The hoarding isn't quite over.....

[K.Mooneyham]

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.

[Cedar Park Dad]

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.

Agreed.

[Cedar Park Dad]

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.

[K.Mooneyham]

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.

I wish I could type as well as TAM. That is what I was trying to say, something like that, anyway.

[VMI77]

Thats an artificial inflation of the market.

No, it's not. It's a clearing function taking place because the market is being artificially constrained for political reasons --because Americans have been indoctrinated to believe that it is somehow immoral to raise prices when demand greatly exceeds supply.

[Cedar Park Dad]

Thats an artificial inflation of the market.

No, it's not. It's a clearing function taking place because the market is being artificially constrained for political reasons --because Americans have been indoctrinated to believe that it is somehow immoral to raise prices when demand greatly exceeds supply.

No. Don't kid yourself. Arbitragers provide a service in arbitraging between markets to make them more efficient. They do not create the shortage in the first place, and then resupply the same market. if it were a few companies doing this, the DOJ would be all over them with the Sherman and other Acts.

[VMI77]

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.

[VMI77]

Thats an artificial inflation of the market.

No, it's not. It's a clearing function taking place because the market is being artificially constrained for political reasons --because Americans have been indoctrinated to believe that it is somehow immoral to raise prices when demand greatly exceeds supply.

No. Don't kid yourself. Arbitragers provide a service in arbitraging between markets to make them more efficient. They do not create the shortage in the first place, and then resupply the same market. if it were a few companies doing this, the DOJ would be all over them with the Sherman and other Acts.

Sorry, but you're just wrong. I'm not going to write a treatise, so I'm simplifying, but: 1) The guys buying from Academy and selling on Gun Broken don't have the market power to create a shortage. It's simply not possible to create a shortage by withholding supply unless you have significant market power, and the ammo market has many suppliers, foreign and domestic, and distributors. 2) Without going into all the relevant assumptions, there is no such thing as a prolonged shortage in a free market, BY DEFINITION. In a free market a new equilibrium between supply and demand is always reached; in the case of increased demand, at a higher price. Without a monopoly, the ONLY way to prevent equilibrium from being reached is intervention in the marketplace. A shortage is nothing more than a temporary disruption of equilibrium between supply and demand. These guys are selling at the upper fringe of the demand curve and cannot possibly control enough volume to set the market price. But even if we accept your notion that they're buying up all the supply and reselling, it's just a restatement of the fact that prices are too low, because if they weren't, there would be no profit in reselling. Anyway, your contention makes no sense on any level, since if that tactic worked, it would be possible to do the same thing with any item at any time, leading to a perpetual shortage of everything.

[rotor]

People that claim they won't buy anything now at expanded prices because they have plenty on stock already are "prepared" or hoarders or whatever you want to call it. This is no different than buying stock, you hope to buy low and sell high. For me it is usually buy high and sell low. Gold has dropped $600 an ounce recently. Sirs ( and madams), this is capitalism and there is nothing wrong with it. You take a gamble when you buy high hoping to sell even higher. The Hunt brothers did this years ago trying to corner the silver market and I believe they lost their shirts. The alternative to all of this is that some government worker demands that the price is set by the government and then there will be NO supply at all (remember the first Arab oil embargo).
On the positive side, as a reloader, supply is picking up. Primers, powder and bullets are becoming much more available which means that they are not being tied up in the commercial market and that most likely will be available at lower prices. What has surprised me the most was the shortage of rimfire ammo. Are all of the big companies converting their efforts to centerfire ammo and away from rimfire because that's where the money is? The shortage will be over when rimfire is readily available. And then all of us will be hoarders again ( or just call us prepared).

[Cedar Park Dad]

People that claim they won't buy anything now at expanded prices because they have plenty on stock already are "prepared" or hoarders or whatever you want to call it. This is no different than buying stock, you hope to buy low and sell high. For me it is usually buy high and sell low. Gold has dropped $600 an ounce recently. Sirs ( and madams), this is capitalism and there is nothing wrong with it. You take a gamble when you buy high hoping to sell even higher. The Hunt brothers did this years ago trying to corner the silver market and I believe they lost their shirts. The alternative to all of this is that some government worker demands that the price is set by the government and then there will be NO supply at all (remember the first Arab oil embargo).
On the positive side, as a reloader, supply is picking up. Primers, powder and bullets are becoming much more available which means that they are not being tied up in the commercial market and that most likely will be available at lower prices. What has surprised me the most was the shortage of rimfire ammo. Are all of the big companies converting their efforts to centerfire ammo and away from rimfire because that's where the money is? The shortage will be over when rimfire is readily available. And then all of us will be hoarders again ( or just call us prepared).

