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Want normal pricing again?

Discussion in 'Business Discussion & Reviews' started by JTB0311, Jan 13, 2013.

  1. JTB0311

    JTB0311 Vancouver New Member

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    THEN STOP BUYING EVERY ROUND OF AMMO OR MAGAZINE IN THE STORE FOR YOURSELF!

    If you are one of those people who I have caught sweeping a whole shelf of ammo into your cart -- Shame on you!
    If you are one of those dealers who allow that kind of nonsense -- Shame on you!
    If you are one of those people who was so panicked on the 19th that you went over my counter to sweep all of the AR/Glock/Sig mags off of the wall -- Not just shame on you... you need to learn how to act like a human.

    Ammo is no longer plentiful. As a result, I have to buy it in smaller quantities and at much higher prices. I am well aware that just three weeks ago a box of 5.56 ammo retailed for $7-$10. However, since buyers have wiped out the existing supply and some retailers have allowed that to happen, I have to spend more time looking for it and have to pay more money for it. I am paying more than what I sold it for retail just 3 weeks ago. I will not be selling it for what it sold for just three weeks ago. While I am trying to keep my prices rational, I will not lose a moment of sleep because you "used to be able to get it for (insert pre-12/18/12 price)" .

    It's sad really. I have taken the precaution of limiting sales of things like magazines and ammo for individual customers. But somehow I am the bad guy because I'm trying to allow ALL of my customers to get a reasonable supply of ammunition, and not just "you" (you know who you are Mr. Larch Mountain Bumpfire Commando).

    And while I'm on a tear, stop beating up salespeople. I swear to God, the CEO of (gun maker) does not keep me personally up to date with his companies production schedule. I don't know when they will make more of whatever you were after, I just work here. I don't know what Congress is going to do either. I don't get phone calls from the Speaker or Senate President. Forgive me at being angry at this, but put yourself in my position. Try being asked the same question 100 times in a row by 100 different people in a row and see if you're as enthusiastic about answering. And last but not least, if you get testy with me because you don't like the fact that I can't answer your question to your satisfaction, you are making a fool of yourself and should simply move on. I don't make the guns. I don't make the law.

    If you want someone to be angry at, it's the guy who bought every round of 5.56mm in the store. It's the store owner who ALLOWED 1-2 people to clean them out of ammo and mags in a day or two. It's the guy who walks up to the counter and points at the ammo and says "all of it", then gets bent out of shape because I won't sell it all to him, nor will I sell it at a price lower than my replacement cost.

    Next time you hear someone bragging because they picked up 10,000 rounds of ammo when all of this panic first started, tell that person to go play in traffic.
     
    Dan1477, gehrheart, Russ1590 and 15 others like this.
  2. Murphy

    Murphy Oregon Member

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    What's the name of your store?
     
  3. deadeye

    deadeye Albany,OR. Moderator Staff Member

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    Not seeing a point to this rant.
    The store made its money on the stock they had at the price it was advertised for.
    The store, instead of dragging out for days, selling the same stock in a matter of hours equates to less overhead for the owner.
    Maybe the store should have forecasted their sales better and had a much larger inventory in anticipation of higher volume sales.
    Is this rant due to the fact that the store you stated you worked at in your new member intro possibly may have to lay off some workers because of not having sufficient inventory.
    I for one was not in on the buying spree's as I had foresight to stock up or should I say top off my supply long before. That is what is known as forecasting future needs and securing inventory to get by on during shortages.
     
    Nwcid and (deleted member) like this.
  4. Nwcid

    Nwcid Yakima and N of Spokane Well-Known Member

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    Yes shame on the store for selling its stock. Who would ever think that is the point of a business.

    In one store I worked in we would order a dozen or so generators in the fall. We might sell one or two. Then a storm would come and knock out power and we would sell every single one in a day. Those's were good days.
     
