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Lennie

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This is not good news for ammo prices. It impacts jacketed bullets and brass


If you have followed the news, most African copper mines are in a state of political chaos.

The good news, lead prices have had a slight decline. I seen lower pricing for cast bullets in the last four weeks.
 

CLT65

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Base metal price affects cost less than you would actually think.

Take for example a box of 115gr FMJ 9mm ammo. Each case consists of a 70% copper cartridge case weighing about 60gr, and a 90 or 95% copper bullet jacket weighing about 20gr. The actual copper content of the entire cartridge is around 61 grains. The copper content of the 50 round box is about 7 ounces.
At the current market value of copper, that's $2.06 worth in the whole box.
At the current market value of lead ($1.00/lb), that same box has 62 cents worth of lead in it.

If both lead and copper were to double in cost (extremely unlikely), that would add just $3 to the raw metal cost of production.
 

Knobgoblin

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07302013_Stealing_Copper_article.jpg IQqvUNZtSCaxUQdG0d0-HQ.jpeg.jpg
 

Lennie

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Base metal price affects cost less than you would actually think.

Take for example a box of 115gr FMJ 9mm ammo. Each case consists of a 70% copper cartridge case weighing about 60gr, and a 90 or 95% copper bullet jacket weighing about 20gr. The actual copper content of the entire cartridge is around 61 grains. The copper content of the 50 round box is about 7 ounces.
At the current market value of copper, that's $2.06 worth in the whole box.
At the current market value of lead ($1.00/lb), that same box has 62 cents worth of lead in it.

If both lead and copper were to double in cost (extremely unlikely), that would add just $3 to the raw metal cost of production.
Great math, however the raw cost of materials changes retail prices far more than the increase in material cost. Manufacturers, distributors and retailers mark up margins are added to cost increases to each level of the distribution change.
As a general rule, every one dollar of increased input cost to the ammo manufacturer adds close to 3.25 to the retail price. A 1.00 increase in materials would add increase the price to the distributor by $1.85 . (Three factors are in play, manufacturing division margin, marketing margin and federal tax on ammo) This 1.85 increase in cost to the distributor would increase the cost to the retailer by 2.45. The increase to the consumer at the end of the distribution chain would be over 3.25.
 

Certaindeaf

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I find that the price of tea in China is exceedingly important.

"The USA is the second largest producer of copper in the world. The largest copper mine is found in Utah (Bingham Canyon). Other major mines are found in Arizona, Michigan, New Mexico and Montana. In South America, Chile, the world's largest producer, and Peru are both major producers of copper."

Lol chile and africa
 

Lennie

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I find that the price of tea in China is exceedingly important.

"The USA is the second largest producer of copper in the world. The largest copper mine is found in Utah (Bingham Canyon). Other major mines are found in Arizona, Michigan, New Mexico and Montana. In South America, Chile, the world's largest producer, and Peru are both major producers of copper."

Lol chile and africa
Is this why copper prices are at record levels?
 

CLT65

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Great math, however the raw cost of materials changes retail prices far more than the increase in material cost. Manufacturers, distributors and retailers mark up margins are added to cost increases to each level of the distribution change.
As a general rule, every one dollar of increased input cost to the ammo manufacturer adds close to 3.25 to the retail price. A 1.00 increase in materials would add increase the price to the distributor by $1.85 . (Three factors are in play, manufacturing division margin, marketing margin and federal tax on ammo) This 1.85 increase in cost to the distributor would increase the cost to the retailer by 2.45. The increase to the consumer at the end of the distribution chain would be over 3.25.
I'm not saying you're wrong, and no offense intended, but that seems extreme to me. Maybe you've done accounting for large ammunition manufacturers and you're absolutely right, but it is hard for me to fathom a $1 increase in cost of materials becoming a $3 increase at the retail level, for this kind of material and product. Again, no offense, it's just that your numbers surprise me if they're correct.

Even at that though, a box of 9mm still contains less than half a pound of copper. If copper increases by $1 per pound, a 3.25x increase at retail would still be only $1.43 per box increase. Compared to the crazy panic increases we've seen, that's nothing.
 

Knobgoblin

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I'm not saying you're wrong, and no offense intended, but that seems extreme to me. Maybe you've done accounting for large ammunition manufacturers and you're absolutely right, but it is hard for me to fathom a $1 increase in cost of materials becoming a $3 increase at the retail level, for this kind of material and product. Again, no offense, it's just that your numbers surprise me if they're correct.

Even at that though, a box of 9mm still contains less than half a pound of copper. If copper increases by $1 per pound, a 3.25x increase at retail would still be only $1.43 per box increase. Compared to the crazy panic increases we've seen, that's nothing.
The money is made in the middle.

