I wanted to write a quick post to give some visibility into the current state of the ammunition market as we’re seeing it. I’ll also answer some questions we’re getting about the current state of affairs and how it relates to our service.
Ammo has started flowing! As I mentioned in my May 13 blog post “Mostly an update on ammo...” we’re seeing more and more activity on popular calibers, but not everything… yet. It will take a while before we’re back to “normal” inventory levels across the board.
Right now the state of the market, as we see it, is that ammo is flowing more freely then it was even just a month ago. We’re starting to see pockets of more readily available ammo as supply returns, though it will take longer for the market to saturate and prices to drop.
At big box stores (the ones with the most buying power) we’re seeing more stocked shelves. They typically still have a buying limit for 2-3 boxes per SKU to make sure those boxes don’t disappear in a flash, and with few exceptions, they tend to have the lowest prices.
Next, you’ll find online dealers where most of the popular rounds are available off and on, but the prices are still high and they go in and out of stock frequently. The longer a caliber can stay in stock, the sooner its price will come down as competition comes into play and comparison shopping comes back into vogue.
Manufacturers have spent the past 12 months cranking out ammo as fast as they are able. Supply is finally catching up with demand, which itself has slacked off as people get what they need and aren’t as frantic. Slowly but surely distributors have extra supply to offer and manufacturers have more stock available to ship.
So, with all that background, what is the state of our business?
We’re finally able to allocate some things out of queue and into inventory that have been MIA for the past 6+ months. It feels great!
Not everything is available yet though. Doing some rough calculations shows me that we currently have 28% of customer ammo still in queue and waiting to be allocated into inventory. Obviously the goal is to have our queue as close to zero as possible (there will always be some just due to the ebb and flow of the business model).
Even though things are getting better (or maybe BECAUSE things are returning to normal), people still have questions about availability and prices. I get it. We’re in a weird market right now and to top it off, AmmoSquared is a very different type of service. So there are lots of questions…
I’ll run through some of those questions here and address them here:
"I see that my “X” caliber has been filled but not my “Y” caliber - why is that?"
The simple answer is just supply imbalances and timing. We are buying everything we can but we’re dependent on what our distributors and manufactures have available. For example, one week we might get in a bunch of 9mm Steel Case and fill that to inventory but at the same time we’ll still have a lot of 9mm Self Defense still in queue because we’re waiting on a shipment to come in (true). Some customers might think that if one version of 9mm is filled all others should be too, but that just isn’t the case. Which brings me to the next question we’re seeing:
“You said you had so much 556/223 available that you were increasing the buy limit or selling extra, but mine is still in queue. What’s going on? (same question for any caliber we recently announced we had a surplus of).”
This gets back to ammo types. Yes we have TONS of 556/223 Practice Grade and we have even put some cases for sale on Gunbroker, but that doesn’t mean we have received enough Hunting or Frangible, for example, to fill everyone off the queue (also true). Manufacturers are focused on the most popular calibers in the most popular form: FMJ “Practice Grade”. This makes sense, since they have the most volume. That doesn’t mean the other stuff isn’t available, it just means LESS of it is available. We can allocate it in smaller batches as it trickles in. As we get more, we’ll allocate more.
Next question is about pricing:
“I see the average price for caliber “X” is much lower than you are selling it for. Why is my price so much higher?”
I recently got this question on 300 Blackout specifically, but the price aggregator the customer was looking at didn’t make a distinction between brass and steel case. So that was one thing I wanted to point out - when looking at prices, make sure you are comparing apples to apples - including shipping and tax. Some places will show a cheap price but rape you on shipping.
The other comment about prices involves the Big Box Stores. In the past we used to be able to beat them every time. But right now, most of them have lower prices - they also have a buy limit. Since we don’t have a restriction on how much you can buy, we price at the current market rate for the ammo type that we’re seeing online.
Now, as supply returns to the market, prices WILL COME DOWN. We are doing our best to stay on top of prices but with over 200 calibers and 450 variations, sometimes we are out of sync with the market. When prices were rising, that was a good thing for our customers because they were able to buy from us cheaper than elsewhere and lock in those prices on queued ammo. In other words, a price adjustment delay was good.
As prices drop, however, a price adjustment delay is a negative for customers. We don’t want to be too out of sync so we’ll adjust prices as rapidly as we can, again to benefit our customer, even it means we’re temporarily taking a loss in some cases.
To sum it all up: The market is getting ammo. We’re getting ammo. Coverage is still very spotty and some calibers or variations are available but not others. Prices are still high but as the supply starts to overcome demand and consumers can comparison shop, prices will come down. It will start with the popular rounds and trickle down. Will prices fall to the levels we saw before all this insanity? Probably not for a while, if at all, because of the overall higher cost of raw materials, energy, and labor (ie: inflation) - but we’ll see.
I’ll finish this post off paraphrasing something I wrote to a customer that wanted to know why after 8 months he only got 26 rounds of 10mm allocated to inventory even though he has 1,000 rounds in queue: "…think of it as the trickle of water that comes out of a hose before it reaches full pressure. We got a little bit in recently but it wasn’t enough to fill everyone 100%. Ammo has now starting to flow so it won’t be long before the rest is filled."