Why is Ammunition So Expensive: UPDATE

I just got back from a little trip to civilization (Dallas). On my way back, I felt the urge to check out a store with a HUGE selection of guns. The billboards weren’t lyin.’ Wiley’s Guns offers an impressive collection of firearms, from ARs and AKs to the tiniest derringers. They also stock ammo. LOTS of ammo. And they have lots in stock. I plan to do a full review of this little gun store in the middle of nowhere, Texas in a couple of weeks (when I can get back there and do it justice). In the meantime, I wanted to report a couple of things heard – and overheard – regarding ammunition and availability. Keep in mind, until we here at TTAG can verify this information, consider this data as nothing more than speculative statements from unverified sources. But it does have that ring of plausibility.

I was told that at least two Walmarts (one in Terrell, Texas) had recently lost their FFL (Federal Firearms License) and thus their ability to sell both guns and ammo. When I asked why, and was told that the Feds perform regular audits, The Walmarts lost the FFLs due to inadequate record-keeping.

More germane to the subject at hand, I was told that several ammo manufacturers will no longer sell to the so-called “big box” stores (think: “Walmart” and “Academy Sports & Outdoors.”

The big box stores buy in bulk, which generally gets the buyer a better price per box. Apparently, one or more of these guys weren’t content to sell the ammo at the list price, or even a discounted price, enabling them to make a buck or two. Nope – they sold their shipments below cost to the public.

This, kiddies is what we marketing types call a “loss leader,” in other words, a product or service priced artificially low to entice buyers into the store, where they purchase more than they’d originally planned. Of  course if an ammo manufacturer stops selling his or her wares to Walmart, et all, this could drive the price of ammo up on it’s own. (This same logic can be applied to airlines – because Southwest doesn’t fly into Shreveport, people who want to fly, oftentimes drive to Dallas (180 miles away) and hop on board a SW Air flight – saving themselves a lot of money in the process.

Check back here, as the American ammunition story continues to unfold.

comments

  1. avatar Mike says:

    Well at least for Academy, they have the good sense to sell house brand ammo (Monarch), which is just relabeled Prvi or, in the case of cheaper steel cased stuff, Russian. It’s cheap and decent enough for plinking.

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