Are you buying ammo at higher than market prices?

[Sam1911]

From another forum that I frequent now and then.

Jcwit that's great info and just exactly what I've been saying. A temporary bubble that should be met with price increases to curb rampant demand, thus allowing the production to catch up faster and the shortages to ease. WalMart has fought to stifle that necessary correction.

So you say there is no solution? But then you imply that the market is in fact the solution.

I say we don't need to worry or try to find/impose a solution. The market will take care of it if left to the natural flow of cost vs demand. Which is what the Winchester guy just promised.

 

[danez71]

Ahhhh hAAAAAAA.....

By George, I think I've got it!

What will probably be more effective is that some here contact Walmart etc and tell them of all of the experience and knowledge you have with economics, markets, supply and demand etc.


Then explain to them they are hurting one of their markets by selling things too cheap and under cutting their competitors.


Yeaaaaa.... that'll go far.

 

[Sam1911]

Sam you need to read posts closer

Do I?

 

[Sam1911]

Danez, Walmart has no interest in any of that. They have their own strategy and it is good for them. (How many times does that need be explained?)

As evidenced by MANY decisions they make, they aren't concernd whether it is good for you or me or the LGS or competition or the market or. ... Having stripped bare shelves in the ammo aisle and 200 people a day stopping in to wander all the way back to the ammo department is JUST fine with them. Having someone buy ammo from them and sell it on GB for twice the price doesn't hurt them at all, either. Though it gives folks around here pretty bad heartburn.

 

[jcwit]

Jcwit that's great info and just exactly what I've been saying. A temporary bubble that should be met with price increases to curb rampant demand, thus allowing the production to catch up faster and the shortages to ease. WalMart has fought to stifle that necessary correction.

See, even I can post something that opposes my viewpoint. I will admit it does make some sense.

Regarding reading the posts closer, I think you missed the comment about sarcasm.

 

[danez71]

No. No solution. It doesn't NEED a solution. It is the market at work, it will sort itself out and find its own new level in time, and no meddling will make things better.

I say we don't need to worry or try to find/impose a solution. The market will take care of it if left to the natural flow of cost vs demand. Which is what the Winchester guy just promised.

Jcwit that's great info and just exactly what I've been saying. A temporary bubble that should be met with price increases to curb rampant demand, thus allowing the production to catch up faster and the shortages to ease. WalMart has fought to stifle that necessary correction.
.

Ok... so lets get this straight.

A) The market will sort itself out.
B) No meddling will make things better.

C) Walmart, by not meddling with the market to "curb rampant demand", is stifling a needed correction in a market that doesn't need meddling because the market will sort itself out.



Alllllll riiighty then.

 

[Queen_of_Thunder]

A lot of people here say if Walmart raises its prices to some number they call the "market price" that everything will be ok. Not going to happen. First off as I posted earlier the "market price" of an item varies from locale to locale. Using Mike1234567 as an example the market price for 22lr will be higher in his area then it is where I live with 10 Walmart SuperCenters, a Dicks, Big5's, Sports Authority, 2 Academy Sports, Gun Ranges and numerous gun shops where I can purchase ammo. So all of this talk about Walmart raising prices is just Bunk.

BTW for those of you who think Walmart should raise prices I have questions. What makes you think the other retail outlets would follow Walmarts actions. What makes you think that Walmart wants to go from a low cost seller to the high cost retailer. I'm quite sure the other providers would love to see Walmart raise its prices so they can siphon off their customers.

 

[jcwit]

Slightly off topic, but many here should have lived thru the gas shortages of the 70's.

Gas stations went out of business, RV manufactures folded, suppliers went out of business. Times where hard. I was lucky, worked in management, for at the time the largest RV manufacturer in the U.S., no worries.

 

[Sam1911]

C) Walmart, by not meddling with the market to "curb rampant demand", is stifling a needed correction in a market that doesn't need meddling because the market will sort itself out.

Actually no. WalMart refusing to follow the market is messing things up. If they held their prices close to the going rate the demand would naturally be moderated. They hold themselves above/outside market forces and that unbalances things and drags out shortages ... And creates "scalper-gouge rds". (Grrrrr! Hate those guys!).

