An Open Letter to 22LR Buyers and Seekers

[crudos]

Well said. Was able to find a couple of hundred rounds a few months ago, at the time, for a fair price. But nothing since.

Hello, This letter is for you Mr. and Mrs. American looking to buy .22LR ammunition. Finally, it’s also for you Mrs ammo reseller who makes daily trips to all of your area Wal Marts and sporting goods stores looking for 22LR at retail price. You get home and put it immediately for sale on Gunbroker, Armslist or at your local gun show at a 200-300% markup.

As I’m sure most people reading this already know, 22LR ammunition is harder to find at retail price than virgin unicorn blood right now. The popular marksmanship program, Appleseed, even has a revised course of fire now that requires fewer rounds of ammo due to the “22 shortage”.

If you think the ammo companies are making less rimfire ammo right now, you’re mistaken. A quick search of AmmoSeek.com shows dozens of websites with thousands, or even tens of thousands, of rounds in stock. LuckyGunner.com shows the same thing. All of those sites are getting and selling new stock daily.

However, instead of being less than $0.05 per round like it should be, the cheapest available is $0.13 per round + shipping, with many sites getting closer to $0.20/round.

I understand that supply and demand drive our nation’s market prices, and I wouldn’t have it any other way. However, what we are seeing with 22LR is artificial demand being created by a handful of ammo sellers looking to make a quick buck by capitalizing on gun owners’ fears. Fears that these sellers are helping to create.

The “demand” is created when these sellers buy all of the 22LR at retail price from chain stores. These chain stores are the largest retailers of 22LR in the country. This creates the illusion that the ammo is scarce. When people think something is scarce, they feel they need to buy it even more so than normal. This is where the so called “demand” is coming from. Now, I do understand that there is a real demand increase due to market conditions that include tons of new gun owners in the last year as well as fear of future availability of ammo. However, we’ve already seen the centerfire ammo market more or less rebound in most areas of the country from the 2013 ammo panic, but the rimfire market seems to be getting worse. Why is this?

It’s pretty simple actually. It’s very economical for someone to walk into a department store and buy those three 550 round boxes of 22LR. It costs them less than $75 out of pocket. If they bring a friend or spouse along, they can probably clean out an ammo department’s daily shipment, even despite purchase limits. It’s much harder for your average joe off the street to do this with centerfire ammo. The retail cost is too high to purchase large amounts on a daily basis for most people. However, due to the low retail cost of rimfire, they can buy it all.

Then Johnny America comes along on Sunday morning with his two kids in tow to get some ammo for a range trip. “Huh, no 22. Must be some sort of shortage. I guess I better order some online. I know its expensive, but if this shortage continues I may not be able to purchase it for a while.”

This behavior also forces legitimate, smaller gun shops and online retailers to jack their prices up. If they didn’t, the resellers would simply clean them out and make a profit off of their good nature.

A group of people who have never met each other, who probably know nothing of the microeconomics principles at play, have created an unintended monopoly on 22LR, inflating the price of a commonly available commodity by controlling its availability to the general public on a national scale.

I hope others join me in pledging to purchase no more 22LR ammo at “panic prices”. Retail priced ammo is out there if you look. I also hope resellers looking to make a few bucks will reconsider their purchases.

http://gunssavelives.net/blog/an-open-letter-to-22lr-buyers-and-seekers/

[CrystalHunter1989]

A-freaking-men

[special-k]

This situation reminds me of what Ticketmaster did for live entertainment ticket prices.  Do you remember when ticket prices & .22lr were reasonably priced?  Then some middle-men arbitrarily interjected themselves into the market so they could get their cut... then the rest is history.

[Grudgie]

You guys are pointing the finger at the wrong person. I'd like to remind everyone that there is nothing wrong or 'evil' about making a profit. It's what drives the free market. But what allows these middlemen to have a monopoly on .22 ammo is the retail stores ignoring the laws of supply and demand and keeping prices low.

I guarantee if Walmart raised the price on .22 this shortage would end pretty damn fast. Then the prices would lower according to what the free market demands.

[crudos]

There's a difference between driving the free market and exploiting the free market, to me at least.

[Well-Prepared Witch]

Gotta love how everyone loves the "free market" when it serves them, but when it doesn't they want people to "play nice".  This is the "free market" in a nutshell.  It's a breeding ground for corruption, for people to take advantage of other people, and inequality is built into the system.  Not saying that other systems aren't just as flawed, but this whole the "free market" is sanctified and holy perfection bugs me.

[Well-Prepared Witch]

Also, Grudgie, if Walmart and other retailers arbitrarily raised their prices just to affect the resale market, they'd be accused (rightly) of price gouging.  They're not responsible for what people do with their products after sale. (With some caveats like knowingly selling defective/damaged products, etc.)

