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VMI77 wrote:

K.Mooneyham wrote:I have no problem with retailers raising the price of ammunition due to the scarcity of it, not even prices at More-Expensive-than-Gold. So be it, they are likely paying more from the wholesellers and so they raise their prices to maintain their profits. And I have nothing to say about "hoarders" one way or the other, though I'm guessing a few folks have gotten to the silly level with the amount they have in their garages, etc. However, curse me for a "collectivist" if you want (though I am most certainly nothing of the sort), but its the "Gunbroker ammo crews" that I'm most irritated with. Call them "speculators", fine, call them whatever you want. But I'm not feathering their nests with my money. If they were simply trying to make a little extra on it, eh, whatever. That would be a market example because they would be earning money getting products from locations with stock to locations with scarcity. For example, the guys at the gun show are pricing their stuff higher than "normal", but still at a point that will result in the sale of the ammo. But these "buy it and stick it on Gunbroker" types are asking FAR over what that ammo is worth, even now, and that is evidenced by comparing it to places like More-Expensive-Than-Gold and the gun show prices. Its not a crime for these "ammo crews" to do this NOR DO I WANT IT TO BE A CRIME, so do NOT accuse me of "wanting a law against that": I DON'T. But, they are also creating ARTIFICIAL scarcity. REAL scarcity is caused by the increase in new owners, government purchases, law enforcement purchases, shortages in raw material, worry over future political shenanigans, etc., all the myriad of things that any market might experience. But buying it up, peddling it on "Gunbroker" a little at a time and pricing it out of the reach of almost everyone in the hopes of pulling big cash out of the pockets of the inexperience seems like a particularly deplorable action, and I hope they lose their shirts doing it. I feel about these guys the same way I feel about the government shutting down coal-fired plants just to make electricity more expensive to force people to "go green". I can't do anything about it, but I certainly don't have to like it.

We normally agree on things but I have to disagree with you here. If someone is pricing ammo at a price higher than the market will bear, then they're not selling it. They're bearing the costs of maintaining an inventory they're not selling and risking having to sell into a falling market. If they're not selling it at the current price, they're not going to sell it at a higher price. You need to take a look at the supply and demand curves. There is a range of prices that a market will bare for any item and what savvy sellers attempt to do is maximize their revenue by selling the same item at different prices. The idea is that the area under the demand curve is all potential revenue, and once costs are accounted for, you can gain additional revenue by selling both above and below the equilibrium price. An example of this is senior discounts --additional revenue is garnered by lowering prices to bring in customers who won't purchase at the higher equilibrium price. On the other end of the curve, higher prices are obtained by re-branding and marketing and selling into different venues. For instance, you're not going to get the same price for a painting by Renior at a garage sale as you'd get selling through Sotheby's. In your Gunbroker example they're selling into a market that, for whatever reasons, doesn't go to gun shows, and/or can't satisfy their demand locally and can afford the higher prices. They may or may not be savvy sellers, but the result is the same. Someone is satisfying demand at the upper end of the curve.

What something is "worth" is entirely subjective, and situational. Because you don't value the ammo enough to pay the price being asked doesn't mean others don't. In any exchange, no matter what the price, the seller values what the buyer is offering more than what he's selling, and the buyer values what the seller is selling more that what he's paying. No one is forcing anyone to buy anything. I see ammo every time I look, at prices I'm unwilling to pay. For instance, I'm not going to pay $50 for 50 rounds of 45 ACP because between what I have on hand, and what I can get now at half that price or less, I've got enough to meet my needs. However, if I didn't have any 45's and hence, didn't have any ammo, and I wanted to buy a 45, I'd definitely pay the $50 if nothing cheaper was immediately available. One of the first things I did when I could no longer find 22 ammo was go out and buy a 17 HMR --and plenty of ammo-- so I wouldn't have to dip too deeply into my stock of 22. Thus, I can shoot all the 22 and 17 HMR I have the time and opportunity to shoot. Also, there are certain guns I might like to purchase, but won't, because the ammo is not available to me or not available at prices I'm willing to pay (I don't buy any ammo over the internet).

BTW, no one can create an "artificial" scarcity as you mean it unless they have sufficient market power --monopoly or near monopoly. People buying at Academy and reselling on Gun Broker simply don't have the market power to create scarcity. They're basically performing arbitrage because the prices at these big stores are too low. We know they're too low for an absolute fact because their shelves are nearly bare and there is an ammo shortage. A shortage means that the market hasn't cleared...IOW, the big stores are selling below the equilibrium price, otherwise, supply and demand would be in balance at higher prices and there wouldn't be a shortage. But another way to look at it is this: all prolonged shortages in a free market are artificial, because in a free market a shortage only lasts until a new equilibrium price is reached. So, this shortage is artificial in that sense, but it's not caused by greedy speculators, it's caused by the big suppliers keeping their prices below the market equilibrium price.

Cedar Park Dad wrote:

K.Mooneyham wrote:I was trying to make sense, and I probably didn't. So here is an example. Say there is a hurricane, and an area gets hit hard. Someone goes to their local Wal-Mart outside that hard-hit area and buys a bunch of bottled water for 25 cents a bottle. They buy cases and cases of it, and take it to the hurricane area and resell it for 50 cents a bottle. That is fine because they helped move those goods from a place of plenty to a place of scarcity, and they deserve to make money doing so. They not only provided the product but also a service. I don't call them "gougers" or anything of the sort. The people in the hurricane area might not even have the water without folks buying it and bringing it in. But the "Gunbroker ammo crews" are the equivalent of buying all the bottled water they can get their hands on, but then only selling a couple of bottles a day and charging $1.00 a bottle, even though they have pallets of it. They would have still made money the other way without creating artificial scarcity to do it. Maybe a bad example because water is so common, but still I hope this made sense.

A fair argument but that is not what is happening. What is happening is that people are buying up all public inventories and reselling them in the same area. Its closer to monopolistic competition then helping the consumer in a tight market. THEY ARE CREATING THE TIGHT MARKET.

chuckybrown wrote:So this morning I happen to be near an Academy a little before 8 AM, and I need a plastic ammo box for my upcoming flight.

I pull up, and see three guys in line. I see ammo on the counter. Cool.

So, I stand there for fifteen minutes or so listening to the small talk.

Doors open at 8, and the guys in front of me each get a box of .22, & one guy gets a box of .223. I'm up, and I get a box of .22. One. Heading to the ranch tonight, and I'll go after some turtles.

I make my way to the ammo aisle to pick up that ammo box for my upcoming trip. One of the guys in line behind me comes up the aisle and looks at the .17 ammo. He promptly pulls every box off the shelf. Probably 20 boxes. As he is walking off someone asks the clerk "hey, you guys have any .17"? The hoarder says "NOT NOW" in a rather boastful tone. Clerk asks "you got it all"? "HE __ YEA. WHY NOT?" Mr. Hoarder responds.

Really? I just don't get it. I doubt very seriously that this gent was going to shoot that much .17.

Maybe soon this will all calm down...and the guys that can't make the 8:00 AM run can find ammo too.

I know, free market, first in line, blah, blah, blah....but at some point......

My .02. That's all.