Bullet prices NOT falling

[BlackBuzzard]

Just checked with my preferred bullet supplier.

He's still priced as if lead and copper are still at record highs.

In fact lead is off over 30% and copper is down 16% on commodity markets spot.

My supplies are getting thin......not sure I can hold out much longer. :(

BB

[Matt Cheely]

How long does the traded price take to reflect in actual prices that the manufacturers buy it at?

[rboudrie]

It's more like "how long does it take for some supplier to start selling at a price lower than what they have proven people will pay in order to take market share from a competitor?" Most intelligent suppliers will be very careful about starting a price war, and many may wait for others to lower their price before they do. In other words, bullets are priced just like you house is when you are trying to sell it - the most the free market will bear while moving the desired volume.

[BlackBuzzard]

Maybe its just me, but I have made significant changes in how I practice and play.........maybe 1000 rounds of .22LR a week practice, and only enough 9mm or 40SW for a match or two each weekend.

I used to spray bullets indiscrimminently at practice back in the good old days - not any more.

If my use history is any guide bullet sellers must be way way off on volume these days.

BB

[J-Ho]

I've seen rifle bullets I use come down about 10-15%, no not what they used to be, but down a little is better than down none at all.

[larry cazes]

When demand drops, so will the prices.

[JimmyZip]

I just picked up 1000 Bear Creek coated 125 LRNs for 45.00. Is that high?

What did you used to pay say three years ago? That is cheaper than I paid for 1000 uncoated 125s last April from Powder Valley. I find that I'm getting better prices now that I have a group of reloaders looking out for me when they are out shopping components. (as I am for them) I get that call every two weeks, "Hey Jimbo, I found some_______ for $_______ Do you want me to pick you up some?" This has helped us all keep our costs down.

JZ

[Jeff686]

Same reason gas prices go up fast, and down slow.

"Opportunity Cost" dictates that prices increase to match the true market value of the raw materials they are made from, regardless of the original purchase price of those materials. Inventory represents a material investment, just like owning gold or stocks. If you own it, and someone is willing to pay for it, why charge less?

"Cost of Sales" dictates that prices don't decrease below the original value of the investment in raw materials plus the cost of financing the inventory. If there is enough demand to keep inventory velocities reasonable, prices fall slowly. Don't sell for a loss if at all possible.

[LPatterson]

Could it be that most bullet makers were not charging their regular profit margin when the prices went so high so quick and are just now starting to get back into the profit column. Some companies kept their prices low but added a lead surcharge, while other companies had small increases but provided free (included) shipping. This may be why some bullet companies like USPS instead of UPS.

Accept the fact that as your income goes up the price of things you want to buy will go up to, except maybe the price of some electronics. I remember 19 cent gasoline when I started driving and my 51 Ford flathead V8 got 21 mile to a gallon & my 2003 Ford Escape 3.0 liter V6 gets 19 MPG.

Comment removed because it was political.

[Rob Boudrie]

Just checked with my preferred bullet supplier.

He's still priced as if lead and copper are still at record highs.

If you are still paying those prices, rather than switching to another vendor, it's proof that it would be a mistake to lower prices. Prices will come down when some major players decide to start taking market share with price.

[Joe D]

There are a couple of things we can do. The first is to let them know we watch the price of lead. Ask them why they have not dropped their price. The second is to get suppliers to bid on a large bullet order. Get your friends to go in with you on an order. It is not hard to get a 100,000 bullet order together.

Let them know they are bidding against other suppliers. I start out with 4-5 suppliers then narrow it down to two. I let the other two or three know they did not make the final two due to their high cost. Next let the last two know you have narrowed the bidding down to two. At this point you can determine who really wants the order.

I then go back and tell the other four that they were way too high. "Way too high" is subjective. Let them determine in their own mind what that means. Never lie in any of your dealings. Never tell the losers what you actually paid. I usually just tell the losers "You were a good bit higher than the winning bidder". I don't tell them who the winning bidder was - let them guess.

