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I don't think they are as worried about over producing the market as they are the potential for govt regulation or legislation which could adversely affect the market in a short time.
Manufacturers are looking long term when they make these kinds of capital investments. They have no intention of getting their "million" bucks back in a year. The returns on that kind of investment is spread over several years.
Even if an ammo company could miracle up another million dollar ammo machine, what good does it do them when they can't miracle up more brass, powder and bullets? All the brass powder and bullet companies now have to go miracle up more of their own machines?
If it were easy or even financially prudent to simply ramp up capacity, all of these companies would be doing so. Where capital expenditure is involved, it takes years to build and install large amounts of capacity, so it takes years of sustained increased demand to justify expansion. Best you can expect a year long panic driven spike in demand to do to major manufacturers is cause them to ramp up their projections a little bit, and maybe add on a little more extra capacity than they had planned to do next time they upgraded or serviced their physical plant.
While skilled labor and raw materials might be hard to come by, "making back the investment" would not take very long at all right now. CMP, all by themselves, has 35,000,000 rounds of Aguila .22 on order at the moment and I'd hazard a guess that 95% of the population has never once bought ammo from CMP which makes their 35M order a proverbial drop in the bucket in terms of nationwide demand.
Quote:
Originally Posted by RCCrawler
Sounds pretty simple.
Write up your business plan and if is that good, mist any bank will fund it. At today's interest rates it's a loch right
Has everyone dismissed any number of sudden knee jerk regulations the government could put in place to affective lay curb the ability to purchase said ammunition?
We would all like to think that can't take place, but I am willing to wager all of these companies have this in the back of their minds. Trying to be ready to address worse case scenarios, is inherent in all successful businesses. There are major changes being discussed now, as to how the IRS is going to address investments in hard assets also. Those changes are planned for 2014......
it always looks easy from way outside.
We done yet..? I need to get up early to buy my allotment of ammo to resell on gunbroker. /sarc off
I'm glad I reload.
On the bright side at least gas is dipping down below $3 per gallon.
Quote:
Originally Posted by SamuraiCO
22lr ?
What I am mostly reading is frustration. The prices will stay high until the numbers of people willing to pay the high prices to the “gougers” stop doing so. At that time the ones who were making a big profit will begin to have an overstock problem and their prices will tumble as they try to unload it before the other “Gougers” do. The stores will be able to get their stock back in order at that time.
The mentality so many have is the same one we see when a storm is coming. Everyone without an extra can or two of food, eggs, milk, Oreos or bottled water go to the store and clean it out. The normal supply and restock didn’t’ change, the consumers’ behavior did.
Remember apparently normal people get into fist fights over a damn tickle me Elmo doll or pepper spray and beat one another up for a set of $1 dish towels on sale.
Now imagine the same human conditioned response of a real or imagined threat/fear they will need mounds of ammo to stay alive in the coming lean years; and what they will do in order to “save” themselves from the tyranny of government? The behavior is the same; just the panic has continued over months instead of days. The difference is the perceived length and fear of a storm of government tyranny has a longer shelf life than snow.
BTW King Soopers will have more groceries on the next truck, just like the ammo suppliers will have when people stop panic buying. In fact I would wager the prices will drop because of an oversupply “problem” at that time.
Simple supply and demand.
Someone believes in SantaQuote:
Originally Posted by Kmanbay
.22 is in short supply because I bought it all.
[Neene2]
No u didnt. I still have few thousands listed on armslist :)Quote:
Originally Posted by hatidua