 

[Sam1911]

Queen, we just use walmart as shorthand for all the bargain retailers who choose to follow that model. And sure. Their competitors would probably undercut them. Though they are a huge gorilla in the room and others would follow thier lead.

 

[Warp]

So the general consensus among some of the members here is that the largest company in the world, the largest retail giant in the world, the largest retail giant in the history of mankind, the largest employer in the U.S. short of the government, has no idea what they are doing.

There's no way you don't realize how much you are lying when you make a post like this ^

 

[SFreed]

BTW for those of you who think Walmart should raise prices I have questions. What makes you think the other retail outlets would follow Walmarts actions. What makes you think that Walmart wants to go from a low cost seller to the high cost retailer. I'm quite sure the other providers would love to see Walmart raise its prices so they can siphon off their customers.

Having spent the last 30 years in retail, the reality is that if you are attempting to compete with Walmart, you wish they WOULD raise prices. Then, you could maybe make some margin back. Anybody who attempts to wage a war of price against Walmart quickly looses.

The other issue is that I thought no one was getting ammo? If that's the case, I can put any price on it I want, because I don't have any to sell.

 

[Warp]

So the general consensus among some of the members here is that the largest company in the world, the largest retail giant in the world, the largest retail giant in the history of mankind, the largest employer in the U.S. short of the government, has no idea what they are doing.

There's no way you don't realize how much you are lying when you make a post like this ^

----


To be more specific, here is where Sam1911 already very clearly pointed out why Walmart is doing what they are doing, and why it works, and why it is a smart decision for them.

But no, read what I wrote carefully. I said that WalMart DOES understand market value -- better than you or I.

But they don't just sell ammo. They sell 100,000 other products, and they have a market strategy that says they DON'T follow the market when one of their items goes through a market value swing. Their theory is that they want to be known for LOW prices. So they'll sell some things for much less than they could get for them -- i.e.: what the market is valuing them at. Even less than is profitable, occasionally. That gets butts in the store. They DON'T care that there aren't any of that item on the shelf today. People will still come look and while they're there they'll pick up some shampoo, a gallon of milk, a DVD and a t-shirt. The strategy is GOOD for WalMart, but not really good for "the market" as a whole. For one thing, it make all the other retailers (your beloved local gun shop, for example) look like cheats when they push their prices up to meet demand (and costs). For another, it simply FORCES the creation of a "flipper" class of folks who will trade their time standing in line at 6:00 am for making a clear $20-30 a brick on .22s. The product is selling at WalMart so far below what the collection of buyers is willing to pay for it, that someone is going to step in and act as a middleman to reap the harvest of that price discrepancy. It HAS to happen. Expecting it not to is like seeing a large gold brick to fall out of the sky and land in the middle of Main St. and believing that no one will stop to pick it up. It is there for the taking. We're living creatures, we collect resources to extend and better our lives, wherever we can find them. It's part of the definition of being alive.

Buying something for one price and selling it again at a much higher price will always be called greed by someone. Others will call it "making a living" or "wise investment" or some other term. If the point of the exercise is to turn a profit and therefore continue to meet life's expenses and maybe get ahead, then "greed" is absolutely fine, positive, and necessary.

And you know what? It works. More times than not that I have visited Walmart the past year, it has been to check for ammo, and I found none. Sure, a lot of those times I walk right back out the front door without buying anything. But then there are the times I did buy something. And if I buy something, I probably buy a few things. Coke, toilet paper, some Powerade, our Halloween candy, a Little Buddy space heater for the garage, etc.

 

[larryh1108]

BTW for those of you who think Walmart should raise prices I have questions. What makes you think the other retail outlets would follow Walmarts actions. What makes you think that Walmart wants to go from a low cost seller to the high cost retailer. I'm quite sure the other providers would love to see Walmart raise its prices so they can siphon off their customers.

