22LR Ammo Market at a Tipping Point

USA – -(Ammoland.com)- As a commercial ammunition reloader, I cannot, unfortunately, manufacture 22Lr ammo (obviously).

However I do get nonstop calls from people in my area looking for the all-popular cartridge, so I try to keep my finger on the pulse of the market and snag some up when I can find it, then resell it at a reasonable, not-gouged price.

One would think that I would be able to pick up .22 more easily than the retail purchaser, but this hasn’t been the case for me for the last several years. I’ve had just as hard of a time picking it up as most.

Today I did another customary search for in stock .22 ammo from my standard suppliers, and something odd happened.

They were in stock. And not just one or two brands, they had a LOT in stock! Certainly the most I’ve seen since the 22 shortage began.

Like most happy tales, this one has a caveat. While they had a number of brands in stock, they were all of the premium brands and cartridges (Eley, Norma Tac, etc.). The prices aren’t great, they aren’t even good as far as plinking ammo is concerned, but they were relatively in line with what one would expect for ultra-premium 22 ammo ( https://goo.gl/YIQ5b9 ) prior to the shortage. They ranged from 8 to 20 cents a round, but this is with a dealer discount.

For your average Joe, still waiting to spend 4-5 cents a round, this might not seem significant, and maybe it isn’t, but I think it is.

Here’s why:

1. The pricing I’ve seen from my distributors for brick-pack premium .22, around 8-12 cents/round, is roughly in line with what I’ve been seeing at gun shows recently in Arizona for non-premium ammo. Add in a profit margin for the business selling premium stuff to customers on the one side, and add in the $8-$10 cost for gun show entrance on the other side, and this pretty much evens out. Most customers, when faced with buying from a gouger at a gun show for common ammunition, or buying premium ammunition from a local business (who might be able to stock it regularly now) for roughly the same price, will opt for the Premium Ammunition.
2. This shifting of demand away from gun-show price gougers will force them to drop their prices (which I’ve been observing in my area). If this continues, their profit margins will become too slim for it to be worthwhile and they’ll cease their operation, which will help eliminate the artificially driven price increases.
3. It makes sense for a .22 manufacturer to stabilize their supply on premium brands prior to tackling their common brands. Not only do you get greater profit margins, but the lower demand will make it easier to stabilize. Once supply and demand has stabilized there, it is easier to transfer resources to stabilizing mid-level brands, and then rinse and repeat for common plinking ammo.
4. This shows that the panic-driven demand for 22 ammunition is tapering off. A year ago I couldn’t find any .22 ammunition at all, not even the Eley I’m-Training-For-The-Olympics priced rounds. The fact that these are available, regardless of their high-end pricing, shows that the demand and the panic are both waning.
5. The laws of supply and demand are, at times, self-fulfilling prophecy. If we begin to see a shortage, we as consumers panic, buy everything we can, and make the shortage worse. Conversely, when we begin to see product on the shelves regularly, we’ll no longer feel like we have to stock up, and demand drops. As we see more and more brands becoming regularly available, starting with the high-priced and moving towards the low, demand will weaken and it’ll help the situation even more.

What all of this boils down to is this: I think we’ve hit a tipping point in the .22 market. Now that we are beginning to see high-end brands in stock, I think the rest of the obstacles standing between us and cheap 22 ammo (price-gougers, panic-driven demand, scarcity-driven demand, etc.) will begin to topple like dominoes.

If you want to help speed up the process, I would recommend spending a few extra dollars on the better .22 ammunition at your local gun store rather than supporting the gun show price gouger. Their prices (should) reflect the actual demand for a superior product, and buying from them will limit the ability of the gouger to artificially inflate the price of his product.

Sincerely,
Andrew Scott
A&A Ammunition, CEO

Andrew Scott is the Founder and CEO of A&A Ammunition, an ammunition manufacturing and sales company located in Tucson, AZ that specializes in reloading high quality training ammo. He is also a Veteran currently serving in the Arizona Air National Guard, and has previously worked in numerous industries ranging from food prep to stock trading.

For more of his writings, visit the A&A Ammunition website at www.TrainHardAmmo.com/blog