Folks this is just plain old Negotiating 101. I do it everyday at work.

[raz-0]

The REALLY short answer is that bullet prices will fall sometime after the price of loaded ammo does, and not a moment before.

Part of the issue with copper is that the current rise and fall is basically cyclical. None of the guys who produce the cheaper bullets we tend to use in bulk is buying in quantities large enough to be buyign commodities direct (from what I have been lead to understand). Which basically means that when, if ever, they can capitalize on the cyclical dips is unkown. They have been stuck paying distributors basically the prices of the peaks rather than the troughs. Copper has been peaking (not absolute highs) roughly every 90 days. Rifle bullets for accurate loads are much more likely to be from companies doig largge volume buys, and some of them have come down a bit.

As for lead, that plummeted and has been off it's high for quite a bit. I have no idea why that has not been reflected in prices.

As for the supply and demand curve, our decrease in consumption is beign offset by much more casual shooters being driven into reloading by loaded ammo prices. Our decreased consumption won't be felt much until that tapers off. Of course a shooting war helps drive up component demand by driving up the demand for loaded ammo too. We really haven't made a dent in demand by altering our shooting habits, and probably won't be able to for a while.

Of course, we may just be screwed due to the fact there isn't all that much competition in the component market. The price leaders are precision bullets and precision-delta, and they have more business than they can handle. Why lower prices if your customer base outstrips your ability to suppy a product. There is absolutely no incentive to lower until someone else does.

Once again, rifle bullet prices are more susceptible to market pressures here because smaller quantities are consumed, and more demand is met through retail outlets than direct from manufacturers. They feel the pressure of unsold inventory being marked down because they can't sell what they thought they would at the marked up prices.

[zhunter]

You can either wait for the bullet companies to vie for YOUR business, or you can take charge and force them to drop prices.

How do I mean "force them to drop prices"?

Easy, pick a brand, as a large group, for instance EVERYONE in the BENOVERSE, I mean everyone only uses ONE BRAND. The other brands would be forced to lower prices to regain our business.

Call it what you want, solidarity, collusion, pick the label that suits you, but it would/does work.

I have NO dog in the fight as to which brand is chosen, best to be done/decided via PM or e-mail, but it would only take a matter of 4-6 weeks, as the vendors to the shooting community would feel it quickly!!!

OK, I told you how to do it, it is up to you.

[Huston in Austin]

One thing to remember about spot prices on metals, the foundry may have several hundred thousand pounds of metal in stock at a higher price than the current spot price and they are not going to loose money to match the spot price. Also unless you are dealing directly with MG or Zero, the vendor may have purchased the bullet at a higher price and they are not going to loose money either. They bullet side of the lead market is a very small part of the overall market, Car batteries are a much larger segment, and the ammo factories are much bigger than the reloading segment. If metal prices stay low, then our prices will fall. It will just take a while.

[dillon]

The prices on the Oregon Trail lead bullets we sell just went down. Compare the September and October catalogs.

Hopefully this means the most expensive lead is off the shelves.

[el pres]

You can either wait for the bullet companies to vie for YOUR business, or you can take charge and force them to drop prices.

How do I mean "force them to drop prices"?

Easy, pick a brand, as a large group, for instance EVERYONE in the BENOVERSE, I mean everyone only uses ONE BRAND. The other brands would be forced to lower prices to regain our business.

Call it what you want, solidarity, collusion, pick the label that suits you, but it would/does work.

I have NO dog in the fight as to which brand is chosen, best to be done/decided via PM or e-mail, but it would only take a matter of 4-6 weeks, as the vendors to the shooting community would feel it quickly!!!

OK, I told you how to do it, it is up to you.

This is just what I was thinking !! As long as we keep buying them the price "cant" go down much, it's business 101.

