Got some. Most didn't...

[SaxonPig]

All I can do is repeat what I already said but some of you seem unwilling to believe.

Every... I mean every retail dealer of ammo I have asked has told me that he is NOT getting as much 22 ammo as he usually gets. Some say they go weeks with no deliveries at all. When they do get 22 ammo they don't get anywhere nearly as much as they ordered and it's nowhere nearly as much as they used to get before the panic started. This lack of ammo being sent to the dealers is not caused by panic buying. Panic buying empties the shelves, this is the shelves being bare BEFORE the hoarders show up at the store.

The ammo manufacturers SAY they are running at full capacity. I have no way to verify this but I have no reason to doubt them. Of course they want to sell their products so it makes sense that they will make as much as possible if it's selling. BUT, again, the dealers aren't getting it. The ammo seems to be disappearing somewhere in the supply line. Perhaps because so many buyers are willing to pay up to 5x retail employees along the line are buying the ammo to sell online or at shows. An owner of a gun shop posted on a forum that after the Sandy Hook shooting his employees bought all the ARs in stock with their employee discount then turned around and sold them for a huge profit to shoppers coming in the store who couldn't find one. This would explain the mountains of overpriced 22 ammo offered by sellers (not dealers) at gun shows.

The 22 ammo shortage is not just a demand problem, it is also a supply problem. The retail dealers who will sell at normal retail prices can't get supplied.

 

[Brian Pfleuger]

Disappearing in the supply chain?

Unfounded conspiracy, anyone?

What we have is a lack of information. It doesn't matter if you know 2 or 3 or 30 local dealers. They don't amount to butterfly flatulence in a hurricane. It's like trying to say you know what an elephant is because you have a nose hair from one.

It's not a simple supply and demand. There are MULTIPLE LEVELS of the supply demand chain. One or two or ten local dealers don't know anything about the wholesale supply chain. Are they getting less ammo? Maybe. They're small fish in a giant ocean of buyers.

This is an ocean of buyers where every buyer is ordering every round they can possibly order. If you're the supplier and your orders have tripled while your ability to supply has doubled, what happens? Who gets the ammo? The dealer that used to order 10 boxes a month or the nationwide retailer that used to order 20,000 boxes a week and now wants 40,000?

That national retailer isn't getting their 40,000 either because now all those 10 box a month dealers, who order from wholesales not direct, are ordering 50 boxes a week and their suppliers have also tripled, quadrupled, whatever, their orders because they don't have ONE dealer that went from 10 boxes a month to 200, they have 1,000.

It's very simple. If demand rises by 1000% and production only doubles, you're going to have supply problems.

Look at gunbroker for 22 ammo. There's no shortage. It's a buying frenzy. A buying frenzy of self-fulfilling prophecy.

Don't look for conspiracies when simple illogical panic can explain what you see.

 

[Tom Servo]

Every... I mean every retail dealer of ammo I have asked has told me that he is NOT getting as much 22 ammo as he usually gets. Some say they go weeks with no deliveries at all.

That's because most of it is going to the big-box retailers like WalMart and Cabela's. Those guys write bigger checks than a whole city's worth of independent dealers, and filling their backorders takes priority.

Of course, those are the same guys that are letting a small pool of buyers hoard it all up.

There's really no conspiracy or perfidy going on out there.

 

[iraiam]

Every... I mean every retail dealer of ammo I have asked has told me that he is NOT getting as much 22 ammo as he usually gets. Some say they go weeks with no deliveries at all. When they do get 22 ammo they don't get anywhere nearly as much as they ordered and it's nowhere nearly as much as they used to get before the panic started. This lack of ammo being sent to the dealers is not caused by panic buying. Panic buying empties the shelves, this is the shelves being bare BEFORE the hoarders show up at the store.

It is in fact being caused by panic buying and hoarding. The dealers are getting ammunition, Even Wal-Mart, I have personally witnessed pallets of ammunition sold out in 4 hours. I have personally seen a few different Wal-Mart stores here put out several thousand rounds of 22LR at 3 am, it was ALL sold out by that afternoon.

The reason that these dealers are not getting as much ammo is only because the demand has went way up over what was already an elevated demand, It will likely take a few years for the industry to catch up, assuming demand remains at this extreme level. It takes quite a bit of time to add production. Automation, machinery, and labor are very expensive, you cannot expect manufacturers to spend millions on adding production capacity for a temporary spike.

There's no hokus pokus about it, simple arithmetic and logic.

