If you are already running at capacity, you wouldn't go to the capital and labor expense of opening new lines unless the return justified the investment. In a period of scarcity, that expanded line will only marginally suppress pricing, and when the follow up glut develops, the ROI on your new line will plummet.
Good article in Forbes on the ammunition shortage
- Thread starter Mike Irwin
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If you are already running at capacity, you wouldn't go to the capital and labor expense of opening new lines unless the return justified the investment. In a period of scarcity, that expanded line will only marginally suppress pricing, and when the follow up glut develops, the ROI on your new line will plummet.
Mike Irwin
Staff
Well yes, of course.
I took your comment to be a general one, not one that addressed only maximum production conditions.
I took your comment to be a general one, not one that addressed only maximum production conditions.
dogtown tom
New member
Sure they will....if the price of gas lead and copper fall. In "non panic" times retail ammunition prices are affected more by the cost of raw materials and transportation costs than by demand. While demand for ammunition rises during hunting season.............usually you'll see ammunition sold as a LOSS LEADER (especially .22).
Ammunition is heavy and requires shipping via Ground transportation. No Flat Rate USPS boxes. Shipping costs may have the biggest impact on ammo price flunctuations.
Huh?
If ammunition manufacturers colude or engage in price fixing its a pretty serious Federal crime.
The business of any business is to stay in business and make a profit for THEIR business........intentionally withholding ammunition from retailers makes how much profit for the manufacturer?...........NONE.
Any manufacturer who cannot supply enough product to the retailers at a competitive price risks losing business to the manufacturer with better pricing and available product.
Ammunition priced as a loss leader gets traffic into the store.....and those buyers often buy something else. Just as grocery stores use milk and bread as loss leaders to get you in the store.
Mike Irwin
Staff
"Sure they will....if the price of gas lead and copper fall."
The price will also drop if the supply begins to rise due to lesser consumer demand and especially to competition between companies/sellers for the same product or class of products.
That's simple economics.
Manufacturers and sellers both will drop prices in an attempt to shore up flagging sales.
Once again, in sales and production both, sharp sine wave cycles are bad. Steady state sales levels are what you want.
The price will also drop if the supply begins to rise due to lesser consumer demand and especially to competition between companies/sellers for the same product or class of products.
That's simple economics.
Manufacturers and sellers both will drop prices in an attempt to shore up flagging sales.
Once again, in sales and production both, sharp sine wave cycles are bad. Steady state sales levels are what you want.