Oh, we were definitely getting gouged during the pandemic. I was working for a national LTL carrier on the dock, and had a trailer to unload. I opened the door and the first pallet on the tail was a wreck. A pallet of Federal handgun ammo. No broken cases so, no loose boxes or rounds. No problem, restack and reshrinkwrap. Then I found a manila envelope with the manifest. Imagine my surprise to see that the consignee of this ammo was only paying $219/cs ($10.95/50 rd) for 9mm while shelves were empty and prices were at unbelievable prices. I firmly believe that the gouging came most at the final point of sale.
Lucky Gunner Ammo
- Thread starter 57springer
- Start date
Retailers don't actually sell product - they're in the real estate business. They treat their shelves (and warehouses) as real estate. They gotta put SOMETHING on that shelf in order to pay the rent/employees. If one product isn't providing that profit, they jack up the prices on product that ARE selling to compensate.
Walmart taught me that lesson decades ago - they actually charged a slotting fee (an "up front" fee paid based upon each square foot of shelf space) in exchange for giving us shelf space on which to place our products - baseball trading cards. When I challenged the Walmart buyers, they said, "Our stores are expected to produce $X of profit per square foot of shelf space. If your product can't produce that profit, we'll give your shelf space to some other product. A slotting fee simply reduces the product-specific profit we need." That was Walmart's logic. Most retailers follow similar logic. Hard to argue with them - particularly when their push back was, "That's OK...we're not offended. We'll just merchandise some other products instead of yours."
High profit-per-foot on one category of items (ammo) was used to justify lower-than-needed profit on other product categories. This was particularly true when many grocery items and household goods (e.g. toilet paper, etc.) were out of stock because the manufacturers of those items couldn't keep up with the "run" on those items caused by CCP-virus-induced consumer panic buying. Ammo - a relatively "inelastic" product category (i.e., sales volume wasn't overly sensitive to product prices) was targeted by the mass merchandisers as a prime candidate for such "price gouging."
Walmart taught me that lesson decades ago - they actually charged a slotting fee (an "up front" fee paid based upon each square foot of shelf space) in exchange for giving us shelf space on which to place our products - baseball trading cards. When I challenged the Walmart buyers, they said, "Our stores are expected to produce $X of profit per square foot of shelf space. If your product can't produce that profit, we'll give your shelf space to some other product. A slotting fee simply reduces the product-specific profit we need." That was Walmart's logic. Most retailers follow similar logic. Hard to argue with them - particularly when their push back was, "That's OK...we're not offended. We'll just merchandise some other products instead of yours."
High profit-per-foot on one category of items (ammo) was used to justify lower-than-needed profit on other product categories. This was particularly true when many grocery items and household goods (e.g. toilet paper, etc.) were out of stock because the manufacturers of those items couldn't keep up with the "run" on those items caused by CCP-virus-induced consumer panic buying. Ammo - a relatively "inelastic" product category (i.e., sales volume wasn't overly sensitive to product prices) was targeted by the mass merchandisers as a prime candidate for such "price gouging."
I've actually found that buying directly from the smaller ammo manufacturer/retailers (True Shot, Freedom Munitions, et al) is the best day-in-day-out source of low-cost ammo. Plus, they frequently waive shipping costs in exchange for "at least $X of product sales."
Some of you need to spend a year or two as a retailer. Especially in such a time as the last three years.
In between the big box stores getting discounts by purchasing thousands of pallets at a time and the wholesaler limiting everyone else by saying "you must buy this (that you don't want) in quantity to get this (that you do want) in single, I don't believe a good many of you would make it.
It's no longer the good old days. EVERYTHING costs more. So you think we as retailers are just going to arbitrarily jack up our prices because we are so greedy? No, we raise prices because OUR costs went up.
In between the big box stores getting discounts by purchasing thousands of pallets at a time and the wholesaler limiting everyone else by saying "you must buy this (that you don't want) in quantity to get this (that you do want) in single, I don't believe a good many of you would make it.
It's no longer the good old days. EVERYTHING costs more. So you think we as retailers are just going to arbitrarily jack up our prices because we are so greedy? No, we raise prices because OUR costs went up.
NikA
Hunter
I don't envy anyone in the retail business. In the past, retailers and other middlemen served a real purpose in connecting customers with minimal information to producers' or wholesalers' products. However, the internet now provides the connection directly and the result is much slimmer margins for retailers and perhaps not a good long term economic outlook for this sector of the economy.
