Ammo Contracts???

[spartakis252]

I've been reading a lot of threads on many forums discussing many "conspiracy theories" of how .gov is either buying up all the ammo or ATF is restricting imported ammo or .gov is sending all our surplus over seas for destruction....the list is endless and sometimes seems crazy. But all the reading of how the .gov is gonna take away all the ammo got me wondering about how that could be prevented.(other than political hopes)

My main question with this is can a civilian or corporation enter into a contract with an ammo manufacturer? Let's say we have a group of people that want to buy 450 million rounds would a company such as Winchester sign into something like that. I can see how this could be financially difficult for an individual which is why I mention corporations.

If you see where I'm attempting to go with this, what are your thoughts?

[Remington788]

My main question with this is can a civilian or corporation enter into a contract with an ammo manufacturer? Let's say we have a group of people that want to buy 450 million rounds would a company such as Winchester sign into something like that. I can see how this could be financially difficult for an individual which is why I mention corporations.

A contract for 450mm rounds might be unusual, but I can imagine a larger range getting a contract with an ammo manufacturer to lock in prices.

I bet that Dick's has a large supply contract with Federal for those target load shotgun shells that come in red/white/blue and pink. Same with Cabelas or Bass Pro, Gander Mtn. A chain store like that requires a pretty stable supply that they can count on.

Can you imagine how many boxes of 9mm and 380 get sold through Wally World? Sam Walton didnt make his money by buying at wholesale. He negotiated lower prices.

[spartakis252]

I should clarify, maybe should have used different wording, what I'm talking about is basically a group buy of epic proportions.
Walmart, Dicks, GM they all negotiate pricing with manufactures with profit in mind.
For the average joe getting good ammo at great pricing is profit enough. Usually the best way to do that is go straight to the source, no middle man just looking at profit margins. I don't see any major manufactures selling to the average joe but will sign a contract with a government agency(which is where I got the 450 million from). And I'm sure their pricing was much cheaper than whole sale.

[mbinpa]

I am not sure exactly where you are going with this but I suspect it would be a better idea if a group of corporations (or maybe the NRA) would just open a manufacturing facility. At that volume, plus whatever more ammo that is sold on the open market, one thinks it can turn a profit. I don't think ammo manufacturing (especially if not going for the extreme self defense bullets) is that technically demanding.

[spartakis252]

What I am getting at is why are we paying Walmart to negotiate for us?

For example(and I don't know the profit margins or rounds per year so this isn't accurate)
Walmart has a bulk pack of Federal 9mm 115gr. $19.99/100 rds(for ease of math $.2/1 rd) However since Walmart has to make a profit, lets say they are only paying $.17/1 rd. So the box of 100 cost them $17 and they sell it for $20(15% mark up) they are making money. Now lets say Walmart gets that price because they buy 5 million rounds per year. (again this is a made up example I don't know what the actual numbers are)(If you arn't following along with a calculator, in this example, Walmart pays $850,000 for 5 million rds sells them and makes $150,000 profit)
So lets say a person(or group) goes to Federal and says they want to buy 10million rds. At that quantity, Federal agrees to $.16/1 rd. Now being as this person or group isn't interested in profit but rather price, they can now get a box of 100 rds for $16.
Now lets assume this individual(or group) decides well we don't really need all this ammo, guess we are gonna have to sell it. Now being as their motivation wasn't profit they can sell 100 rds for $16. Who are you buying from?

I know this may seem unrealistic since people are greedy and everyone is out to make money but it seems like a good idea to me. (Or at least it would be if I had an extra $1,600,000)

[IronSight]

What I am getting at is why are we paying Walmart to negotiate for us?

Well, most millionaires without any distribution channels, shipping contracts, or storefronts aren't going to drop a million or more on something that they don't have the infrastructure to store or sell when they have no base of buyers to recover costs from.

Storing, distributing, and selling ammo costs more than just the base price per round. Without any infrastructure any multi-millionaire trying to spread the ammo around nationwide will end up having to charge more than Walmart just to break even on shipping and distribution alone.

ETA: You can't ignore self-interest in any decision on cost versus benefit. Even if you could store, distribute, and sell millions of rounds of ammunition for cheaper than Walmart you would have to rely on charity work from others to keep costs down. What are those people working for? A savings of one or two cents per round at a cost of many hours of their own time. No thanks, while right now my time is valued by my employer at a disgustingly low and insulting rate it is still a rate far higher than what I would earn in savings to be a part of a charitable ammo buy. Ultimately self-interest decisions are exactly why what you propose, a focus on at-cost selling, just doesn't work.

