Have you ever wondered how we arrive at the prices for our ammo? There is no doubt we have a unique service. If we were traditional ecommerce it would be easy - the price is the cost from the manufacturer plus some margin. That is how 99.9% of retailers operate… but not us.
A Basket of Ammo
The reason we do it differently is because we ARE different. We had to develop something custom to price our ammo, we couldn’t use the “cost + margin” approach. Why? When you purchase ammo from us you aren’t buying a single SKU you are buying a “basket” of ammo that is represented by what we call a Generic SKU. A Generic SKU is composed of a platform (handgun, rifle, shotgun), a caliber, and a purpose (Practice, Self Defense, Hunting, Competition). Sometimes there is extra detail in there like special features or game type if it is a hunting round.
Here is a popular example: HG-9MM-PRTC
Currently we have about 22 different brands, bullet weights, and even box sizes that fall under the “Handgun 9mm Practice” Generic SKU in our inventory database. Each of these 22 products has a unique UPC Code that the manufacturer gives it which all retailers use. We call these “Specific SKUs” and use them to determine our price. These Specific SKUs are the products you would recognize on the shelf and receive in your box if you got a shipment from us. Here is our current list:
- 9mm Sellier & Bellot 124 FMJ 50 /ct
- 9mm Winchester USA 147 FMJ 50 /ct
- 9mm Maxxtech Brass 115 FMJ 50/ct
- 9mm GECO 124 FMJ 50/ct
- 9mm Norma Range and Training 124 FMJ 50 /ct
- 9mm Magtech 115gr FMJ 50/ct
- 9mm Fiocchi 115 FMJ 50/ct
- 9mm PMC Bronze 124 FMJ 50/ct
- 9mm Sig Sauer Elite Performance 124 FMJ 50 /ct
- 9mm Armscor 115 FMJ 100 /ct
- 9mm Venom 115/124 FMJ 50/ct
- 9mm Aguila 115 FMJ 300 /ct
- 9mm Fiocchi 124 FMJ 50/ct
- 9mm Remington Range 115 FMJ 250 /ct
- 9mm Sig Sauer M17 124 FMJ 50 /ct
- 9mm American Sniper Range 124 FMJ 50 /ct
- 9mm PMC Bronze 115 FMJ 50/ct
- 9mm Speer Lawman 115 TMJ 50 /ct
- 9mm Winchester Active Duty 115 FMJ 100 /ct
- 9mm Hyperion Munitions Veteran Ammo 124 FMJ 50 /ct
- 9mm Sig Sauer Elite Ball 115 FMJ 50 /ct
- 9mm Speer Blazer Brass 115 FMJ 50/ct
Those 22 individual products make up an ammo basket for purposes of pricing the generic SKU: HG-9MM-PRTC.
Custom Ammo Pricing Tool
We take those 22 UPCs and crawl online ecommerce sites every day to see what “the market” is saying about the price of those Specific SKUs. We have about 80 different sites we cycle through and hit each day. We then take the prices we find, convert them into a price per round, and list out the extreme high, low, and more importantly the MEDIAN (the price right in the middle - not the average). We chart all of this out everyday in our own custom pricing tool.
This pricing tool was previously internal to our employees but now we’re releasing it to the public so anyone can see how our prices are derived. You don’t even need to be logged in as a customer to see our prices anymore. As a fun bonus, you can also see all of the specific SKUs in our “ammo basket” that we use to arrive at our price.
Here is a snippet from the pricing page for 9mm Practice:
This chart goes back to March of this year and what it tells us as of today, October 7, 2022, is the median price for that basket of ammo is $0.42, the high price is $0.78, and the low price is $0.25. Our price is currently just below the median price, which is where we aim to be, at around $0.34 per round.
You can see why we use the median price and not the average, there are few periods on the chart where the high was around $7 per round - obviously an issue with the data or someone, somewhere was selling some silver bullets! The median price takes the price right in the middle of the data, half of the prices above and half below so it throws out those fliers. It is the best indicator for our purposes. Plus it stays consistent and doesn’t bounce around a lot.
On the 9mm Practice Price Chart the median has been pretty consistent from $0.54 per round back in March and steadily declining to around the $0.42 point today. We’ve also kept our price steady during that time from $0.38 per round for most of the year to now $0.34, recently lowering it in response to a declining market price for 9mm FMJ ammo. As the price changes we’ll adjust our price too.
As you hopefully see from the list of Specific SKUs, we send out some pretty good quality ammo! If we do have a “budget” brand we always pair it with a higher quality brand so you receive a good mix of brands and quality levels. The price is representative of this blend.
Ammo Picking Algorithm
Also one thing to know, while we have 22 Specific SKUs in our database for this Generic SKU, we usually only send out 3-4 at most in any given time frame. The rest are either at a zero stock level or purposely marked “inactive” for our picking team so they don’t have to travel to 22 different locations to give someone 1100 rounds! We group our picks in “A”, “B” and “C” quality grades so everyone receives a good mix. You can usually get a sense of what we’re shipping currently by reading our recent reviews. Folks will add pictures of their ammo so you can see the mix.
I know this will come up so I’ll address it here: we don’t allow customers to “pick” favorites for shipping. In fact, no human even chooses the products that go into shipments anymore (which is why we did away with Ammo Preferences over a year ago). Instead we have developed an ammo picking algorithm that looks at a variety of factors including our stock levels, ABC brand quality tiers, and even our margins to arrive at an ideal balanced shipment. Eventually we’ll roll out the ability for customers to customize shipments prior to shipping, but right now that is still in development.
I hope you’ll find our custom pricing tool useful for both understanding AmmoSquared better and also for general pricing situations at your local store: “Is $20 a box a good price for brass 9mm FMJ?” Well… $0.40 per round is just a little below our median for our list of SKUs so it could be a a decent deal - just depends on the brand at that point.
You’ll also see when you start exploring our pricing tool that we aim to be fair and transparent with our pricing and product selection. Plus, honestly, for an ammo geek like myself, it is pretty fun to see price changes and what specific SKUs we offer. Give it a try!