular anywhere, but I’d argue that Americans get hotter than any other citizen group in the world at such statements. That was the first punch, and it led to the next two. What happened right after that was that there was a run on ammo. Every gun loving American went out and bought all the ammo he or she could find. It was all gone. But that was only half the fun. The 2nd bell to toll was the covid-driven “shut everything down” cry. So, most industry, including ammo makers, shut down. The ammo makers stopped making ammo.
At that point in time, you had a run on ammo, so all the shelves were empty, and the manufacturers stopped making ammo. Meanwhile, our idiot politicians (did I already say that? Good.) argued over which workers are “essential.” Personally, that was the most offensive part of this entire debacle. No government – especially in America – has the right to look anyone in the eye and say, “Your job is not essential.” A few state governors got that right. Most failed spectacularly. But I digress.
Then the “mostly peaceful protests”, aka “riots” started…and went on and on and on and on.
That triple whammy set up the next 18 months. What happened in April through October or November was that these factories were shut down for a few months, then decided to “come back online” at 1/3 or 1/2 capacity so employees could “social distance”. Well, that wasn’t really as effective as actually being at a third or half capacity because people had to change the way they physically worked just to make sure they stayed “6 feet apart”.
Anyway, these factories struggled to regain lost productivity, while trying to answer not only the ridiculous immediate demand, but also the demand that was already booked before all the madness.
What most ammo makers did then – and are to some extent still doing today – was focus only on the most popular calibers: 9MM and .223. They made, and continue to make, billions of rounds of 9MM and .223. Meanwhile, some savvy “investors” bought up huge quantities of this ammo. They bought it by the 10’x20′ conex container, which is 1.35M rounds of 9MM or roughly 1M rounds of .223. Then they sold this ammo at ridiculous prices to retail outlets: sporting goods stores, gun stores, and shooting ranges. For a short while, people would buy any ammo they could get for any price. There were weeks here in January through April that we no ammo at all to sell for retail (meaning “out the door”). We kept it all for range use. We sold hollow point rounds for range use. At over $1 per round. To shoot through paper. Cringe worthy.
Supply & Demand: Gas & Ammo Prices
Now, here’s where people get mad, especially when they don’t understand how free market economics actually work in times of scarcity. Let’s use gas prices as an example, because the ammo situation is very similar.
When someone like Iran or another oil rich country or one of our idiot politicians does something stupid, gas prices go up. Why? Because gas is constantly moving – being bought and being sold – all across the world. Gas distributors like Exxon or Shell or BP aren’t looking at what today’s gas cost is. They’re looking at what the cost of gas will be tomorrow. When someone does something stupid, their price of gas goes up, and – since they’re in business to make a profit – they have to raise their price to gas stations accordingly, sometimes to the point at which people won’t buy gas.
And that is exactly the point. You raise prices to the point at which people stop buying because your supply is low, and you cannot meet the demand. Higher prices cause lower demand. Lower demand makes it somewhat easier to meet the demand for the product.
That’s where ammo prices were until just recently. A dollar per round – or more! – for 9MM was that stopping point. No matter how much people knew they needed ammo just in case one of these “mostly peaceful protests” got too close to home, they were not and still are not going to pay over $1 for one 9MM cartridge. That is the beauty of the free market system. Demand will subside when the price is too high, allowing manufacturers time to catch up, at least a little.
That Was Then; This Is Now
Maybe it’s easier to say “Ammo Shortage” than it is to say “There’s lots of ammo but it’s really expensive”, because that’s the current reality. After months of trying to get our hands on any ammo at any price, now we have ammo on the floor, and it’s not moving. It’s not moving because it’s too expensive. It’s too expensive because we HAD to order it at any price just to have ammo because it was in such high demand. But the price is so high that now it moves really, really slowly.
So, what now? Well, now we keep buying ammo for lower and lower prices (not low, but lower), average out our cost over time, and slowly lowering the price as we sell the most expensive inventory. It’s painful, but at least we have ammo in the store, on the floor, and expecting more.
When Will Ammo Prices Be “Back to Normal”?
Never say never, but my opinion is that we will not return to what we consider “normal” for ammo prices. “Normal” means $12-$15 or less for a box of 50 rounds of 9MM, and other calibers priced similarly. I hope I’m wrong, but I don’t think I am. Here’s why.
When all of the above happened in March 2020, nobody could have anticipated the results. Who could see 8,000,000 new first time gun owners in the US? Who would have predicted that certain “protests” would actually be allowed to burn, loot, and destroy entire cities for months on end? And, who could have guessed that ammo manufacturers would be TWO YEARS behind in meeting current demand? But that’s exactly what happened.
The Results of 2020 on Ammo Prices
While things have calmed down a little on the “protest” front, the embers are still glowing. The smallest match could stoke the fire in a second. In addition, the fact that idiot politicians allowed those “protests” to continue in the name of “free speech”, and led the charge to defund police led even more people to realize that they are their own protector and first responder.
Covid is not “gone”, and the fear mongering media has their hearts set on making covid the headline once again. “If it bleeds, it leads” is their mantra, so good news will always be buried. “Good News” would include an end to this insidious “pandemic”, and ammo prices returning to pre 2019 levels. The media will not report on either of those topics.
Because of that mantra, the US population is more on edge than we have been in 50 years, since the Viet Nam war (idiot politicians again!) protests divided us so deeply. But now, people across all political spectrums are taking up arms, and learning how to use them, practicing, and using ammo. That’s simple economics. More people doing more shooting means more ammo must be made. Higher demand leads to higher prices.
And all this is assuming nobody does anything stupid.