Ammo/Reloading Costs

[shooterg]

I've seen more availability and some small price decreases since Remington started shipping again. I am curious as to what the manufacturers are charging distributors . Are distributors/retailers making hay while the sun shines or have the manufacturers actually increased their prices 2-3 fold ?
I'm fine with supply and demand determining costs at my end, just curious as to where the real profit in the supply line is.

[ryanmattes]

I think manufacturers costs have gone up due to supply chain problems during covid, but that should settle out over the next year.

Manufacturers are paying a bit more, so wholesalers are paying a bit more than that, so retailers are charging even more.

If I had to guess, I'd say that when it settles out, the new normal will be a bit more expensive than before, but it shouldn't be a lot more. $35 a brick for primers by mid-2022, instead of $30 like it was before?

Unless the Dems make a move on reloading supplies between now and then.

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[bakerjw]

Remember when you could shoot 22lr all day for 2 to 3 cents a round? After one of the last great ammo surges, manufacturers realized that they could make as much profit on 22lr at 10 cents around while producing a fraction of their former volume. Keep supply short, demand stays high and prices stay there accordingly.
I don't see a future where primers are ever below $60.00/1000.

[Electrod47]

Quote: "I'm fine with supply and demand determining costs at my end, just curious as to "where" the real profit in the supply line is."

You'v kinda pointed to the answer to your question. Today it seems there are at least 4 participants handling new production ammunition.

1.The producer/manufacturer: Most say they are working overtime/paying higher input costs Frt/raw materials. Please see LME London Metal exchange for uptick in copper/Lead. The main consumers of those two metals are not ammunition producers, so they are not buying in large enough quantities to justify a lower cost so ammo guys are paying a premium price even higher. You would imagine since they have a long term business model and hundreds of employees usually they will control costs as best they can to keep a strong customer base happy and maintained over the long term. The producer mainly sells to the Commercial Buyer.

2. The Commercial Buyer. That could be a large scale secondary buyer /supplier who has contracts with the producer initiated over years to commit to buy certain amounts annually. The life blood of any large scale company is to have willing buyers of your products at your door. So, the Commercial Buyer plays an important role for the producer. Producers have to be able to establish an annual budget based on sound business principles. They need the Commercial Buyers large scale purchases. Not a thousand LGS orders. A Commercial Buyer could be a Walmart's annual buy. Dicks Sporting or Academy etc. These buyers would have their own pricing formula geared to keeping their own customer base satisfied. There could be other sub-groups with in this arrangement with the Commercial Buyer who sell directly to lesser consumers. and finally to the private "Retailer."

3. Retail Sellers: Smaller Commercial buyers who have a contract with the larger Commercial buyer. not a Walmart or Academy. These are smaller companies who supply your local sporting goods/LGS stores and work in smaller quantities. These guys pay a higher price than Commercial Buyers also. What happens when you take a smaller position in a bulk purchase? You pay higher shipping cost. You pay higher premiums that can't be diluted over a cost per/round etc. Timing of these purchases by the small retail seller are crucial to controlling the cost passed onto their customers. Unfortunately timing has not been in anybody's favor lately. Finally we come to the last but least guy in today's equation. where the real profit is being had on a small scale. "The Opportunist"

4. The Opportunist: Love him-Hate him valuable service to the needy or dishonorable dude. Now we get to where the I think is the crux of the inquiry. The persons or persons who some how. some where along the supply line have obtained enough bulk ammo they can take full advantage of the supply and demand thesis on internet auction sites. Right or wrong. That's where the real profit is right now. And its distorting our view whats going to be the future.

All these forces in motion we would be wise to remember the Opportunist in the scheme of things is a very small part of the profit being realized by the current market condition. All the statements I've read from CEO's of ammo manufacture is they are keeping the cost down. They all mention they are booked up for the next two years. Most likely with orders from Walmart. Academy, Dicks etc. So lets look to those prices and not to Gunbroker. What ever we were paying in 2020, is likely when the dust settles, going to have a 5-7 percent mark up. Mainly due increased cost in international mining.

[Huskerguy]

I don't pretend to know all of the factors but these I do know.

Anything to do with metal is going up almost on a daily basis. Talk to anyone who has to purchase metal products, prices are rising daily at least. Brass has to be in that group of metals going up.

Then factor in overtime costs for employees and pressures on wages.

My goodness, everything is going up in price right now, including ammo and components among many other things. And we haven't even seen the proposed taxes on these things yet.

[Shawlerbrook]

Just based on everything else( have you been to a lumber yard lately?) I am agreeing with ryanmattes, everything has gone up quite a bit in the last couple years....fuel, wages, raw materials,labor,etc. Add to that the drastically increased demand to anything that goes BANG and you have a perfect storm. Things will slowly become more available, but prices will never get back to 2017 levels. Just my opinion.

[Burnt Fingers]

I think manufacturers costs have gone up due to supply chain problems during covid, but that should settle out over the next year.

Manufacturers are paying a bit more, so wholesalers are paying a bit more than that, so retailers are charging even more.

If I had to guess, I'd say that when it settles out, the new normal will be a bit more expensive than before, but it shouldn't be a lot more. $35 a brick for primers by mid-2022, instead of $30 like it was before?

Unless the Dems make a move on reloading supplies between now and then.

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Price increases have been released by CCI, Federal and Winchester. IF everything settles out then primers will be in the $35-$38 range for standard primers. Raw material prices have gone up quite a bit. There are kung flu related shortages throughout the whole supply chain.

Manufacturers aren't making bank. It's everyone after that in the chain that's raising prices.

Some of it is to be expected. If your business is set up to sell 1,000 widgets a month for $1 each and your profit per widget is $0.20 when your supply of widgets is cut to 100 per month from your supplier then you're going to have to raise prices to stay in business. You would have to make $2 per widget to see the same profit.