[spartakis252]

Well, most millionaires without any distribution channels, shipping contracts, or storefronts aren't going to drop a million or more on something that they don't have the infrastructure to store or sell when they have no base of buyers to recover costs from.

Storing, distributing, and selling ammo costs more than just the base price per round. Without any infrastructure any multi-millionaire trying to spread the ammo around nationwide will end up having to charge more than Walmart just to break even on shipping and distribution alone.

ETA: You can't ignore self-interest in any decision on cost versus benefit. Even if you could store, distribute, and sell millions of rounds of ammunition for cheaper than Walmart you would have to rely on charity work from others to keep costs down. What are those people working for? A savings of one or two cents per round at a cost of many hours of their own time. No thanks, while right now my time is valued by my employer at a disgustingly low and insulting rate it is still a rate far higher than what I would earn in savings to be a part of a charitable ammo buy. Ultimately self-interest decisions are exactly why what you propose, a focus on at-cost selling, just doesn't work.

I fully understand what you are saying, but you took this to a scale beyond what I was thinking. I never even gave national distribution a thought. I guess my example implied otherwise. When I was thinking about this it was more of a group of people working together to get better prices by eliminating the middle man. The sales base would be the group of people who have a common end goal. Lets say you buy 1000 rds a year, you'd pay $200 at Walmart. Or if there was a group of people buying together you could pay $160. And with your "disgustingly low and insulting rate it is still a rate"(and I'm quoting you on that) I'll bet that extra $40 could go a long way. Your already gonna buy it, why not try to get it as cheap as possible.

In all honesty my real question was whether or not a group of regular citizens could actually get a contract price structure from a major manufacturer?

And yes I understand that people need jobs and supporting local shops is a good thing for the economy. I just don't like the fact that some government agency, or walmart, can walk in to a place and say hey this is what I'm buying and this is the price I want. If they can do it why can't I?

[semperfi]

In all honesty my real question was whether or not a group of regular citizens could actually get a contract price structure from a major manufacturer?

And yes I understand that people need jobs and supporting local shops is a good thing for the economy. I just don't like the fact that some government agency, or walmart, can walk in to a place and say hey this is what I'm buying and this is the price I want. If they can do it why can't I?

I do not believe that (insert ammo manufacturer) would deal with an individual, or group of individuals, unless there was a corporation or non-profit backing them up. There are too many state and federal laws and taxes that both parties are responsible for. The reason Walmart can and you can't is because Walmart is guaranteeing the manufacturer that they will buy a certain large number of rounds each month, quarter, or year. You, on the other hand cannot guarantee them the volume they need to keep the line moving and people working.

Your question is intriguing, and I'm trying to figure out if your issue is with the profit margin that you have to pay when you buy ammo, or a scenario where all of the corporations that currently sell ammunition collude with the government and stop selling to the general public. To put it more crudely, is your issue with price or access? They are not one in the same.

I'm pretty confident that a group backed by an LLC or LLP would be able to sign a contract for 450 million rounds with an ammo manufacturer. Problem is, logistics would be a nightmare. As mentioned earlier by IronSight, you would need to have massive storage and distribution channels in place, not to mention a team collecting money from all the "average Joe's" buying the ammo. Ever tried to collect money from co-workers? Imagine that times at least 100,000.

Having said that, I'm also pretty confident that the same manufacturer would not get involved with a smaller buy-say 100,000 rounds. Even in the slim chance they would, the price would probably be twice what you would pay at Walmart. I agree with mbinpa that a better route would be be to open a manufacturing facility with the idea of keeping prices low on ammunition. You'd need that 450 million contract though, especially with the government not buying from you.

Have you considered reloading? It has benefits to both price and access, and would be less work than organizing a 450 million round buy.

[mbinpa]

I am willing to bet you can get it a lot cheaper if you want to source it from overseas. The Chinese would be willing to brand label 5,000,000 rounds of ammo for anyone with the cash.

[Palerider]

In all honesty my real question was whether or not a group of regular citizens could actually get a contract price structure from a major manufacturer?

And yes I understand that people need jobs and supporting local shops is a good thing for the economy. I just don't like the fact that some government agency, or walmart, can walk in to a place and say hey this is what I'm buying and this is the price I want. If they can do it why can't I?

Sure you can. Assuming you put a number in front of them that means something. A few thousand rounds a year is probably seconds of production time. Not reason enough to even respond to your purchasing inquiry.

Walmart can meet with them and say here's the price I want. The ammo co. can choose to accept it, decline it, or negotiate a more agreeable one. And the ammo co. will meet with Wlamart and other distributers because of volume they can move. Plain and simple.

But at the end of the day, I bet the ammo suppliers go to Walmart to get their product on the shelves, not the other way around.