Retail stores mark up covers overhead and allows for some profit. Overall profit dollars are limited to sales volume. So, even higher %markup doesn't mean profit dollars realized.

Wholesale suppliers see big $$$ due to volume, and constant demand =volume.
 

CLT65

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The money is made in the middle.

Retail stores mark up covers overhead and allows for some profit. Overall profit dollars are limited to sales volume. So, even higher %markup doesn't mean profit dollars realized.

Wholesale suppliers see big $$$ due to volume, and constant demand =volume.
I would expect that a LOT of money is being made in the middle right now. Production costs haven't increased that much, and retail prices have increased dramatically. Even BiMart prices are nearly double what they were. Maybe not double, but they've sure increased, and I expect that's mostly due to their distributor cost. A lot of people are making a LOT of profit on ammo right now.

I get what you're saying about higher markup not equating to higher profit. I feel bad for the small gun shop who can't get the volume of ammo to sell that they did before. If they raise their prices to make twice the profit per box, but only sell one fourth the volume, they're the ones hurting.
 

Knobgoblin

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I would expect that a LOT of money is being made in the middle right now. Production costs haven't increased that much, and retail prices have increased dramatically. Even BiMart prices are nearly double what they were. Maybe not double, but they've sure increased, and I expect that's mostly due to their distributor cost. A lot of people are making a LOT of profit on ammo right now.
Not sure if this is regional, national, or global. Warehouse and transportation is in the middle of a massive labor crisis. Approximately one year of hiring shortfalls. Plenty of no chronic no shows , walk offs . Some walk outs.

Coming good weather will exacerbate this problem.
It definitely did last year.
 

CLT65

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Not sure if this is regional, national, or global. Warehouse and transportation is in the middle of a massive labor crisis. Approximately one year of hiring shortfalls. Plenty of no chronic no shows , walk offs . Some walk outs.
I know I'm going a bit off-topic, but it's amazing how many jobs are available out there right now, amidst high unemployment. I'm in the market for a new job, considering a big move, and I'm surprised at the demand for skilled and experienced people (or even unskilled and inexperienced).
 

Knobgoblin

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I know I'm going a bit off-topic, but it's amazing how many jobs are available out there right now, amidst high unemployment. I'm in the market for a new job, considering a big move, and I'm surprised at the demand for skilled and experienced people (or even unskilled and inexperienced).
The demand for entry level, low skill workers is through the roof.

Welfare and unemployment are so sweet right now (for the unambitious),
that these jobs are not being sought after.

Socialist utopia
 

Lennie

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I'm not saying you're wrong, and no offense intended, but that seems extreme to me. Maybe you've done accounting for large ammunition manufacturers and you're absolutely right, but it is hard for me to fathom a $1 increase in cost of materials becoming a $3 increase at the retail level, for this kind of material and product. Again, no offense, it's just that your numbers surprise me if they're correct.

Even at that though, a box of 9mm still contains less than half a pound of copper. If copper increases by $1 per pound, a 3.25x increase at retail would still be only $1.43 per box increase. Compared to the crazy panic increases we've seen, that's nothing.
Quick math using common gross profit margins on the 1.00 increase in cost.
1.00 increase in material at manufacturing side with 20% margin equals 1.25 cost to marketing department
Marketing, with a cost of 1.25, and 20% GP margin equals 1.56
Add federal excise tax 11% gets a cost of 1.72 to distributor
Distributor takes a 25% margin which results in wholesale price of 2.29
Retailer pays distributor 2.29 and takes a 30% margin, the retail price is 3.27

For those not experienced in margins
A 20% margin has a multiplier of 1.25
A 25% margin has a multiplier of 1.33
A 30% margin has a multiplier of 1.43

In my consulting, I used to tell folks to throw away their mark up wheels or similar tools. The easiest way to do markups is to decide the percentage of mark up that you would like for a margin. Then subtract the percent from 1 and apply the number derived as a devisor to your cost.
 
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I rather use polymer coated bullets than jacketed now days. Leaves the bore so much cleaner.

BUT Federal Syntech is so damn hard to find. Also I never understood why it is more expensive, polymer coated bullets should be much cheaper to make.
 
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I rather use polymer coated bullets than jacketed now days. Leaves the bore so much cleaner.

BUT Federal Syntech is so damn hard to find. Also I never understood why it is more expensive, polymer coated bullets should be much cheaper to make.
Maybe lack of demand? I remember as ammo was starting to get tight I went online and the place I went to only had 9mm syntech in stock, so I bought 1000. I don't regret it. It seems to run fine and obviously no copper fouling.
 
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