[JohnyMac]

Guys and gals, I agree with Wellie - It is the free market.

Now on the other hand if folks didn't buy the inflated priced ammo it would come down. Locally there is a mom & pop gun store that bought a "shit-ton" (Financial term) of .223, 7.62x39, 9mm, .40 S&W, .45 ACP, etc. Right after the Sandy Hook massacre and our Presidents reelection. They had plenty off ammo but at a very high price - 3 to 4 times MSRP. I have a friend who is on this forum who claims they had a shipping container full of it behind the store.

Although the mom & pop's prices are still high by internet standards they now fall into the 1-2 times MSRP. 

The only way to bring down the price is to lower the demand. Do not buy the ammo at inflated prices. Pure and simple.   

[Kentactic]

I haven't bought .22lr in almost 2 years.

[Grudgie]

Gotta love how everyone loves the "free market" when it serves them, but when it doesn't they want people to "play nice".

I agree 100%. It needs to be said. I struggle with the irony that so many 'Libertarians' hate the free market. But I disagree that the free market is a breeding ground for corruption. It depends on what your definition of corruption is. If by corruption you mean that people are inherently greedy and like making profit, then yes. The free market is corrupt. But if we weren't inherently greedy the economy would be stagnant and technological growth would be slow. Like it or not, Walmart's priority number 1 is not to make sure you have cheap ammo. Nor is it your priority number 1 to benefit Walmart financially. And no ammount of government regulation can change the fact that we are greedy individuals.

I also disagree that the free market is somehow the cause of the shortage. When fundamental economic laws are not being followed (in this case raising the price according to supply and demand) I don't think you can attribute the free market engine as the cause.

so, Grudgie, if Walmart and other retailers arbitrarily raised their prices just to affect the resale market, they'd be accused (rightly) of price gouging.

They would be accused of price gouging, but not rightly. Of course there are many charitys who do this for free and that is awsome. Even if their intent is to gain PR points. This is the meat of the issue. If ammo makers actually sold their ammo for what it is worth they could increase production. The free market is at the same time the most simple, and the most misunderstood economic device.

“The trouble about man is twofold. He cannot learn truths which are too complicated; he forgets truths which are too simple.”
― Rebecca West

Maby one day when UNICEF gets into the ammo buisness we can all join hands and sing. But until then, supply and demand determines price in the real world. Either that or government mandated price ceilings.

Guys and gals, I agree with Wellie - It is the free market.

Am I hearing this right? Mr. freedom loving patriot Johnny Mac here is blaming the free market for the .22 shortage? Trying to control the free market with threats and boycotts will only harm everyone in the end.

[special-k]

...Trying to control the free market with threats and boycotts will only harm everyone in the end.

Boycotts are a valid check & balance tool in a free market... deal with it.

[Kentactic]

...Trying to control the free market with threats and boycotts will only harm everyone in the end.

Boycotts are a valid check & balance tool in a free market... deal with it.

True story

Dont like it? Dont shop there. REALLY dont like it? Tell everyone you know.

[Grudgie]

...Trying to control the free market with threats and boycotts will only harm everyone in the end.

Boycotts are a valid check & balance tool in a free market... deal with it.

So you like boycotting the free market for being a free market.. Cool story bro. Cry a little more when you don't get your way. Or better yet, go join one of those parasitical unions you pretend to despise.

True story

Dont like it? Dont shop there. REALLY dont like it? Tell everyone you know.

Absolutely. Mob rule is great isn't it? I just don't think raising prices on a popular product is a valid reason to boycott a buisness, and so I will tell everyone my opinion. And if you don't like it, as Special-K says.. deal with it.

[Kentactic]

Absolutely. Mob rule is great isn't it? I just don't think raising prices on a popular product is a valid reason to boycott a buisness, and so I will tell everyone my opinion. And if you don't like it, as Special-K says.. deal with it.

How is it mob rule to tell your friends a certain company is a ripoff? Mob rule would imply you are forcing someone to do something as I understand it. Simply not doing business with someone in mass isnt really mob rule. To Rule would be to force another to submit. Maybe im wrong but thats my idea of ruling.

In a sense you are complaining about capitalism because you are trying to stipulate when and how other consumers can spend money and use their voice. That is capitalism... you can think all you want. It is up to me to spend my money as I see fit.

[DMCakhunter]

Switch to the 17 HMR and you can find all the ammo you need at the same price it has been for the past 4 years.
It is more expensive than what .22 LR ammo was but it has its own benefits over a .22 LR.