That said, I am generally frustrated by middlemen, and doubly so by those that offer what I feel is inadequate expertise, so I would not miss most gun shops I have visited in the past.
That said, I am generally frustrated by middlemen, and doubly so by those that offer what I feel is inadequate expertise, so I would not miss most gun shops I have visited in the past.
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Last month I purchased a gun from budds for $615. (overpriced yes, but I have been looking for this gun for 2 1/2 years, so I thought I had to pay that price). The next day budds had the price of $489 in their website. I emailed them and asked them to honor that new price, but they would not stating a few flimsy excuses, namely they had to pay more for them so I had to pay more too. Three days later they upped the price to $515. Then a day or so later they increased the price to $615. The next excuse they said was that they cannot change the price as the price they paid determined the price I had to pay. I stated they have the ability to charge any price they want, but that fell on deaf ears. So the largest gun store can gouge any customer without any recourse. The retailer can gouge you any way they please.
Larry8 wrote: "So the largest gun store can gouge any customer without any recourse. The retailer can gouge you any way they please." Larry8, that retailer can't gouge me if I don't buy from them. And if enough customers feel the same way, that retailer will be compelled to change. Or go out of business.
bisleyfan41
Blackhawk
Maybe you, but not all retailers operate the same. Cheaper Than Dirt is but one example.
CTD is what is known in the "trade" as a "short-liner." CTD does not carry a full range of products; in fact some gun makers chose not to sell to CTD, or sell only certain of the maker's products. Why? Because (in the days prior to the COVID-induced panic, CTD was one of the reliably-least-expensive sources for the products it sold. Gun makers don't like that - it distracts from the gun wholesalers' profits, and from that, the gun makers themselves.
So...during the COVID panic CTD had fewer products for sale than full-line retailers. To make a profit, CTD had to mark up its product prices, often above the prices charged by direct competitors, in order to stay in business. So the very strategy that made them a popular source for guns/ammo in the good ole days bit them in the butt when the bad times hit (and remain, to some extent).
I'm not making excuses for CTD - far from it. But don't think CTD's owners are greedy or stupid. They aren't. They're just trying to survive in a market that did not exist when CTD launched its business strategy.
While I’ll buy bulk ammo online when the price is right, I consider myself fortunate to be able to buy a box of ammo once a week at a LGS, which I do even if the cost is higher than I can find online.
vlavalle
Blackhawk
The fact that it is 'no longer the good old days' is exactly what we all are talking about. I can see how COVID impacted the availability of ammo since people stop going to work and making ammo. And some p[rice increase due to ;limited avaiabiity makes sense, but to triple and quadruple the cost to the use is definitely gauging. Chealerthandirt is NOT the pnly retailer that jump on the bandwagon and drastically increased their prices. I also some ammo retailers either went of of business or dropped a lot of calibers or specific cartridges.
I have an ammo file that I have been building for over a dozen years, so I can track exactly what was charged 2, 3 4, 5 years ago, per ammo. My file has well over 3,000 entries, where each entry links to a webpage from a retailer, where you can buy that ammo. And clearly, some of the retailers socked it to us all. And today, with availability coming back, and prices definitely lowering, some retailers are still in the sky.
So, if you are a retailer, let us know what your ammo price was 4 years ago, 3 years ago, 2 years ago, 1 year ago, and now. This will clearly show if you were in the gouging business too or not. Pick two or three popular rounds from different popular calibers, such as 9mm, .45 ACP, .357 Mag, .380. .38 spec, 40mm, all in the handgun ammo. I can probably verify your numbers since I have been tracking most ammo over time as well. My ammo file tracks 35 handgun calibers and 25 rifle ones.
DGW1949
Hawkeye
Some here must believe that there is some sort of giant 'ammo supply in the sky' that just magically furnishes ammo to dealers without ever charging price increases...I mean really, is it not feasible that the ever-diminishing buying power of the U.S. Dollar applies to not only retail sales but to wholesale and distributorship sales also?...To hear some of you tell it, anyone whom has had to raise retail prices any time in the past couple of years or so is automatically guilty of "gouging"....Don't get me wrong, I don't sell ammo so it ain't nothing to me one way or the other. I just don't get the logic, that's all...have ya been to the grocery store or priced a new truck lately?...Just sayin'.
