Going, Going, Gone – Ammunition Continues to be our Achilles Heel
By Bren Brown
Last summer I brought you information about the ammunition shortage that began late Spring 2020 and today I update you that, sadly, not much has changed. In fact, things, as predicted, have gotten direr. So many people are wondering, what’s going on? Some of you have known about this for a long time, but others are just now becoming aware. You enter some of your favorite stores and realize the ammunition shelves are bare, or worse yet, you find some stores with a few boxes that you would have to sell your firstborn to be able to afford. It’s a complicated situation.
Who is this ammo shortage affecting?
Frontier Justice, big box stores, “Mom & Pop” locations, distributors, manufacturers, law enforcement agencies, and reloading enthusiasts.
What is causing this supply chain shortage?
There are many factors contributing to this shortage-
COVID-19: The coronavirus pandemic seemed to be when this shortage began. This is multi-layered. First, people all over the country “stocked up” once a potential lockdown was announced. Much like toilet paper, people bought large quantities of guns and ammo very quickly. This eliminated available supply at distribution and at manufacturers. Once the distributors ran out, most of them placed several multi-million dollar purchase orders with manufacturers which put the manufacturers in a bind. Large dealers and big-box locations also placed large purchase orders with these manufacturers which strained the supply chain almost overnight.
Second, COVID-19 restrictions at manufacturing facilities drastically reduced the number of employees supplying materials such as gun powder, casings, primers, bullets, etc. This has occurred in the United States as well as overseas.
Third, COVID-19 restrictions at the ports slowed the supply of materials such as gun powder. A shortage in primers also started around this time. Primers are still the most difficult to get. With Vista Outdoor’s acquisition of Remington Ammunition, there are only two domestic primer manufacturers left- Federal and Winchester.
Fourth, another domino-effect of the DMV’s being closed is that freight companies cannot get their drivers certified with their commercial driver’s licenses they need. A shortage in freight company employees is further slowing the supply chain. This has seemed to improve in late 2020 as restrictions are decreased.
Just when COVID had us all down, enter the nationwide riots. These riots caused more and more people to purchase firearms and ammo. Many new first-time gun owners were buying. Current gun owners were buying more. There were a record number 10.3 million NICS transactions in the first half of 2020. Remember- not all states require a NICS check if you have a CCW, and a single NICS check can be for the purchase of multiple firearms. NSSF states that most retailers claim their firearm sales were up 96% and ammo sales up 139% year over year. The supply was gone.
With talk of defunding of the police, we saw even larger increases in first-time gun buyers. When things couldn’t get more stirred up, 2020 ended with ‘gasoline on a fire’, and the election, as it always does, caused more spikes in sales. But why end there? Throw in the “capitol insurrection” and the silencing of social media platforms like Parler, and a new surge of different clients emerged. Effectively 2020 and the beginning of 2021 sparked the perceived need for the Second Amendment more than any historical expert could have predicted.
When will this shortage end?
There is no definite answer to this. And, not to be the complete bearer of bad news, but industry predictions are now up to two to three years. An important factor that most do not understand, is that there are really only two domestic sources for a crucial component to all ammunition—primers. Winchester and Vista are the two main suppliers for this component. Many of the other ammunition manufacturers, that you would recognize, rely heavily on these TWO companies for primers. Without the primers, no production. Primers are not arriving to the U.S. fast enough from overseas. It’s a matter of producing primers fast enough to keep up with demand in hundreds of companies trying to make ammunition. Effectively, a bottleneck situation. To run you through, Economics 101, we have to point out because every time this comes up someone says: just build bigger plants, open more, etc. We wish the world were this simple. The truth is that this is a risky, dangerous business, that requires governmental agency approvals and capital. Lots of capital. Ammunition is an expensive venture, and it requires that the volume remain past all of the craziness of the last year to be profitable into the future. In many ways, this goes to something that we talk about a lot in relation to the firearms industry…it’s a race to the bottom. When clients want to have cheaper and cheaper price points, you have to make the product for less or make less profit. The profits have been driven to such a thin margin, that few can actually make it in the industry. The client cannot dictate prices lower than production costs and we find the industry on a thin line here. It’s just economics.
Why did the price go up?
Manufacturers are doing their best to rapidly increase production. This has a heavy cost- new facilities, new machines, employee overtime, the cost of hiring and training new employees, increased freight charges, increased cost of raw material, making up for lost sales when raw material supply is gone, etc. Most manufacturers have raised prices between 10%-25% in the last ten months, which is then passed to distribution wholesale prices increasing.
Supply and demand. 9mm, .223/5.56 will be affected most as they have the highest demand.
In order to provide our clients with a solution, Frontier Justice has had to branch out into other brands of ammunition which sometimes carry a higher price than what clients are accustomed to. However, we will NOT do what some retailers have been driven to, in buying ammunition that is so outside of the price acceptable to the consumer that it actually sells but makes them angry to buy it. You’ve all heard or muttered about “price gouging”. Certainly, it exists. We have even been accused of it, but assure you that it has NEVER been in our DNA to practice such. We have stayed in our lane with margins before 2020, but prices have gone up so, with the same margins, we are still seeing high prices. Could we buy some slim quantities at outrageous prices? Sometimes, but we just don’t because we would rather play the long game and gain trust and loyalty at times such as this than turn a profit on a small quantity for the short term.
So, here we sit, with real blessings and real struggles also.
We have had ammunition for members only. Ammunition for everyone. Ammunition we post about. Ammunition we don’t post about. We have sent emails to members. We have not sent emails to members. We have limited amounts that can be bought. We have not been out of the most popular calibers for class participants. Many lines of our business are ammunition-dependent. We have tried to make everyone happy, but we all know that’s a fool’s errand. But, we are proud of what we have been able to accomplish with some great partners in the industry! We have managed the shortage to the best of our ability. We have offered some to the public as well. We believe heartily in law-abiding citizens having firearms. It is your right. We need our members and have given them loyalty, while also cultivating new clients, many of which have become members. We are doing our best and we are above all things ethical while doing so. We hope it shows and we hope that you all know that your business matters and your loyalty is what keeps us in business and growing. That investment in faith, family and freedom is what makes this group the best tribe of Americans under the sun. We are grateful and we hope to see you in soon—because we have ammo on the range and we want you to come build some fun, family memories while also strengthening a life skill that we pray you never have to use for such.