 

[Dashunde]

Correct me if I'm wrong... but don't the Walmart trucks (or their bulk shippers like Werner) back right up to the ammo plant docks for a full load that's taken to Bentonville for nationwide distribution like everything else they sell?
If so, where is their stock still going? The guys behind the counter say they're just not getting much on the trucks anymore.

So have all of the manufacturers just cut back the order sizes for the big chain stores?
Thats the only thing that really explains their lack of supply since they buy direct.

I dont think there is really a conspiracy, but it would appear the manufacturers are passing on the huge discount orders in favor of the more profitable independent distributors who pay more per box than Walmart is willing or accustomed to paying.

 

[iraiam]

again, simple arithmetic would dictate, the more that demand exceeds the supply, the percentage of order fulfillment goes down across the board. I suspect the manufacturers are trying to please as many of their customers as they can, which would be standard operating procedure in for any business in their situation.

I don't think they can give the really big sellers too much preference, because then nobody else would get any of their product, a very bad business decision over the long run.

 

[SaxonPig]

I said EVERY dealer... even the Walmart manager tells me he is NOT getting anywhere near his usual allotment. This is not my imagination, it's what I am being told.

I'm not trying to start a big conspiracy theory. But I don't think it's crazy to suggest that guys who work in the industry are siphoning off some of the ammo for themselves. If you worked for a big wholesaler, and could buy bricks of 22 ammo for $15 on your employee discount knowing you can take it online or to a show and sell it for $50-$75 wouldn't you bag some? Maybe a lot?

If this is not happening, or if it would just be a drop in the ocean, then where is it going if not to the retailers?

Perhaps the dealers lied to me. They are actually getting plenty and it just sells out quickly.

Maybe after January of 2017 people afraid of new laws will relax, everybody who wanted 20,000 rounds on hand will have it, and supply will catch up with demand.

 

[iraiam]

Of course they are not getting as much, and i and others just explained why.
Now we're just repeating ourselves, which is a waste of everyone's time, I'm out to do something more productive.

 

[Evan Thomas]

And on that note... closed.

Feel free to continue the discussion, if you feel the need, in the "Where is everything..." thread.

 

[Unclenick]

(Sorry Vanya; you caught me in the middle of delayed composition, so I didn't see you'd closed this before I posted.)

I said EVERY dealer... even the Walmart manager tells me he is NOT getting anywhere near his usual allotment. This is not my imagination, it's what I am being told.

…If so, where is their stock still going? The guys behind the counter say they're just not getting much on the trucks anymore.

That's actually reasonable to expect to see. It used to be Walmart backed the truck up to the ammo plant and by the time that shipment was broken out and dispensed through their system, they'd have had to divide it up only among the stores that had run low since last receiving any, while the other stores were coasting on existing stock. Now it's every store running low and needing part of every shipment every time there is one. That reduces how much can be sent to each. It's also likely they have the packaging unitized and don't send less than a unit to each store, and therefore don't always have enough units to go around, so they have to resupply on rotation.

A second factor is that buyers for the big box stores demand big discounts in return for their high purchase volumes. If I'm an ammo maker with a contract with a big box store at a lower margin than I can get from my other buyers, I'm not going to give the big box boys one more round than the contract requires, and unless they pay more, I'm not going to be interested in negotiating higher volume contracts with them at the prices they are willing to pay until I have excess capacity for that kind of deal. It's an instance where big-box buying strategies could backfire.

What is going to be interesting to see, over time, is what portion of the added demand becomes permanent. With more gun owners than ever, it seems reasonable to expect at least some permanent increase in prices form more folks competing for the same pool of raw materials. Hornady says their production is up 30% and they've added staff. I know CCI brought more primer capacity on line during the previous shortage, yet those are obviously being scarfed up. I think permanent change will, ultimately, justify more suppliers adding plant capacity, but I think they're slow to do it just because of undertaking due diligence to insure they'll be able to recover the investment in capacity by not just assuming all the added demand is permanent.

I remember Sierra said there'd actually been a sales slump in the early mid-2000's, and that had limited how much raw material they were buying ahead. They said it took awhile for an order for gilding metal for jackets to get through the foundry and be on a truck to them, so they try to buy ahead during market dips in metals prices. As a result of that strategy, when the first panic buying in 2006 occurred, what they thought was going to last them two years was gone in three months. So that wasn't even an example of failure of production capacity, but just the raw materials pipeline being backed up. In the NRA video from this year, Steve Hornady said the same thing, mentioning not only copper but their powder suppliers said nitric acid for making nitrocellulose was in short supply. It's a whole collection of things happening at once.