Cheaper Than Dirt CEO Comments on Ammunition Shortage
Wednesday, August 26th, 2009 at 5:06 PMCheaper Than Dirt CEO Michael Tenny Comments on Ammunition Shortage
Cheaper Than Dirt
Fort Worth, TX --(AmmoLand.com)- For approximately the last 12 months, hunters, shooters, and everyone involved with or familiar with the firearms industry has noted a dramatic spike in firearm sales, along with a corresponding rise in ammunition sales. Coinciding with these spikes has been an acute shortage of certain firearms and almost all ammunition. We interviewed Cheaper Than Dirt! CEO Michael Tenny about the shortages to gather some insights on the state of affairs within the ammunition industry.
One thing is immediately clear: the ammunition shortage did indeed begin around the time of the presidential campaign and escalated subsequent election of President Obama. During this time, the industry saw unprecedented volumes of sales in both firearms and ammunition. While the demand has waned to some extent, it still remains significantly higher than in the past.
Tenny commented on the situation saying “With the change in the political landscape, many citizens decided to buy firearms and ammunition before any additional restrictions on ownership or purchasing were enacted. Rumors about increased restriction and taxes on these items drove many to stock up on firearms and ammunition.”
The increased purchasing has centered on high capacity firearms and magazines that had been previously affected by the Assault Weapon Ban. Most of these used the same calibers of ammunition as the military and police.
Tenny had this to say about the shortages of popular calibers of ammunition: “Not only do you have the civilian sales, but law enforcement and the military use many of the same calibers of ammunition. For example, the popular AR-15 rifle uses the same round as the military M16. Many popular handguns use the same 9mm ammunition as the military’s M9 pistol.”
Manufacturers are usually contractually obligated to fulfill military contracts first, leaving the civilian and law enforcement market with whatever is left. They were faced with an increased demand for common calibers from civilians that they could not meet.
Confronted with the fact that manufacturers could not meet the commercial demand, retailers were faced with a dilemma: increase prices to slow down sales, or sell out of the ammunition that they had and have empty shelves and nothing to sell. Not wanting to be faced with ongoing business expenses and no inventory to sell, retailers began scrambling to find ammunition from any source.
Tenny explains it like this: “The increase in demand has many companies similar to Cheaper Than Dirt searching for ammunition to supply their customers, and each is willing to pay more to have stock to sell. This drives the wholesale price up, and the retail customer sees the price increase too. The cost of the components that the manufacturers use to make the ammunition, such as brass, lead, and copper, has also increased.”
So, how long will the shortage last?
Michael Tenny answered “I don’t think demand will slow down to pre-election levels. Ammunition sales have tapered down some from the peak around the election-inauguration period. Manufacturers are working at full capacity around the clock to meet the demand, but no one knows if supply will catch up to the demand any time soon.”
Overall demand for ammunition has risen. Individuals who, prior to the election, did not feel the need to own a gun and practice with it are now new gun owners and add to the base level of ammunition consumption. While stockpiling has slowed, it will take a while for manufacturers to catch up to current levels of consumption.
Tenny explains it thusly: “We’ve seen many first-time firearm owners discover they enjoy shooting, while the avid shooter is purchasing large quantities of ammunition to save money in case of the increased restrictions and taxes. Both are now competing for the same supply along with the military and law enforcement.”
About:
Cheaper Than Dirt! prides itself on being America’s Ultimate Shooting Sports Discounter since 1993. Cheaper Than Dirt boasts over 24,000 items available for purchase through their website and catalog. For most items, Cheaper Than Dirt offers a generous 30 day return policy. For more information, or to place and order, visit www.CheaperThanDirt.com or call 1-800-421-8047. Most orders ship within 3 hours.
