Posted on 12/20/2012 8:30:33 PM PST by matt1234
In the face of possible legislation to restrict and possibly ban firearms and magazines over a certain capacity, waves of panic buyers have stripped shelves to the paint, at both retail and online gun stores.
A combination of demand and gouging has caused prices for rifle magazines and rifles, parts and accessories to more than double, with some vendors selling goods at five times what the average rate was just a few weeks ago.
Many online companies are selling magazines faster than their systems can handle, accepting orders for stock they don’t have and running out of stock mid-transaction.
Brownells spokesman Jason Corpus had this to say.
“I wanted to take a minute to shed some insight on the magazine situation if i can. First of all I wanted to offer an apology for the situation… with magazines being ‘In-Stock’ and back-ordered moments later… [The] demand for magazines actually exceeded the ability for the system to keep up with the volume that was being ordered. They way that our website works is that inventory is fed from our ERP system directly into the website in ‘real-time.’ Unfortunately, ‘real-time’ is the amount of time that it takes for the transactions to work both ways. During normal circumstances, it is nearly instant. However, we’ve been receiving orders at such a pace that these transactions have gotten slower. We absolutely apologize again, we definitely don’t want that ever to be your experience.
“To shed some more light on the magazine situation at present, it really has been unprecedented in the last 5 days. During a roughly the 72 hour period from Sunday afternoon to Monday evening we sold the ‘average demand’ equivalent of about 3.5 years worth of PMAGS, and and an even greater amount of our Brownells magazines. We’re working like crazy to get these orders to you as quickly as possible.” [Emphasis ours.]
He continued, saying that they’re working with Magpul and their own in-house magazine manufacturers to compensate for the sudden spike in sales. Magpul will be focusing on black magazines for the most part, which makes sense. They’re the most popular and they will spend less time re-tooling for other colors, focusing on production over variety.
This is not a truly free market. The threat of regulation has dramatically upset the normal flow of production and distribution. On the surface, it would seem like a simple supply and demand problem, except that the demand is being inflated externally, overstepping the capacity of suppliers, manufacturers, distributors and vendors.
Retailers from big national chains to your friendly local gun store are heavily dependent on credit with their suppliers. While everyone is definitely making more money now, if supply gets shorted by people in the supply chain withholding and stockpiling product, everyone will suffer.
And if the credit gets shorted, the network of finance that helps get the gun you want from the factory through the distribution channels to your gun store, dealers, distributors and other parts of the supply chain will not be able to cover their expenses the same way. That is to say, if this spike causes financiers to shorten the time on returns, favoring short-term business over long-term investments, then stores may be forced to close, especially smaller shops, and shops that don’t get the first bite at the supply apple.
Because this spike is going to be temporary, one way or the other, it doesn’t make any sense to invest in expanding on manufacturing and distribution. Manufacturers and distributors are beginning to stop offering discounts, and suppliers and distributors are already rationing their sales, meaning that their inventory is earmarked for select sellers.
When this happens, some stores just aren’t going to be able to re-supply.
“And since they can’t re-stock, the prices for existing items in inventory go sky-high. The reason for the rationing isn’t necessarily that distributors are looking to hike the prices. It’s more likely they’re simply out of stock. Period.”
So yeah, they might be selling an $600 M&P15 Sport for $1,200 today, but unless they get more—anything, really, beggars can’t be choosers—things are going to get a lot rougher.
We can hope that the companies going up the supply chain ration and distribute their products fairly, but that’s a business decision that also may be in short supply, particularly in the face of vastly rising short-term profits and the looming possibility that there will be little or no long-term profits if government regulation makes their products illegal.
Correction: Jason Corpus contacted us to correct their earlier estimate; they sold 3.5 years’ worth of magazines in a 72-hour period, not 36. Not that it’s any less mind-boggling.
[Still working on last portion of 4th-of-4 trucks at FFL Store]
Regional police here to unseal gun/ammo-laden truck #2 and supervise arms transfer at 8:30-10pm, last nite. One Class III FFL-consignment/transfer antique 1937 Thompson .45 subgun in shipment. Nice LEO guys. Made new friends. Their families used to shop at my Farm Business.
Very few long guns came off since 6pm last night. Less than 50 Remy 870/1187s, S&W M&P 15s and Mossberg 12ga; that’s it. Less than 200 semi-auto 9mm/.45 pistols & .38/.357 revolvers. Mostly accessories. All ammo was 9mm, .45ACP, .308 NATO, .30-.06, some .22LR, lots of optics. My CTC Green Laser grips for 5” Kimber 1911 not in shipment, are BO’d 4-6 wks.
8:50am and 3 customer cars already waiting in pkg lot. Gonna be nuts around here again today.
Since world is ending *sometime* today, all of this won’t matter, will it? Heh.
Had 2 helper/PT-employees overnite so we got everything logged-in, SKU-priced, tagged and displayed. They knew display routine and locations; that job went quickly. Down to last 2 crates in 4th truck, and we should be done by 10am, when store opens.
Owner & wife coming-in w/ breakfast and coffee. Taking break and then back to finish-up and go home.
Quick shower & shave, Hoppe’s After-Shave, and then out to get Farm chores done. Long 2 days... Yo Ho Ho!
With a threat of regulation/ban, the best place for inventory is in people’s homes rather than in warehouses or shelves, where a ban on sales could suddenly make inventory worthless.
Even if there’s a ban on sales, friends can quietly trade privately among themselves.
You’ve been up all night? Holy Carp! You’re too old for that.
And each of those transactions have been noted, flagged, and stored.
They know who to go after now.
BTTT
Been off the airwaves awhile- you done good, bro!
Even now after the Panic of 2012, one can still find good buys at small rural gunshops on guns and ammo.
I bought some black powder stuff at Christmas and waltzed right thru Cabela’s to the checkout while there were over a hundred nervous types waiting at the gun counter.
I went thru the panic of ‘94, the Y2K panic, and then Americans panicked again in ‘07-’08 when we were concerned Hillary might be elected. I resolved after ‘94 AWB not to get caught pants down again. Contrarians are the turtles that win the race.
FReegards!
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