  5. JTB0311

    JTB0311 Vancouver New Member

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    The point is simple: If you want to see ammo coming back into inventory, stop buying everything on the shelf. I know that sounds counter-intuitive, but it adds rationality back to the market. If you buy 100% of the ammo which manufacturers had produced for the quarter/year, then prices will increase on whatever marginal supply remains. Guess what the new equilibrium price of the incoming "new production" ammo is going to be? If you don't care that you are screwing over your fellow gun owners, or are a retailer whose only concern is to help one or two regulars, then keep up the good work in making it impossible to get ammo.

    Also: A small percentage of you all need a lesson in civility, and realize that the salespeople don't know what's next any more than you do. I then cited at least two examples which have made me want to lock the door and go home.

    You actually "forecasted" a run of panic buying sufficient to wipe out the entire countries wholesale and retail inventories? I should hire you, seriously. I have been in this business on both the production and retail side for almost 10 years. I have been a firearms junkie for nearly 40 years. I have worked in store and district level retail management in a variety of other product industries as well over the last 20 years. I have never seen anything like the level of demand that came about just before Christmas. I forecasted the election and had inventory. I had 6 years of sales data for the location broken into monthly/weekly/daily segments. There is NO predictor for what happened. That is why statisticians have the term "outliers". By your rationale, every ammo producer and distributor failed to predict demand. I think you are being unrealistic.

    The level of backstock ammunition I would have needed to meet current demand is roughly what I would have sold in the last 18 months. I'm not sure what kind of capital you're working with, but mine dictates that I use the last months sales to pay for the current months inventory.

    Incompatible product: durable good with marginal effect of revenue vs. consumable which constitutes as much as 60% of revenue based on seasonal buying.
     
    Russ1590 and (deleted member) like this.
  6. Intention

    Intention Hillsboro,oregon Active Member

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    Well here is another forcast. In the near future you will not face the problems you currently have, the federal goverment will be dictating supply and pricing. I hope it ain't so but thats my forcast.
     
  7. deadeye

    deadeye Albany,OR. Moderator Staff Member

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    To be completely honest I most likely have more ammo on hand then the shop you work for did before the panic. Obviously the forecast the shop owner had wasnt conducive to demand. I would not use last 18 months as an indicator but rather volume needed using records from years 1999 (2000 scare), 2007 (possible Obama win), and now 2012. Have to take into account world events when forecasting and allow for effects outside the box such as fuel costs/shipping prices and other retailers needs along with limited producers of the product needed. That is what an accurate forecaster does especially when selling ahead of time such as a company that takes orders for products yet to be made.
     
    Uberdillo and (deleted member) like this.
  8. civilian75

    civilian75 Hillsboro, OR Well-Known Member

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    Just let the man rant. Listen to his words. He is giving us the view from behind the counter. I think it is fair we also know how the 2013 scare can and is hurting businesses, not just us buyers. Is he emotional about it? Well, heck, isn't everyone emotional about the hole thing right now? Are we ammo consumers the only ones who can "female dog" and moan about empty shelves? Cut him some slack. He said his piece, it is out of his chest.
     
  9. JackThompson

    JackThompson Valley of the Demons Well-Known Member

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    I understand what you're saying JTB, and I bet it's been a horribly frustrating Month for you.

    Deadeye, I don't know if you have been a small business owner, but there are some stresses and realities to be faced by JTB that I don't think you are taking into consideration.

    As a small business owner you have your overhead cost (Rent, Advertising, Wages, Taxes, Insurance etc.) and your profit margin. In most cases it's around 15% (In order to match that "$7-$10 box of .223" that every other store in town has.

    If you don't have a magic pipeline between you and the manufacturers you are limited to the same 1-2 Colt AR's per month that the other stores are, and ammo is pretty close to the same, so you don't have limitless cash on hand each month, and even if you did, you might be able to squeeze out 50% more ammo than any other month if you predict panic buying. There's only so much that each store can afford and order.

    ***EDIT*** OOPS! Almost forgot another huge point.
    The second frustrating reality is this.

    For the sake of simple math I'll use fake numbers, but it will hopefully drive the point home.

