Has the bullet-bubble passed its zenith? Based on our highly subjective survey of local stores, the Posse thinks so.
Over the last week, I’ve noticed ammunition returning to local store shelves. It is an uneven process to be sure – some merchants have more than others – but the trend is there.
Those stores with the lightest inventory are also those who have raised their prices the least. Again, this makes perfect sense. Walmart hasn’t hiked its prices, so people will continue to buy up all they have. Other stores that have increased their prices are able to keep more ammunition in stock because the price is simply higher than most people are willing to pay. The fact that the ammo is there to be bought also is eliminating some of the panicked hoarding.
I also noticed that the quota signs are disappearing. A month ago, customers were limited to a box maybe two per day. Now you can buy all you want – if you’re willing to pay through the nose.
This provides yet another lesson in basic economics: demand for a product outstrips supply, two things can happen.
If the price is increased, the quantity demanded will fall, which brings supplies back into balance.
If the price is not increased, the result will be a shortage, which some stores have sought to remedy by using a rationing system. If it wasn’t so inconvenient, I would enjoy this neat little episode in microeconomics.
I’ve read on other sites that the backorders are still quite vast and that it may be a while for prices to reach their pre-election levels. To a certain extent, this is true.
On the other hand, the pessimists stating that current prices are “the way it will be from now on,” are utterly wrong. Barring some new political or macro-economic development (federal ammunition taxes rising, gun control being pushed by Congress or a surge in commodity prices, for example), I expect ammo prices will slowly settle back down to where they were.
It was a bubble, and bubbles burst. They did it with tech stocks, housing and now bullets. To put it another way, a 200 to 300 percent price increase in something as easy to manufacture as ammunition is simply not sustainable over the long haul – especially when the actual inputs in production are getting cheaper. Metals are a lot lower than they were this time last year, and with unemployment rising, labor costs are also flat or falling.
To put it another way, ammunition manufacturers and retailers can make plenty of money at last year’s prices.
Eventually the hoarders will have as much as the think they need while the more casual shooters will hold off on purchases.
Meanwhile, the shelves will slowly refill. As they do, the sense of panic will fade and buyers will become even more sensitive to price – after all, what’s the hurry? Maybe they’ll buy a box or two instead of a case, which means that inventories will continue to build.
As the ammo begins to pile up, store owners will come to the conclusion that it’s better to sell product than have it lying around with large price tags.
I don’t have a time frame on this, but anecdotal evidence suggests the process is already in its first stages.