If your moving product you dont lower the price. I was thinking since competetive shooters probably buy more bullets

then anyone what if we did'nt buy "any" at all !! It's the off season anyway and I know we all have a stock !! Pass is on to

the cowboys as well...

Ahh, probably wont work since someone will get gready and buy up all the 180's since they will finally be in stock !!

[SRT Driver]

One thing to remember about spot prices on metals, the foundry may have several hundred thousand pounds of metal in stock at a higher price than the current spot price and they are not going to loose money to match the spot price. Also unless you are dealing directly with MG or Zero, the vendor may have purchased the bullet at a higher price and they are not going to loose money either. They bullet side of the lead market is a very small part of the overall market, Car batteries are a much larger segment, and the ammo factories are much bigger than the reloading segment. If metal prices stay low, then our prices will fall. It will just take a while.

+1 on this. If the supplier bought materials at the high they probably will leave their prices at the same level until stock is gone or sales drop off. If nobody buys from them, they will have to drop prices to move inventory.

Time is the answer.

[BlackBuzzard]

Not to keep beating a dead-horse issue, but.....

Copper is now down to $1.80/lb from an all time high of $4.00/lb - a 55% delcine.

Lead is now down to $0.52/lb from and all time high of around $1.50/lb - a 65% decline.

Ammo/bullet makers are now in the "sweet spot" of dramatically lower raw material prices, and record high prices in place for finished goods - hoping that their customer base just accepts current situation or wont notice.

Lets see how this all plays out.

You can check metal prices at kitcometals.com.

BB

[Rob Boudrie]

Read up on the economic concept of "sticky prices".

[Graham Smith]

Most retail prices are based on a model that I like to call the "highest price" model. That is, the price that the seller paid for the materials or the price the seller has to pay to replace the materials, whichever is greater - that is the base price. The base price is then augmented by all operating costs (based on the same model) plus profit plus the "whatever the market will bear" markup.

That's why it costs $1 for a penny candy.

[Rob Boudrie]

Sticky prices are a different concept - once all vendors in an industry raise prices, the new price structures remain even if the cost basis driving the increase lowers and all high priced inventory has made it through the system. Prices go down only if one of the vendors decides to undercut the others to gain market share.

People understand that when it's time to sell their house "what they paid for it" is irrelevant, and the only issue is "how much will a capable buyer be willing to pay". For some reason, those same people expect vendors selling to them to operate by a different set of rules.

In terms of economic theory, it's not overpriced if you are willing to pay it.

[raz-0]

You folks do know that pretty much all bullet makers buy their metals from a distributor, whose inventory isn't priced by the up to the minute commodity market prices, but rather what they paid for the metals when they laid in stock.

There's some lag time, with the potential to completley fail to benefit from price dips.

Go look at the copper chart. It has pritty much dioppedna dn then risen to alocal peak every 90 days. That's when people actually restock inventory for the quarter. To most bullet makers, those valleys probably don't even really exists in terms of materials costs.

Granted the peaks have been getting gradually lower and lower, but it remains to be see if these low prices hold.

[Thomas Moore]

It has pritty much dioppedna dn then risen to alocal peak every 90 days.

were you drinking when you typed this?

[larry cazes]

Sticky prices are a different concept - once all vendors in an industry raise prices, the new price structures remain even if the cost basis driving the increase lowers and all high priced inventory has made it through the system. Prices go down only if one of the vendors decides to undercut the others to gain market share.

People understand that when it's time to sell their house "what they paid for it" is irrelevant, and the only issue is "how much will a capable buyer be willing to pay". For some reason, those same people expect vendors selling to them to operate by a different set of rules.

In terms of economic theory, it's not overpriced if you are willing to pay it.

Yup. Simple supply and demand.

[raz-0]

It has pritty much dioppedna dn then risen to alocal peak every 90 days.

were you drinking when you typed this?

No being interrupted and lost my home row while typing most likely.

Should be "It has pretty much dropped and then risen to a local peak every 90 days."