Component costs

[LRHWAL]

This is not intended to upset anyone, it's just a question and something my shooting buddies and I have chatted about quite a bit recently. I thought I'd open it up for some opinions as we can't explain this. If I've already missed something on this then I'm sorry, but I haven't seen anything.

The costs of componments sky rocketed as commodity and raw materials prices rallied over the past 24 months. Since the turnaround in those markets around mid last year prices on components like bullets and brass (cases) dont' seem to have come lower at all.

I figured maybe inventories purchased at the higher prices were part of the reason, but 6 months later I'm thinking these would be run down and lower prices would start showing on retail prices. So far, clearly I'm wrong.

So, what gives? Am I wrong regarding raw materials costs? Can we expect lower prices within the next few months?

Anyone with an inside edge on this care to comment?

WL

 

[trueblue]

I would say it is the business concept of supply and demand. The demand for reloading components is high, and the supply or availabilty is low, so the cost remains high for these components. I don't think comodity prices have as much influence on component costs as demand for their products.

 

[britz]

I don't have an "inside" angle, but from what I have heard from distributers is supply and demand. Production companies are hit just like everyone else with the econonmy and sales are high partly due to the new president. Small rifle primers are very hard to come by due to the amount the military is using still as well as 223 brass. There is also a major increase in price of AR's now too. I saw an AR10 for sale the other day with a $500 or better mark up. Just makes me sick.

 

[comfisherman]

I noticed a slight decrease in certain bullets from spring until the gun rush in november. Now it seems anyone who can price gouge will price gouge. Our local dealer (whom I now refuse to support) honestly just crossed out the current price with a marker and marked everything up. You could hold the tickets up to the light and read the pre-election price.

Places Like the shooters pro shop are still on the level with fair prices. Our local department store has kept their prices legitimate. Another gun store a few miles away had primers in stock so I made the journey to check them out and they had small rifle primers for exactly double what I payed for a box in december.

I ended up buying a brick from our local wal-mart for a dollar over what Bi-mart usually stocks them for. I really try to buy local, but I am almost positive I am done with that.

I don't think we will see a price decrease even though the raw material has gone down significantly as well as the price of the energy reqiured. There is just to much demand for prices to go down.

 

[ejones338]

Well if it is supply and demand we should see a change soon, because there has definately been a run on all components. I went to one of the local stores yesterday and they pretty much only had shotgun reloading supplies left on the shelf. Otherwise the shelves were bare. I expect it to be this way for awhile. If our pres. does pass his 500% tax increase on all shooting related items, like he talked about during the election, then we might not ever see these" low low" prices again. Sickening.

 

[Boss Hoss]

Doubt we will ever see the price of components go down---example Sierra has sold out of 2009 production! So don't hold your breath until they do you will just turn blue and pass out lol!

 

[LRHWAL]

Not being American (I live in South Africa) I suspect we underestimated the impact of the political change. Despite what I'd read about the planned changes (infringements), I'd forgotten about components and focussed more on the impact on firearms and high cap mags etc.

We'd been led to believe that the military demand and commodity prices were fuelling prices; maybe these factors were just replaced by something else. It always seems strange that taxing certain sports succeeds and is unchallenged (not that this is a plan unique to the US - we have "ad valorem" tax - like a once off tax on all firearm imports). Imagine taxing golf clubs and golf balls 500%!? Anyhow, wrong forum for that rant....

I know here local manufacturers price basically on a par with the imported product - not because it's necessary, but because they can. But then profit is what drives business.

I suppose time will tell.

Thanks for the replies.

 

[boomtube]

"The costs of componments sky rocketed as commodity and raw materials prices rallied over the past 24 months. Since the turnaround in those markets around mid last year prices on components like bullets and brass (cases) dont' seem to have come lower at all."

None of the makers send me any notes explaining themselves but I know something about how the market works.

Retail prices are determined by three factors, the cost of production, distrubution AND the price we the people are willing to pay at the retail level. The greatest influence on the possible PROFIT is what the market will pay, meaning WE set the selling value ourselves. So long as hoarders grab everyting in sight when a delivery is received, the retails have no reason to reduce the price. When the horders are sated and quit paying, the prices WILL come down but not before.

IF Sierra is sold out for this year that price is fixed for this year and they won't be reducing their prices this year. How much WE pay depends on how badly the distributers AND the retailers wish to move Sierras.

I am reluctant to acuse the retailers of "gouging" at the current elavated prices. Consider this, IF they sold short supply items for "low" cost all it would do is encourage even more hoarding. At this point, lower prices would see components fly off the shelves even faster and it's unlikely the rest of us would benefit at all! In fact, it seems the current "high" prices are an aid to us getting anything at all!

We will simply have to wait until the hoarder mind-set is full, then normal market forces will come into play. Prices will eventually begin to slide back down towards the "normal" profit levels for producers, distrubuters and retailers. That's just the way a free market works. That is, unless our benevolent "gobbermint" comes in to save some parts and distorts the whole process, raising the costs to everyone involved.