For those of us who love shooting, the shortage of reasonable cost ammunition is a growing problem.  These costs are the best example of supply and demand in an economy fueled by the fine balance of consumer behavior and supply chain capabilities.  The combination of the election of a President perceived to be anti-gun and the growing choir of those set to eliminate the freedom to purchase guns as we have in the past has fueled a hoarding of all things gun related.  I have never seen anything like it.  But others have.

In 2008, upon the first election of this President, a similar shift in supply happened when then new President Barack Obama took office.  A box of 9mm ammunition quickly rose from $11 per box of 50 to almost a dollar per round.  Then, over time, as the fear and concern began to meet reality and hoarding subsided, the prices gradually subtracted to what again only a few weeks ago was a reasonable price.  So, what’s the right move here?  Should we buy all we see to make certain we have enough for ourselves or should we leave a box for the next sportsmen to come along?

First, just relax a bit.  There will be plenty of ammunition to go around and the faster we stop this madness of buying dozens of boxes the faster it will return to normal.  The supply chain of ammo manufacturers has only a limited amount of capacity to make high quality ammunition.  Hoarding strips the available ammunition reserves and leaves the makers of ammo with a very real dilemma as to whether expanding manufacturing capabilities is the right thing to do or not.  Investing in more equipment and people would be fine now while prices are high but what happens when the panic subsides and people stop buying ammo in such huge quantities?  The maker of ammo has a surplus of capacity and finished goods and that will begin to drive prices down in order to rid themselves of unnecessary inventory.  As the price drops so does profit and soon the manufacturers are left with higher overhead from the expanded facilities, lower cost inventory to sell and employees that are unneeded.  So, for most, the best idea is to simply stay constant with their current capacity to manufacture and be patient.  They will earn record revenue during the shortage and use that to hold them over during what will absolutely be lean months soon to come.  After all, when all the people who have been rushing for guns have made their purchases,  and they have hoarded the cache of ammunition they either believe they need or can afford, the supply will begin to grow and prices will again begin to drop.

For now, buy only what you need plus a very small safety margin.  Let’s not be guilty of making things worse by using panic driven decision making.  Be calm and this too will pass.

Safe shooting

JJ

Advertisements