    Imagine the wholesale cost of a box of 20 PMC .223 plinking ammo is $5

    As a store owner you budget $5,000 a month for .223 ammo, giving you an inventory of 1,000 boxes per month.

    You sense some panic buying and decide to put your entire "Profit Margin" that month into .223 ammo.

    This gives you an extra $5,000. (For a total of $10,000 invested)

    So for December you have 2,000 boxes of .223 ammo.

    Panicked customers empty your shelves in 1 week at $7.00 per box.

    2,000 boxes of ammo at $7 per box equals $16,000

    You call your supplier and ask to order another 2,000 boxes.

    He says I can only do 1000 more boxes and it will be $15 per box now.

    1000 x $15 = $15,000

    So cost was $10,000
    Income was $16,000
    Replacement cost for HALF of the product is $15,000

    You just lost your ***.

    Oh, and now you are gambling that you can actually market this replacement ammo at $18/box and not have people on the forums make hate posts that you are "Gouging your community" and decide to form a boycott against your store, or the equally bad luck that the panic ends in a month and Cabellas/Cheaperthandirt/Wholesale Sports/Bi-Mart don't start carrying it for $9-$12 a box now so you can't even SELL this stuff for what you paid for it.

    It's a stress I wouldn't want to be under, so you play it safe and order less ammo to cut the losses down, and run a store with 75% bare shelves because you are afraid to stock anything during this crazy time.

    *** END EDIT ***

    Don't get me wrong, I value your opinion Deadeye, you've been a great source of wisdom for me, I'm just offering another view.

    On the flip side, I'm really encouraged to see the outright public panic and would like to offer another viewpoint.

    The government ordered up so much hollow point ammunition that manufacturers had to stop filling civilian and retail sales so they could fill the orders.

    I saw that as a "Ramping up for something big" panic buying move by Uncle Sam.

    They bought Billions of rounds that aren't the usual "Qualifying on the range" ammo.

    So when a threat of gun bans and anti-gun legislation was whispered on the wind, the people of the US sent a message of "Ramping up for something big" by panic buying.

    I believe that message is/was/might be partially responsible for pushing back against this potential legislation.

    If it did, then the investment was one of the best investments our great nation has ever done.
     
  10. deadeye

    deadeye Albany,OR. Moderator Staff Member

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    I dont have an issue with letting him rant but to rant because of poor management decisions just seems lame. I come from a much bigger bussness perspective that got to be bigger based on good management. If you want to be a small mom and pop shop thats fine but dont get into a tizzy when the bigger guys step over you. It is the basic risk factor (large inventory) VS end result (sales) that a small business is started on and tends to grow with. If you dont take a risk buying large quantities of inventory (that will eventually sale) then you wont have it when demand is high to get you through the lean times of shortages. I'll leave it at that.
     
  11. Dan-Dee Sales Inc

    Dan-Dee Sales Inc Sweet Home, Oregon, United States Active Member

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    It is not as easy as you try to make it. We order the bulk of our ammo in Feb and August. We base our orders for what we may sell during that time frame. After you put 30k-40k on the books for ammo you do not continue to look for ammo. Then something like this comes along and no ammo. We have orders of 5.56 from last Feb and at least 30k of ammo from August. Not a single manufacture will tell us if that ammo is still on back order, cancelled or on route to us. Our distributors do not have a single box of 9mm, 380, 45acp in stock. They do not have a single hi-cap mag from any manufacture. I can go on to rifles and handguns. Not a single Glock in stock. This is from 7 different warehouses. We just returned from our Spring show and stood in line what seemed for hours placing orders for items that we have no idea if we will ever see. Placing another 20k-30k for items on top of the bubblegum we ordered from last August. It seems to be so easy to assume that the dumb business must be at fault.
     
