Our Evolution from Ammo Subscription to Ammo Bank Account
We’ve now had inquiries ranging from $5,000 to $50,000 on how someone could move their money from a traditional bank and put it into ammunition. This would have been a crazy idea only a few years ago… so how did we get here?
There are two parts to this story: how we got here as a company and how we got here as a country. Let’s start with the bigger societal picture then drill down to the company and individual user level.
First off, how could this idea take shape in the wild? Why would someone even be looking at alternatives other than dollar denominated assets such as money market funds and bank CD’s to protect their wealth? Those are “risk free” savings vehicles aren’t they?
As we’ve seen in the past week, money in the bank isn’t always “risk free”.
Even though the Fed has (wrongly in my opinion) stepped in to save Silicon Valley Bank beyond normal FDIC insurance limits, the fact that we just had the 2nd largest bank failure in US history has people asking, “Can my bank fail?” and “What would happen to my savings?” Those are very legitimate (and scary) questions to ask.
It has people looking for alternatives well beyond the banking sector to park their money.
That’s because when you look at our financial system critically, you begin to realize that it isn’t just the banks and brokerages that are at risk, it is anything related to the US Dollar. Instead of a “risk free” asset, the currency we are all forced to use every day has risk built right in. It declines whether we want it to or not. Plus, as an “Average Joe American” we don’t have an alternative to the US Dollar like other countries do.
Our “Free Risk” Declining US Dollar
Other countries have started to look for the exits because they see the writing on the US Dollar: China and Russia are looking at a non-dollar reserve currency, Argentina and Brazil are planning a common currency for trade, India and the UAE have started trading in rupees, central banks are purchasing record amounts of gold.
This past week gold, silver, and Bitcoin have all spiked on the banking sector chaos. People are not only looking at alternatives to banks, they are also looking at alternatives to the US Dollar.
I’ve talked about this at length in my past blog posts so won’t go into detail here, but dollar dominance is fading and people are now starting to notice. If it wasn’t the incessant inflation that got you, it was the risk of your bank failing and taking all your cash in the process.
But what do we do about it? We all can’t start suddenly trading in gold and silver coins. Bitcoin is still too volatile for most people to use on a daily basis (or in my opinion even act as a good store of value). Ammunition certainly can’t be used for groceries or any other commercial transaction, for that matter.
The truth is, we’re stuck with our declining US Dollar until something better replaces it, but that doesn’t mean you have to sit still and take the assault on your savings account and watch it wither away into nothing, or get swept up by some underfunded bank collapse.
Ammunition as a Store of Value
This is why people are starting to look at the alternatives for risk diversification and inquire about ammunition as a store of value. Over the past week we’ve had customers ask us about what it would look like to move larger amounts of money into ammunition. One customer asked me recently, “What would $50k worth of ammunition look like?” (that is about a pallet or two depending on the caliber, btw).
I’ll be the first to say that ammunition still has its risk. It isn’t “risk free” either. However, unlike our glorious US Dollar, ammunition is a physical, tangible thing that will never be worth zero.
Also, unlike Bitcoin, ammunition has more stability. I’m not convinced that Bitcoin prices couldn’t one day drop to $0.10 (but my Bitcoiner friends say that will never happen). In my mind, Bitcoin suffers from the same problem that plagues the US Dollar. It has no intrinsic value - it is 0’s and 1’s.
Ammunition is more like gold in my opinion, it is tangible and has worth based on the effort and cost of the raw materials. It will never be worthless. It will never vanish due to a computer glitch or hacker.
In fact, speaking purely about ammunition here, its value in dollars is more likely to increase than decrease in the future. Political spikes, civil unrest like we had in 2020, raw material inflation, and even more demand from new gun owners will push prices higher, not lower.
Ammunition as a store of value has a lot of drawbacks too. The first one is that isn’t very portable. As I mentioned above, $50k in ammo is 1-2 pallets depending on caliber - or roughly two tons. The equivalent amount of physical gold is only 26oz - less than two pounds! (In silver that would be roughly the weight of a small adult or 120lbs.)
Other things to think about with ammunition is that it needs to be stored properly and away from moisture and extreme heat or cold. Physical ammunition is also a pain in the butt to sell quickly and turn into liquid cash when you need it - if you are storing it yourself.
Evolution of an Ammunition Bank
I feel it is for these reasons that our business has evolved into an Ammunition Bank (for lack of a better term) and away from purely an Ammunition Subscription Service. Obviously, we’re not a bank or even in the financial sector, but people are now essentially treating us as though we are.
When we started, we offered a regular reoccurring shipment of ammunition - similar to a subscription box service like Dollar Shave Club but with more flexibility on when you get your shipment. We found that because ammunition is expensive to ship, people don’t like to do it often. They liked to store it up and ship occasionally when they had enough to make it worthwhile.
Of course that helps us out because we don’t need to spend as much on shipping material and warehouse labor so we encouraged it with the availability of Free Shipping.
Back in the day, most customers would ship soon after they hit free shipping ($250 of shippable ammo value), or on some regular schedule such as every 3-4 months. Now, a large percentage of our customers let their ammo balance build up over time.
Right now, as I glance through our numbers, I see nearly a dozen customers with over $5k in stored ammo value and easily another 100 customers with over $2,000.
That is a fairly new phenomenon for us and shows me the shift in customer thinking from an ammunition subscription service toward an ammunition bank account.
This is also why over the past year we’ve focused our development in this direction and added features that make it more convenient for someone that wants to store ammo for the long term. Features that you would only see in financial products such as the ability to buy and sell with “limit” orders, dashboard that shows percentage gains and losses on calibers, the ability to exchange from one caliber (asset) to another. We even added ACH and a wallet feature to make it easier to move money into and out of ammunition. Heck we even removed nearly all of our fees so customers weren’t being “nickel and dimed” every time they made a change.
No, the writing has been on the wall for a while and we have been positioning ourselves to make it easy for you to diversify into ammunition - whatever your budget may be: $5, $500, $5,000 or $50,000. Everyone can benefit from an ammunition backed alternative to crypto and gold.
If you are interested in moving some portion of your USD bank balance into ammunition and are unsure where to start, just reach out to us at (208) 996-0450 or email connect@ammosquared.com to get started!