There is a second option. They just don't buy anything in a bubble. Its not food, water, or shelter. They don't actually need it. Not like coffee. I need coffee.

[K.Mooneyham]

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.

I've never taken any classes on economics, and my knowledge comes from what I read here and there. So, let me paraphrase and see it I've got this straight. There isn't ONE "market price", there is a market price in each market: retail is a market, on-line is a market, gun shows are a market...and each one has a price that it will bear. Additionally, the retailers' price(s) are being kept low (perhaps to keep customers coming in who will buy other stuff as well as ammo), and thus that enables the on-line market to keep being stocked by the guys I refer to as "ammo crews". So, its not the "ammo crews" grabbing it up off of the retail shelves and selling too high (because someone is obviously buying at least some of it from them) but it is the retailers selling too low that is causing the problem because the supply is selling out too quickly...that would be how price controls cause shortages, looking at it in a very narrow context, right?

[The Annoyed Man]

I just bought ammo from CTD today. The price was considerably higher than ammo used to be, but it was considerably less than I've seen it selling for in recent memory and so I thought it was a decent deal in the moment:

• 500 rounds of ARMSCOR brass cased .223 62 grain FMJ: $264.75, 53¢/round
• 250 rounds of ARMSCOR brass cased 9mm 124 grain FMJ: $95.95, 38.4¢/round
• 250 rounds of ARMSCOR brass cased .45 ACP 230 grain FMJ: $122.95, $49.2¢/round

That's still higher than I would have wanted to pay, but there was no limit to the number of boxes I could buy, and I didn't have to wait in a line in the morning outside Academy or Walmart. I thought it was pretty good pricing given the current market.........

......until I checked with gunbot.net...........

Seems like ammo prices are suddenly dropping.

[Dadtodabone]

Yes they are. And, lots of inventory, I've been watching a couple of sites to see how long it will last. Days, not hours or minutes, days.

[bizarrenormality]

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.

And they're not too big to fail, so there's no bailout in store for them.

[VMI77]

I've never taken any classes on economics, and my knowledge comes from what I read here and there. So, let me paraphrase and see it I've got this straight. There isn't ONE "market price", there is a market price in each market: retail is a market, on-line is a market, gun shows are a market...and each one has a price that it will bear. Additionally, the retailers' price(s) are being kept low (perhaps to keep customers coming in who will buy other stuff as well as ammo), and thus that enables the on-line market to keep being stocked by the guys I refer to as "ammo crews". So, its not the "ammo crews" grabbing it up off of the retail shelves and selling too high (because someone is obviously buying at least some of it from them) but it is the retailers selling too low that is causing the problem because the supply is selling out too quickly...that would be how price controls cause shortages, looking at it in a very narrow context, right?

More than different markets (though there can be other markets and even inverse demand curves), there are individuals who are willing to pay more than other individuals.....such that, for example, on one end of the curve, the prices individuals may be willing to pay for a 500 round box of 22 is $5 and at the higher end of the curve, $50....with most people willing to pay $15. Of course suppliers are willing to provide plenty at $50 a box, and very little or none at $5, and between what sellers are willing to provide at a given price and buyers are willing to purchase, the bulk of sales will occur at an equilibrium price...perhaps around $15 in this example. That doesn't preclude sales to people willing to pay more, and those willing to pay less, and some sellers may be able to market to those people as well. But when there is equilibrium, supplies are readily available. The presence of a shortage means an equilibrium price has not been reached.....which as you said, means supply is selling out too quickly because the prices are too low. So, yes....right.

Even post hurricane, for say, gasoline in high demand....there would be no shortage if prices were allowed to rise --what people call gouging-- but what really distributes supplies to those whose demand for them is greatest, as expressed by their willingness to pay high prices. If there was no interference in the market, it would also serve to increase inventories, since people who couldn't afford the higher prices would keep gasoline on hand, knowing that they won't be able to pay the higher prices after the hurricane. That will also dampen demand somewhat and reduce how far prices will rise.