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  12. JGRuby

    JGRuby Portland Oregon New Member

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    My perspetive is this - you are in business so that I will buy product from you - I pay you money to provide me goods - you do not pay me money to shop in your store. You either provide what I am looking for at a price I consider reasonable or I dont buy from you. Other than that unless you are a personal friend I really dont care about your problems. Customers should not be bothered by a businesses problems because frankly I dont care what your problems are. If you cannot provide m what I want I will shop some where else.

    James Ruby
     
  13. WhyteCheddar

    WhyteCheddar East of Moscow by the Willamette Well-Known Member

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    Nobody should ever abuse the help in any commercial establishment. It is very poor behavior. As stated, the guy behind the counter does not have much within his control. He is probably as frustrated as you are. So as long as they are treating you respectfully, you should return the favor.
    In addition, if you are a business owner then 'answering the same question 100 times from 100 different people' is your job. Your CHOSEN job especially if you are the owner. To bristle over 'lowly' consumers coming into the business, invited by you, and asking questions is a sign of a business owner who is not customer service oriented. Not that I expect you to like the '100 questions', but the customer should never be able to tell that you are weary of it.
    You really should post the name of your store. Because I would love to come in and buy some of that .223 that you are rationing because apparently nobody else even has the inventory to do that.
     
  14. WhyteCheddar

    WhyteCheddar East of Moscow by the Willamette Well-Known Member

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    Running a small business like these is a high art. The balance and the effort is remarkable.
    Hats off to you, to the small businesses of this country that is our economic backbone.
     
  15. moose

    moose northwet coast Well-Known Member

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    I'm still shooting white/red box PMC that I got pre 2k for about 12 cents a round. I thought I got ripped when I bought it too.
     
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  16. MrNiceGuy

    MrNiceGuy between springfield and shelbyville Well-Known Member

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    With all of the small businesses struggling to move inventory and make a profit, it's good to see one small business owner bubbleguming about being so busy they cannot keep inventory.

    I'll be sure to shed a single solitary tear for the hardships caused by the MASSIVE SUCCESS you are dealing with.
     
  17. Trailboss

    Trailboss Vancouver, WA Well-Known Member

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    It's rather simplistic and short sighted to suggest that the members of this forum can substantially reduce global demand for ammo. I rather suspect that a total stoppage of buying by forum members would have little effect on market demand.
     
  18. JackThompson

    JackThompson Valley of the Demons Well-Known Member

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    100% agree with what Whytecheddar said.

    You're in the gun business. prepare to be asked the same question a zillion times.

    When I was looking for my first AR-15 my biggest question was "What's the difference between 5.56 and .223?"

    After asking those questions, and getting good answers from patient store owners, I've heard EVERY single AR-15 Newbie ask those same questions.

    As a store owner you just smile and answer those questions... over and over... forever.

    For JGRuby,
    I prefer a much more personal experience with my local small businesses. I like to befriend local shop owners. It tickles me pink when they actually KNOW what caliber of gun I have, or what my favorite comic book is... and maybe even shoot me an Email, or call or make sure to mention it when I walk in.

    That kind of relationship is a two way street. If I want that level of personal interaction, I should care about their business, and owners that strive to provide that level of community.
     
  19. WhyteCheddar

    WhyteCheddar East of Moscow by the Willamette Well-Known Member

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    And from the 'patting oneself on the back' category, I just returned from an unscheduled stop at the local Wally World and to what my wondering eyes should appear but eight tiny boxes of winchester value boxes of 9mm for $22.47 each...LOL I did my fellow man a service by fighting the temptation of buying all of it and instead just procured one. Along with a box of Remington .22 golden, 225 count for less than $10. Oh, and a box of Winchester super X .308 150gr for a mere $18.
    I left plenty on the shelf for y'all. But there was a real greedy looking dude eyeing the remainder as I was walking away with my prize. So, if HE bought the remaining 7 boxes what does that make me? Most likely a chump.
     
  20. Blkbear

    Blkbear Seattle New Member

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    Nah just makes you a guy that only wanted/needed/bought one box. There will always be "that guy", that sweeps the shelves, when he sees a good deal (to him).