Someone please explain to me...........

JohnKSa said:
No, it just means that it is expected to come back down to normal (or something generally close to normal) at some point in the future that is not terribly distant.

It doesn't matter very much to the ammo companies how fast that happens unless they know for certain that they could recoup any expansion costs before it happens.

We know from past experience, that spikes in demand lasting a few years don't prompt very much in the way of expansion investments on the part of ammo companies, so there's really no reason to expect that they will respond to this one unless it somehow becomes obvious that the demand isn't coming back down within just a few years.

Something will have to convince the ammo companies that demand won't drop and leave them with expensive floor space and equipment that they haven't finished paying for yet.
Click to expand...
Which is why I'm thinking and saying that current manufacturers are not to be depended on to increase supply, it's from startup operations like what PSA is doing with steel case ammo. Basically, if those already in the ammo business aren't going to spend money to expand then someone else will and take market share away from them.
 
It's a risk. Maybe they will succeed and take away market share, maybe they will go bankrupt. The established companies feel like they have a recipe for success and they will probably stick with it until something forces them to change.
 
TruthTellers said:
Which is why I'm thinking and saying that current manufacturers are not to be depended on to increase supply, it's from startup operations like what PSA is doing with steel case ammo. Basically, if those already in the ammo business aren't going to spend money to expand then someone else will and take market share away from them.
Click to expand...

All the same "ifs" will apply to a new producer. If you already know how to churn out 22lr and don't see a reasonable return on new investment, being new to the business leaves you in that same market.

I had a client a few years ago who was gearing up to produce polymer cased 5.56 and 7.62x51 for overseas armed service contracts. These weren't the brass ended/polymer tube rounds from 30 years ago, but completely polymer cases. I don't know what happened with it.

If there is going to be a new manufacturer, I'd look for it to be a group with a different manufacturing method that isn't already mastered by the rest of the producers.
 
Which is why I'm thinking and saying that current manufacturers are not to be depended on to increase supply, it's from startup operations like what PSA is doing with steel case ammo. Basically, if those already in the ammo business aren't going to spend money to expand then someone else will and take market share away from them.
Click to expand...

Unless they are making all of the components themselves, they aren't likely to really take away any market share. Many, maybe all, of the smaller US manufacturers are dependent on the larger manufacturers for component supplies. This is a HUGE part of the reason why we don't see new startups coming in and dominating the market or even a portion of the market (say, pistol calibers) because they can't make ammo without the components they don't produce themselves.
 
Double Naught Spy said:
Unless they are making all of the components themselves, they aren't likely to really take away any market share. Many, maybe all, of the smaller US manufacturers are dependent on the larger manufacturers for component supplies. This is a HUGE part of the reason why we don't see new startups coming in and dominating the market or even a portion of the market (say, pistol calibers) because they can't make ammo without the components they don't produce themselves.
Click to expand...
I'm aware of that and I did notice ammo companies like Inceptor shut down production because they couldn't get primers. This supply crisis is likely going to cause a lot of the smaller ammo makers and really all producers of goods to rethink how they do business and I doubt PSA is looking to rely on outside companies to supply them with components.

PSA isn't like other startups in that PSA is a prolific manufacturer of budget ARs and AR parts; they're a company that saw a demand for a type of ammo that isn't made in large volume in the US (steel case) and are filling the void that Russian made ammo cannot fill anymore due to import bans.
 
PSA isn't like other startups in that PSA is a prolific manufacturer of budget ARs and AR parts; they're a company that saw a demand for a type of ammo that isn't made in large volume in the US (steel case) and are filling the void that Russian made ammo cannot fill anymore due to import bans.
Click to expand...

PSA won't be taking market share from companies that had no interest in that segment of the market in the first place.

So PSA is making all of its own components? Really?

Just what brand name are they using for their ammo?
 
After PSA starts producing steel case ammo in the Russian calibers, I expect they'll move to produce 9mm and 5.56 in steel and probably brass too. That's when they'll be taking market share.
 
BINGO
you need an increased supply of the raw materials.
Click to expand...

In my opinion the biggest hurdle the ammo companies would have in expansion.
Wife and I ordered a bar stool on Memorial day and were told 10 weeks. Last contact made to us is now April, 11 months later, maybe
 
Double Naught Spy said:
Which is not in their plans, LOL.
https://gundigest.com/article/psa-tooling-up-for-domestic-steel-cased-ammo-production
Click to expand...
Baby steps. The demand for 9 and .223/556 is so much higher than all other calibers that once they have a factory running that makes ammo it won't take much to expand the operation.

It won't happen for years, but I see it as inevitable, especially since the Russian ban affects more than 3 rifle calibers, it affected all steel case ammo.
 
The thing with 8 million new gun owners is that most of them aren't going to be consistent shooters. They aren't going to be out at the range every weekend going through a couple of hundred rounds per session. It would be nice if The Russians and the Americans got along. I sure could use those Tula primers. My understanding is that Russian ammunition and primers are no longer being imported into this country. That's why I am being frugal with my components. Because they are hard to get.
 
Right, 8 million new gun owners aren't going to be shooting every weekend, but a bit of hypothetical math was pretty eye opening to me.

