Capitalism vs. Profiteering : Grizz's Den
 The Grizz's Den
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Capitalism vs. Profiteering

by RK Hoffman on 04/06/14

Today on facebook someone was attempting to sell 22LR. He had 3575 rounds in Federal and Remington bulk packs (the stuff Walmart carries) for $400.00. That's a little over 11 cents per round. I've seen it higher but the average price is around 5-7cent per round . So he probably had a 40-50 percent markup over RETAIL PRICE. he was getting blasted by other members of the group and eventually closed the post. Was that Capitalism or Profiteering?

 I see the same type of  people coming into the big box sporting goods store where I work part time almost everyday looking for 22LR. They tell me about every place they've been and where they did buy ammo. They're the same people who blame the government for the ammo shortage and when I tell them the shortage is consumer created and explain to them how, they either shut up  and walk away or stay and we have an intelligent conversation about guns, ammo and related subjects.
Another local dealer received a pallet of 22LR and a customer wanted to buy it all . When he was told he was limited to 3 boxes he complained that he wanted to buy it all because there were gun shows coming up. The salesman told him that his business wasn't welcome and that he wouldn't sell him anything. 

Get your favorite beverage, make yourself comfortable and smoke em if you got em because here's my opinion....
 
Flash back to November 2008 immediately after obama was elected a run on guns, mags and ammo began due to fear and panic. That time all ammo except 22LR was in short supply as well as primers for reloaders. After about a year things eased up, but because of the popuater of doomsday preppers, tin foilers aka Reynolds Wrappers and their blogs, doomsday survivalist forums and television shows all of a sudden the 22LR was the ultimate survival round (Insert sarcasm font). Everyone was buying 22LR guns and conversion kits for their centerfire guns in preparation for the apocolypse or obamalypse.

Roll forward to November 2012 obama is re-elected and once again the fear and panic rises, then in December Sandy Hook happens and and people go into Code Red buying frenzy driving prices up and supply down. This time though thanks to the above mentioned preppers and  Reynolds Wrappers the 22LR is in short supply. Now the market has begun to settled, guns are more avaiable as well as centerfire ammo and prices are slowly rolling back. 22LR remains in short supply because it's still the preppers "weapon" of choice and profiteers can buy larger quantities of it for less than centerfire and turn a higher profit. 

Don't get me wrong, I'm a businessman and a Capitalism, but excessive markups on high demand items isn't good business in the long run. When ammo was in short supply I sold it to my students at my cost in order for them to be able to attend class. How many students would register and pay for my classes if I charged a 50% markup on ammo? I know it's supply and demand and I probably could get some students to pay the higher prices....once. Then they'd go elsewhere for  further training and wouldn't recommend me to their friends or even worse tell them my prices were excessive! 

These people who are reselling 22LR aren't concerned about repeat business or satisfying their customers because they're not capitalists, they're short term Profiteers taking advantage of a situation. I look at them with the same disdain I have for those who chase natural disasters in order to sell high demand items at inflated prices and offer shoddy repair services to the uninformed public before they disappear into the shadows waiting for their next opportunity.


Comments (2)

1. KC Boyle said on 4/6/14 - 10:44AM
Very insightful piece and strong argument for rational pricing.
2. Frank said on 4/6/14 - 11:44AM
I agree with much of your post and I hate to see where it is today. I personally believe the people are buying this ammo to shoot. Be it their children, grandchildren or themselves. I think anyone that wanted to stash away 10,000 rounds of any caliber has already done that and not continuing to bleed the stores. The 22LR is different, we consume it and need to replace it. Just my 2 cents. And thank you for this insight, good stuff!


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