[Burt Gummer]

Ok lets all take a step back and look at these poorly defined terms that we are all arguing a different point about...
"The Free Market" doesn't exist outside of me shopping estate sales or buying some oranges at the side of the road from a guy that doesn't speak English. The rest is all semi free, tax, regulation, credit, FDA, USDA etc... So "the free market" just signifies a political ideal that I personally aspire to.

We have "the Market" to deal with
This whole ammo shortage is caused by the government arbitrarily buying out all the existing stock and outstripping supply.

  p0 & q0 is the pre gov ammo buy out
  p1 & q1 is the post gov ammo buy out
Corner of the graph is 0 value out from that is increase.

Because there is less quantity the demand goes up and so does the price. At this higher price ammunition companies are incentivized to come up with more and new types of ammunition. This also has created tons of upstarts (we've all seen them) providing even more competition to the old established producers this will eventually bring prices down again, until the market has reached it's new equilibrium.

This might seem like splitting hairs to you and a lot of crap you don't care about, but the fact that you are on this forum with the intention of prepping you are really shooting yourself in the foot by not grasping fundamental economics. Prepping is economic activity at it's oldest and most basic form.

Consider this a very basic prep.
http://mises.org/books/lessons_for_the_young_economist_murphy.pdf

If any forum regular is still interested I will personally pay for you take these lessons! 
http://www.libertyclassroom.com/learn-austrian-economics/

Edit: Muh grammar...

[JohnyMac]

Great links Burt! Thanks for taking the time to post them. 

On another note I would like to address the question that Grudgie posted.

Grudgie wrote:
Am I hearing this right? Mr. freedom loving patriot Johnny Mac here is blaming the free market for the .22 shortage? Trying to control the free market with threats and boycotts will only harm everyone in the end.

I will not buy something that I feel is not of value or has an over inflated price. I do this in hopes that the price comes down to what I feel is a good value for the item (s) I wish to buy.

If less and less people do as I do then the merchant is stuck with a slow mover and will in all likely hood reduce the price till it starts to move again. If the merchant doesn't do this they will have moneys locked up in an item that will prevent them from replenishing their inventory of other merchandise. The merchant will also loose bottom-line profits if they used borrowed money to originally buy the items, as they are paying interest on the loan.

America was in part founded on boycotts. Some of the more famous boycotts were:

> The Stamp Act
> The Tea Act
> The Townshend Act
> The Montgomery Bus Boycott, and my favorite
> The boycott of the ACA (Affordable Care Act).

Millions (Not thousands) of young people are boycotting the ACA because they feel it is not fair to tax the young in order to supplement healthcare for people my age and older - I agree with them. As I have written ad nauseam on this forum, I too am boycotting this new tax.

But I am now off subject and I apologize folks.

IMO Grudgie, to boycott something is as American as apple pie. I am not threatening anybody just using my right to boycott and expressing my opinion, by yet another American right guaranteed by the Bill of Rights - The First Amendment. 

[Grudgie]

Absolutely Johnny Mac. In a way, the free market is kind of like thousands of individual boycotts. If you feel the price is to high, don't pay it and you will decrease demand until it comes to a price you are willing to pay. I'm not asking anyone to buy .22 at inflated prices, I just feel stores should raise the price to the correct equilibrium so that the 'middle men' reselling it can't make a profit on it.

I also feel that bullying corporations into keeping goods artificially low priced is a kind of union-like tactic and it doesn't help anyone in the long run.

A political boycott like the colonists did is another story. That's bad ass.

[JohnyMac]

All good points Grudgie 

[Grudgie]

Thank you for restoring my faith in Libertarianism Burt Gummer.

[special-k]

Here's another fine example of a boycott in action at a local level:
http://www.westernjournalism.com/gun-store-owner-pays-price-betraying-pro-gun-public/


For Grudgie's eyes only:

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[Kentactic]

FUCK smart guns... full blown anti-2A funded bullshit.

[sledge]

Guaranteed to work 90% of the time??

I'm thinking of the misfire training drill that I'd have to teach my students.

Lets see:

1) Keep pistol pointed at aggressor.
2) Slam home the magazine.
3) Rack slide twice.
4) Trade pistol to support hand.
5) Rap watch against something hard.
6) Trade pistol back to dominate hand.
7) Pull trigger and hope for best.

 

[Kentactic]

Guaranteed to work 90% of the time??

I'm thinking of the misfire training drill that I'd have to teach my students.

Lets see:

1) Keep pistol pointed at aggressor.
2) Slam home the magazine.
3) Rack slide twice.
4) Trade pistol to support hand.
5) Rap watch against something hard.
6) Trade pistol back to dominate hand.
7) Pull trigger and hope for best.

 

Tap, Rack, Rap, Bang? LOL

[1000meterstare]

Thank God I had a bunch of .22 already bought before this crap.