What makes you think that if Walmart raised their ammo prices others won't follow? Walmart is perceived as the price leader even though not all of their prices are the cheapest. In a runaway demand like this, if Walmart raised their prices, every Tom, Dick and Harry would follow suit so they can actually make a profit instead of selling it near cost so they don't look bad next to Walmart's pricing. They sell out anyways so why not sell it out for more profit? They guys who sell a $25 brick for $75 may have some in stock and they may even sell them for that price but they don't care what the others sell it for, obviously. They're taking the short term profit at the expense of their long term business. Yes, Walmart does set the local pricing. You can bet on it.

Have you ever seen an intersection with 3 gas stations? They're usually priced with $0.02 cents of each other. Do you think that's by accident? Watch and see, if one raises his prices by $0.10, the others will follow even if the gas in their tanks is topped off. Why not? Why give away profit if you don't have to? When Walmart is selling bricks for $19.99, the other guys are giving away profit to be near Walmart's prices so they don't look bad.

If Walmart has a fixed profit margin of 28% in sporting goods then when they put in the cost of a brick of ammo, the retail pops out. You can be sure they get it cheaper than Joe's Big Guns down the road. If Joe wants to be near Walmart's price, he may sell it for $22.95 instead of $19.99 but he may only make 18%. If the ammo maker raised prices 25% to cover the current daily sell off of inventory, then Walmarts prices would also rise 25%. If $34.99 is the new market for a brick of ammo then so-be-it. We all have to get over it and ask ourselves if it's worth it and either buy .22LR ammo or sell our guns.

The average price for a new car not so long ago was $12,000. Now it's $22,000. Yes, we have more safety features and computer technology and we also get more MPG but the fact remains that the price has nearly doubled and we continue to buy it. Our other choice is to buy used and keep it running. 9mm ammo was $9/50 and now it's 12/50. Get used to it or roll your own or sell your 9mm guns. Prices go up and it's up to the buyer to decide if it's worth it to keep shooting or taking up another hobby. We determine the retail prices by buying all they make. It makes no difference what the real cost is. The price is set to where they sell their inventory with a week's supply on hand to start the new week. Prices will rise until we reach that plateau. Until then you'll see bricks sell for $20 and $75 and it's up to the consumer to determine the new, normal prices.

 

[Queen_of_Thunder]

Queen, we just use walmart as shorthand for all the bargain retailers who choose to follow that model. And sure. Their competitors would probably undercut them. Though they are a huge gorilla in the room and others would follow thier lead.

I'm having problems with that definition as Walmart is the only low cost retailer. None of the other big box retail outlets have the buying power of a Walmart.

Now if I accept your definition as to how "Walmart" is being used then people here are calling for retail outlets to violate the law by colluding on prices. So is this were we are today, asking retailers to break the law and control the price of ammo.

 

[Warp]

I'm having problems with that definition as Walmart is the only low cost retailer. None of the other big box retail outlets have the buying power of a Walmart.

Now if I accept your definition as to how "Walmart" is being used then people here are calling for retail outlets to violate the law by colluding on prices. So is this were we are today, asking retailers to break the law and control the price of ammo.

Just because Walmart has the most buying power and usually (but not always!) has the lowest price, that doesn't make them the one and only retailer taking the 'cost leader' strategy.

If you check things you will see Walmart is not the least expensive on everything. Not even on all ammunition.

 

[22-rimfire]

The "Walmart strategy" does work. I personally think it a great business model. I walk in there for bread and some chips and I walk out with $100 worth of merchandise. Always walk by the ammo/sporting goods to take a look and expect to see no 22 ammo. I get my wish just about every time. But the last Walmart had a lot of centerfire handgun ammo and even some 50 BMG. Some can't find 357/38spl.... I see that routinely now at Walmart where as two months ago it was a rarity and I want to buy my 3 box limit just to have a supply even though I really didn't want to spend that much money at the time.

So the 22 ammo shortage continues.... as does 22 WMR and 17 HMR at Walmart.

No Walmart is certainly not the cheapest on every item in their store. If it is real important to you, you need to check pricing on items you normally buy at a number of stores. Again, it is their business model. They deal is volume sales and I seldom leave there without spending at least $100 and if there is an ammo purchase, more.