Let's say that 10% of those new gun owners make it a practice to go to the range once a month and shoot a box of ammo to stay familiar with their new purchase. Maybe take the family (I know a family that fits this bill precisely).

So, we have 800,000 monthly shooters * 50 rounds.

That is 40,000,000 new rounds.. a month = 480,000,000/yr in new demand.
 
I wouldn't count on it.

Even the former LEOs I have amongst my family and friends don't shoot regularly like my daughter and I do.

Between competition and practice/drills, we probably went thru at least 1000rds per month before she went off to the military.
 
I find it humorous that just because prices are going up, some people seem to think someone is cheating them or ripping them off. Time for school!

As others have mentioned, manufacturers are working around the clock to make the goods people are asking for. The overtime and additional staff cost more money, so the costs get passed on to the consumer. Prices rise. That's capitalism at work, the free market supplies all the demand it can. And when they can't supply all the demand the prices start to climb because people bid up the materials and finished goods.

Also, have you noticed there is a world-wide pandemic? Many countries were completely shut down for the past couple of years, so supplies of needed metals and chemicals and gunpowder have dwindled, and (again) that supply/demand equation kicked in.

Remington supplies about 25% of the ammo and components on the market. Remington ammo plants were shut down for over a year, causing ammo inventories to drop to very low levels. Other manufacturers tried to fill the gap, but many don't have the capacity or supplies to just put out an extra 100% of their normal output. New equipment is expensive and lead times run into years at times (especially during a pandemic), and some of the needed supplies were not available even if they had wanted to do so.

So tell me again who you think is trying to rip you off just because ammunition prices are high? Manufacturers don't have a duty to supply you with goods at a price you want to pay, they supply goods at a price where they can make enough to pay employees and expenses and maintain equipment and make a profit at the end of the day.

Here's the solution if you think someone is trying to rip you off by jacking up prices: go to the bank, borrow several million dollars, order equipment, build a plant, get permits and insurance, hire employees, and get to work fixing the problem! More supply is the solution to the supply/demand equation! See? Easy!
 
Here's the solution if you think someone is trying to rip you off by jacking up prices: go to the bank, borrow several million dollars, order equipment, build a plant, get permits and insurance, hire employees, and get to work fixing the problem! More supply is the solution to the supply/demand equation! See? Easy!
Click to expand...

No, the solution is simple, but not EASY! :D

First, you've got to be someone the bank considers worthwhile to loan those "several million" dollars to. And that includes being someone the bank considers solvent enough to make the payments during the SEVERAL YEARS it will take to get your new ammo plant up and running, before any profit can be realized.

AND, one also must assume that the current situation, counting everything involved, does not significantly change while you are building your plant, waiting for delivery of special machinery, hiring and training a workforce, obtaining the needed raw materials and government approvals and every thing else in the millions of small details involved.

A change in fuel costs and transportation capability can screw your budget easily. It may take the government years to review and finally approve the Environmental Impact of your proposed ammo plant. The list of things needed is huge, and quite literally, you're going to be bleeding money for years until you get ALL the details working, and then, on top of that, are the ups and downs of the free market.

Additional complications come with marketing. Suppose you do manage to get your new plant up and running, and suppose Murphy happens and a batch of less than perfect ammo gets past your QC.

Somebody on U Tube gets it, tells the world its crap, and suddenly you have a couple million tube-heads telling the world everything you make is crap, don't buy it, and telling them that 24/7 365 days a year....

Possible that might have an effect on your bottom line, too...:rolleyes:

Sure, the solution to the issue is simple, meaning its straightforward, but doing it isn't easy. Or cheap.
 
dahermit said:
There is no point in them investing in additional manufacturing capacity when they are reaping the huge profits with the way it is.
Click to expand...
Do you have a credible source that outlines and defines these "huge profits" as they relate specifically to ammunition?
 
lordvader said:
The thing with 8 million new gun owners is that most of them aren't going to be consistent shooters. They aren't going to be out at the range every weekend going through a couple of hundred rounds per session.
Click to expand...

Even if each one only shot five boxes in all of 2021, that's still forty million boxes of ammunition.
 
Something to keep in mind is that ammunition manufacturers also need primers! And, I would also imagine they (manufacturers) get first dibs on primers. So,..................
 
fauxpa46 said:
Something to keep in mind is that ammunition manufacturers also need primers! And, I would also imagine they (manufacturers) get first dibs on primers. So,..................
Click to expand...
This is what upsets me most about this situation. I can understand not being able to easily increase output of fixed ammunition because it requires more raw material, machines, and money to do it, but what's keeping companies from producing more primers? At the least it's one press machine for the cups, another for the anvils, and then some simple tooling to charge them and mate the cups and anvils.

Again, it costs money and corporations hate spending money until they realize they have to in order to meet demand. For all I hear about how slow government is, the private industry sector is just as slow and inflexible and behind the curve.
 
"Profit margins"

If, as a business owner, you can make $0.15/unit, vs. $0.05/unit, with the same manpower, which would you choose?
 
You must log in or register to reply here.
Back
Top