They're charging things like food, rent and gas.
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SOLD/EXPIRED Are Reloading Retailers and Manufacturers Worried about Recession or Just Demand?
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These companies are controlling everything. It has less to do with your demand. They produce half as much and charge double. Simple math. Unfortunately covid created that. Look at what a pound of powder costs now. $60-$75 a pound out the door. I've watched a particular 8 pounder sit on a shelf for the last 6 months listed at $380. Just today it went up to $460. You buy less, they make less and charge more.
That is some of it, but be honest. Most of America lives beyond their means and does it through credit. It is not all food, rent and gas.
Yeppers, I believe you done did yur homework.
We can believe in the evil/greedy capitalists theory but it was created by politicians as an excuse for their flawed policies that cause the problem. That people buy into it rather than holding politicians accountable for their failures is dismaying.
Businesses exist to make money. The powder companies want to make money, know that people who choose between equivalent products buy the cheaper one, and if Alliant could sell a pound of powder for $1 cheaper than Hodgen, they would do it. They all have the same regulatory overhead, same payroll expenses, same raw ingredients (mostly oil-based) costs. Anyone checked where oil is today versus 2019? And, they're not going to produce massive volumes that they can't quickly sell, because the tax laws punish thrm severely for carrying excess inventory of finished goods. If you've ever owned a small business, would you have ordered a year's worth of inventory, or would you buy a month's worth at most? I can tell you that, based on taking a gun shop from $770K sales and 15% gross margins to $2.4M and 36% margins in 5 years that inventory turn is critical to business survival. I learned to never have more than a month's worth of sales in inventory because doing so killed profitability.
That store stuck with the 8 lb keg, if it is the same keg, hasn't learned to get off old inventory and put the money into something that will turn more quickly. I only stocked 1 lb units at a higher than mail order price because of the convenience to customers of having it now and not paying shipping and hazmat, would order 8 lbs at a good customer price if they paid in advance so the turn was instant, and knew I couldn't compete back then with the Grafs and Natchez's on bulk reloading supplies. Today, with the increases in shipping costs retail stores can't. I used to drive a couple of hours to a distributor to pick up pallets of ammo, reloading supplies, and guns to save hundreds on shipping and hazmat fees... the only way I could stock powder and primers at a reasonable price (got the other stuff because I was up there already).
Business is a dog eat dog world, and small businesses can't survive on small margins, not with an uninvited senior partner who invests nothing, takes a chunk of money off the top, makes you pay them for each employee, and limits your ability to make a profit.
None of this is new. The problem is nobody has to sell a pound of powder for a $1 cheaper. They all charge more but make less product. It's not rocket surgery. If you're one of the only games in town today you're not worried about your customers. Anyone in their right mind would work less, pay less overhead and charge more if they could. And that's what they are doing. Same profit margins less work. It's the new America. We literally need them more than they need us. That store will keep that 8 pounder on the shelf for as long as they need to sell. And it will sell, it's obvious it's not hurting them. I know plenty of people who own small businesses that specifically dont make profit. In fact most of them are designed that way
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Once a large production batch of anything is running, the marginal cost for making additional units drops to effectively zero, even though the raw materials costs stay constant. So, the margin on the 10,000th unit of 1 lbs of powder is cheaper than the 5,000th unit, and much cheaper than the 100th unit. And you're right... no one has to sell a pound of powder for $1 cheaper, because the demand is such that they already sell every pound they can economically make at the current price, and making more would likely increase manufacturing operating costs and even might require a significant capital investment in new equipment. CCI made an announcement a few years ago when there was a shortage of available rimfire ammo... they were already running three shifts in their plants and would not invest in additional production capability because they didn't know how long the increased demand would work, and didn't want to be stuck with a huge capital investment that would become surplus to their needs in the near term. Who can blame them? What happened in the market instead is the increased availability of foreign-made .22 ammo... Wolf, Aguila, etc... into the US market because the cost per round was cheaper than building US facilities that would likely become superfluous in a year or two. That's capitalism... trying to get the most efficient use of money to maximize profit.
If demand exceeds supply, then supply will increase until it matches demand. Demand can be increased by reducing the price of goods... more people buy computers now that you can get a decent PC for under $1,000 then they did back in the 1980s when they were several thousand dollars. Similarly, once demand equals supply an ammo company could increase demand by lowering the price. How much .22 ammo would you buy if, say, Federal put their bulk .22 LR on sale for 50 cents a box, $5 a brick?
Re small businesses not making profit, this only works if they're not making profit by leveraging tax policy, e.g., depreciation, taking tax credits, etc. Businesses have to make a profit, in real terms (not tax terms), to stay in business. You can't make up losses by increasing the volume of unprofitable trade.
So you're basically saying that cci was working double time and paying their full staff throughout covid eventhough everything was shutdown and "raw materials weren't available..." wolf tickets man. The only plumber in my town makes whatever he wants and charges whatever he wants and works less if he wants to. If you don't like it than you're welcome to do it yourself or find someone else. There's plenty of demand and he still works as little as he wants. You're missing my point. Our demand is irrelevant if they have their thumb on production and output and can manipulate costs to make everything work in their favor. Just like the only local plumber in town.
You said it yourself. Business is around to make money. You really believe these companies are working double time to get you your consumables at a low price....you're mistaken.
As for businesses having to make profit that's incorrect. Tax terms is REAL terms. We cannot act like taxes don't play a roll in how profitable a business enterprise can be. If that were the case, nobody would waste their time writing off expenses and would just take the hits. It's all a part of the game and these companies are playing it.
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What keeps another plumber from working in your town? Surely people have called other plumbers in other towns, right?
With CCI the unprecedented demand post-COVID shutdown is what had them running three shifts. Raw materials were available, but at a higher cost. There's no conspiracy to restrict production in order to drive prices higher.
Agreed.... no one has any money.
Everyone needs a reliable vehicle. That cost has doubled in 4 years. Shooting is a luxury hobby.
I can go shoot my bow for zero cost in my back yard.
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