 

[Potatohead]

Bobby Hoarder will need his closet space back, and until the corner grocer starts taking ammo instead of currency, Bobby will eventually be forced by hunger to dump his supply for $.30 on the dollar if that's all he can get.

If I was Bobby, i would just hang on til the next panic. I have a feeling they're going to be coming around quite frequently in the near future. I hate to say it but we may never see another Republican in office (oval).

 

[Warp]

I want to buy my 3 box limit just to have a supply even though I really didn't want to spend that much money at the time.

That psychological strategy is strong. It really is.

Especially when you typically see only an empty shelf.

 

[Queen_of_Thunder]

Just because Walmart has the most buying power and usually (but not always!) has the lowest price, that doesn't make them the one and only retailer taking the 'cost leader' strategy.

If you check things you will see Walmart is not the least expensive on everything. Not even on all ammunition.

The other items that walmart carries is not part of the discussion. The discussion is on ammunition and at this point in time its focused on 22lr. I don't care what they are selling socks,paint or bananas for as the only thing germane to this discussion is 22lr.

 

[Warp]

The other items that walmart carries is not part of the discussion. The discussion is on ammunition and at this point in time its focused on 22lr. I don't care what they are selling socks,paint or bananas for as the only thing germane to this discussion is 22lr.

Walmart's ammunition counter does not exist in a vacuum. You simply can not ignore the rest of the store, and you simply can not ignore what people do in the rest of the store when they show up to look for ammo.

Nobody cares that you don't care what else Walmart sells, because it IS a relevant factor. If you choose to ignore the facts of the real world and you choose to ignore that which makes Walmart's decision work so well, your points become, well, pointless...and nobody cares.

 

[danez71]

Actually no. WalMart refusing to follow the market is messing things up. If they held their prices close to the going rate the demand would naturally be moderated. They hold themselves above/outside market forces and that unbalances things and drags out shortages ... And creates "scalper-gouge rds". (Grrrrr! Hate those guys!).

But a Market is the pricing of goods and services that are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning.

Walmart IS part of the Market and a very very large part at that.

Are you saying that prices paid to unlicensed undocumented resellers are what the aggregate market price should be?

I wouldn't think that you are as that would go against what 'market' means.

Walmart has already implemented their strategy... what ever that may be.

As with everything in a (free) market items have a price range. The price range is the "going price" as you said.


If Walmart deviates from their normal business plan for this condition of a market, the effects it would have would been from a un-normal business plan of the largest retailer. It could then be considered "meddling".

 

[Warp]

But a Market is the pricing of goods and services that are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning.

Walmart IS part of the Market and a very very large part at that.

Are you saying that prices paid to unlicensed undocumented resellers are what the aggregate market price should be?

I wouldn't think that you are as that would go against what 'market' means.

Walmart has already implemented their strategy... what ever that may be.

As with everything in a (free) market items have a price range. The price range is the "going price" as you said.


If Walmart deviates from their normal business plan for this condition of a market, the effects it would have would been from a un-normal business plan of the largest retailer. It could then be considered "meddling".

Are you saying that part of the market should be ignored when looking at the aggregate market?

I wouldn't think that you are as that would go against what 'market' means.

 

[danez71]

All of this doesn't matter.....

What matters is that .... 9mm is better than .45 and except that .45 1911s are better than 9mm Glocks.

And what we should be discussing is why is it that if you shoot a home invader with standard ball ammo the prosecuting attorney may charge you with a inhumane kill if he bleeds out but if you shoot the home invader with a hollow point they'll say you intended to kill him and not just 'stop the threat'.

 

[Mike1234567]

I recently bought a brick of Remington Thunderbolt from Cabela's just to see if I could. It arrived a few days ago. I GAVE it to my FFL because he always treats his customers very fairly. He told me it wasn't necessary and he doesn't sell ammo anyway. I told him to just pass it along to create some good karma. He said he'd give it to his father-in-law who's in a wheelchair with Parkinson's and has been looking for .22 LR. Heh... interesting how karma works out.