[Garyshome]

I have been able to acquire some berry's plated boolitz for a good price from the LGS.They have also had some powder, primers not so much. In the past couple of months.

[Bmi48219]

.I don't see a future where primers are ever below $60.00/1000.

I’m inclined to agree in principle. Thinking $55.00/1000 will be the new normal.

[Idaho45guy]

Still no sign of powder, primer, or bullets out here no matter how high the price.

I fear inflation is going to hit the economy before there are ever components to buy around here. We have plenty of lumber for sale, since I can almost see the lumber mill from my back deck, but those prices have increased 300% the past few months. I know a guy who works in the mill, and he said they got a 3% pay raise the other day. Wow. Not sure where all that increased cost is going, but it's not going to the employees actually producing the product.

[slam45]

CCI, Speer, Federal and Remington (as well as many others) are all brands produced by Vista Outdoors, they also run RCBS... really very little true competition in the industry any more... same goes for powder, only a very few giant companies producing it... bottom line is they will charge as much as the market will bare... with costs of gov regulation added on and passed down to the consumer... they also own Alliant powder too...

[sharps4590]

Remember when you could shoot 22lr all day for 2 to 3 cents a round?.

Welll...I remember the days when you could shoot 22 LR all day for a penny a round. If you wanted to shoot shorts, they were 35 cents a box of 50. A little red wagon or bicycle basket full of soda bottles picked up in the ditch made for a days fun shooting....if we didn't spend it on candy and soda.

I don't know exactly where it's going, I just wish it would get there.

[Randy Bohannon]

You’re right about all metal is going to be expensive, local hardware store, 250’ 12-2 wire was $67-$72.00 now $112.99 .

[Bmi48219]

This was in GunAmerica Digest March 23.

https://gastatic.com/digest/wp-content/uploads/2021/03/tempFileForShare_20210323-094737.jpg

Before the panic Winchester primers were around $33.00 / 1000. Add 25%= $41.45 / 1,000.
CCI Website shows SPP @ $5.99 or $6.99 / 100 depending on which page you look at.

IMO, the prices manufacturers are quoting are the best indicator we have of what we’re likely to be paying when primers become available. I have to believe an outfit like Winchester bases the projected retail price on actual costs plus all anticipated supply chain margins. If between now and when products are available again the manufacturers continue to raise prices, then either:
Raw material cost projections were inaccurate or
Management is looking for higher margins
Both conditions will apply. If manufacturers expect a 10% profit on products and raw material & labor costs increase, the 10% profit will be 10% of the total increased manufacturing cost.

[Three44s]

“Manufacturers aren't making bank. It's everyone after that in the chain that's raising prices.”

Burnt Fingers nailed it!

But it’s us as consumers that are fueling it! Not this duffer (me) however! Not one cartridge nor component bought here during this rush!

Three44s

[1hole]

As I understand it, the profit margins per unit for most large competitive businesses is usually in the 3-5% range; they make big money but they do that by volume sales. With competitors gnawing at their ankles and at that low profit point they can't make any big or long lasting errors or their profit quickly goes to zero or less. Competition is what keeps producers "honest".

Sadly, nothing keeps politicians honest so layerer taxes on production are one of the major factors in the high prices of everything we purchase. Beware politicians telling us they only want to tax the rich so the rest of us can have cheep or even free stuff from a kindly government; they lie. There is no limit to how high taxes and mandates can be so government costs us multipul times times more than the makers profits.

The reason raw lead is so costly today is that hundreds of gov. mandates have forced all U.S. lead miners to close down; check the increased prices of bullets and auto batteries in the last few years to see the results of our government's benevolent "help" and then know the same effect has driven up our cost of living across the board but there is nothing businesses, big or small, can do about it. Thus, America's slide towards socialism and total government control continues. God help us.

Bottom line, nothing is free or even cheap. No matter the tax rates imposed on the "rich", retail customers pay all of the taxes and mandates imposed on mean ol' businesses or the supply lines die. Then many people will die, starting with huge masses of hopeful/helpless big city socialist Democrats, but many little country folk will survive even without government's expert help.

(Don't worry tho. I've read the whole Book and at the end everything works out right ... eventually. :))

[38SuperAuto]

Part of the commodity cost figure is increased demand for industrial metals, part is governmental control and taxes, part is business decisions - some call it greed and some call it free enterprise. IMO, the largest, most consistent component is devaluation of the currency.

1) U.S. inherited the British gold standard in 1791ish --> Gold ~ $20/oz

2) Value of the dollar was officially decoupled from gold in 1971, ending the gold standard.

3) Alot of things happened in 1900s and many reasons were given for ending the gold standard. The effect has been decreased USD purchasing power. Instead of having $1 worth of precious metals behind each USD printed, the value of the USD is based on a number of economic factors and value of competing world currencies.

[Conditor22]

I’m inclined to agree in principle. Thinking $55.00/1000 will be the new normal.

I recently bought primers for $50.50 per 1,000 shipped (including shipping and hazmat)

Products & Fees
Item # Name Price Quantity Total
RM712LA REMINGTON PRIMER 7-1/2 LA SMALL RIFLE BENCH REST 5000/CS $222.99 1 $222.99

Fixed-Rate Shipping $9.95
Hazardous Materials Fee $19.50

Total $252.44

I think primer will even out in the mid to high 30's when this is over.

[phidelt208]

Stuff is coming back SLOWLY, you can get powder easily, primers are still tough and expensive. Brownells & Midway had SPP for $75 plus hazmat.
Pistol bullets can be bought without much issue, some hunting rifle rounds seem to be tough to get but they are out there.