DGW
DGW
giant 'ammo supply in the sky'
Yeah, I know how this goes. I used to own a small gun shop and had supply issues related to the low volume. Last week, I was in a farm and home chain store that was licking it's wounds after the great ammo shortage of a couple years back. An entire lower shelf in the ammo section was loaded with cases of Aguila 22 HVHP. I tried to help them out but the manager said he couldn't sell for under what it cost him. OK, but the price was 3-5 cents per round higher than current pricing. Sorry Dude, all those backorders are going to make you eat the loss sooner or later.
Yeah, I know how this goes. I used to own a small gun shop and had supply issues related to the low volume. Last week, I was in a farm and home chain store that was licking it's wounds after the great ammo shortage of a couple years back. An entire lower shelf in the ammo section was loaded with cases of Aguila 22 HVHP. I tried to help them out but the manager said he couldn't sell for under what it cost him. OK, but the price was 3-5 cents per round higher than current pricing. Sorry Dude, all those backorders are going to make you eat the loss sooner or later.
bisleyfan41
Blackhawk
I don't know if I am one of the ones you're referring to, but I'll respond because I don't think we're talking the same thing. I totally understand the price increase brought on by several factors such as record inflation brought on by the never-ending flow of stimulus checks, a reduced work force due to the same, the pandemic and all that it brought on, civil unrest causing fear across the country, a near-monopoly on domestic ammo production where one conglomerate controls upwards of 80-90% of the ammo produced thereby allowing them to charge whatever they want AND scale production to precipitate higher costs, good 'ol fashioned supply and demand, etc. I don't like it, but I understand it and accept it.
The gouging I'm referring to happened mostly at the beginning and middle of the China virus where several companies would retail ammo at a certain price range, then others (like CTD, but there were quite a few others) would raise their prices to double, triple, quadruple or more for the exact same product. For example, say 115 gr Federal 9mm ball ammo was selling for 30 cpr, some were charging $1 per round or more for the exact same item. That's gouging. Those companies are paying the same wholesale as every other store of the same volume, they just chose to hose their customers. If there's 50 stores selling something at one price and 4 or 5 selling the exact same thing for 3x the price or more, they're gouging. The good thing is, in most cases, you simply don't buy. I'll never buy from CTD or others like them ever.
The other thing that became obvious to me was the double edged sword of places like Gunbroker. You can find just about anything you want there because of the national market of ready buyers and sellers. That's the good. The bad...there were a couple of shops local to me who were getting ammo in when it was still pretty hard to find on shelves. But they realized that they could either sell a box of 357 mag ammo for $35 in their store to the local customers OR they could list on GB and sell it for 3x that and sell a case at a time. So, the local ammo supply was made worse because local ammo was there, just being rerouted to the profit king. Now you can debate whether or that's right or wrong. But I will no longer do business with them, either.
DGW1949
Hawkeye
Hey bisleyfan41 .....I'm getting what you're saying and yeah, in a case like that, I agree 100%. Fact is, I don't trade with CTD either, and for the very same reason you state....And there are other suppliers I won't trade with either. And there are a couple of gun companies that I will not ever buy a another new gun from strictly because of their past (or present) politics....Still though, the fact remains that there is a large segment of gun owners who complain about this or that ammo dealer while they sit around waiting on what they call "pre-panic" prices to magically reappear....I guess my question there is "which panic are they pissed about, for there's been several?"....And just as a side note, the dealer I most often buy from keeps his customers informed as to upcoming price increases on his end. Call me crazy but if I wait too long and he needs to charge me a bit more than last time in order to maintain a profit margin ain't gouging in my book. It's simply a sustainable business practice....Once upon a time, I spent several years in the gunshow business. Even back then, one had to be mindful not to sell something for what it would cost him to buy it back. That's just how it works, and especially during periods of high inflation like we're seeing these days.
No offense intended to you or anyone....Just sayin'.
DGW
No offense intended to you or anyone....Just sayin'.
DGW
What ammo cost, or for that matter what anything cost, 4 or 5 years ago is meaningless, particularly without wholesale pricing. But whatever makes you happy dude.
anachronism
Single-Sixer
I cast, I reload, and I buy reloading supplies in bulk, so I really don't buy that much factory ammo for daily use.
