Federal ammunition subscriptions

[peterb]

I was thinking about the business model of ammunition subscriptions, and the pros/cons of being locked into a price. Had a thought about an alternative for folks who would want more flexibility but didn’t want to spend a lot of time looking for the best deal every month. It’d be an ammo broker who would do the looking for you.

Say you could choose a caliber, a quantity, a delivery interval, a maximum price, and specify a list of acceptable manufacturers and load types. The service might use an Ammoseek-type crawler plus other information to find the best deal at the time that met your criteria, and would have it shipped to you for the listed price plus a small markup for the service. Someone clever could probably automate most of it.

[Lester Polfus]

This "subscription" fails the financial literacy test. I'm gonna copy/pasta a lightly edited conversation I had with a friend via IM.

"

You are committing to buying 3000 rounds of 9mm ammo for $1680 with a $300 kill fee.

Which works out to .56 a round. Historically that is a really high price for 9mm, and even right now not a great price. You can get GeCo, S&B etc for less than that.

If the price of 9mm goes over .56 a round in the next year, you win. If it goes under that, you lose.

I am not going to bite.

I think it is an interesting business decision on Federal’s part, and if the prevailing price of US made bulk 9mm goes significantly under .56 a round they will have some pissed off customers.


Long term fixed price contracts for consumer goods are usually heavily weighted in the favor of the seller and are a poor financial choice.

I am seeing blazer brass for .33 a round not including shipping. If you want 3k of bulk US ammo you can spend $990 on blazer. I dont know how much shipping would be but I am guessing not $700."


Bottom line up front: If you want 3K of bulk USA made 9mm training ammo, there are much cheaper ways to do it. Federal is taking advantage of the fact that the human brain doesn't feel like spending $140 a month for a year is the same thing as spending $1680. I'm not a fan of using credit cards, but if somebody had to choose between just buying 3K rounds of Blazer brass and putting it on a credit card, and paying Federal every month, they would come out ahead using the fantastic plastic.

[Borderland]

That's a new twist.

One of those home delivery systems that has made Amazon and a local produce company a lot of money.

Maybe the uncertain times. Not discounting any of it. USPS delivers packages to my rural address on Sunday.

I thought USPS only delivered 6 days a week but apparently I'm wrong.

It may be a new consumer mind set that I can't get my head around. But then that happens almost daily now.

[GJM]

Here is their latest earnings call transcript -- they are killing it on ammo margins.

https://www.fool.com/earnings/call-t...gs-call-trans/

[Borderland]

Vista outdoor has a substantial share of the ammo and ammo components market. Powder, brass, bullet and primer production is their game. When a company controls that much they may be able to control a substantial part of how much of the product gets to market. Kind of like OPEC.

[Borderland]

Remington is operational again...

I think Vista Outdoor owns Remington ammo now. One less competitor.

today announced the successful closing of the acquisition of certain assets related to Remington Outdoor Company's ammunition and accessories businesses, and related intellectual property for a gross purchase price of $81.4 million.

https://www.prnewswire.com/news-rele...301150906.html

[paherne]

Here is their latest earnings call transcript -- they are killing it on ammo margins.

https://www.fool.com/earnings/call-t...gs-call-trans/

Vista is telling institutional customers 12-16 months on training 5.56mm. To say that I am not happy with them is an understatement. I won't be in this business much longer, but folks will remember their douchery. PD contracts will always be there when this ammo panic calms down. Fat, weird bald guy with no personality CEO might want to remember this, but I doubt it.

[Borderland]

Vista is telling institutional customers 12-16 months on training 5.56mm. To say that I am not happy with them is an understatement. I won't be in this business much longer, but folks will remember their douchery. PD contracts will always be there when this ammo panic calms down. Fat, weird bald guy with no personality CEO might want to remember this, but I doubt it.

You have to wait 12-16 months for ammo? I'll bet the military gets their contracts filled promptly.

[WobblyPossum]

You have to wait 12-16 months for ammo? I'll bet the military gets their contracts filled promptly.

The military generally gets their ammo from lake city. They don’t need to buy ammo from civilian lines.

[TGS]

Vista is telling institutional customers 12-16 months on training 5.56mm. To say that I am not happy with them is an understatement. I won't be in this business much longer, but folks will remember their douchery. PD contracts will always be there when this ammo panic calms down. Fat, weird bald guy with no personality CEO might want to remember this, but I doubt it.

Damned if you do, damned if you don't. If they dedicated their production line to filling agency contracts they'd have even more backlash from the commercial market for being "boot lickers", and the public has a longer memory than a bunch of agency procurement weenies who literally won't give a shit since they understand it's just the way the market is right now.

You have to wait 12-16 months for ammo? I'll bet the military gets their contracts filled promptly.

The military generally gets their ammo from lake city. They don’t need to buy ammo from civilian lines.

And, during covid, the military's production lines were not immune anyway.

The USMC's transition of the recon community from the Colt M45A1 to 9mm SIG M18s was delayed due to an inability to get enough 9mm to complete pre-deployment workups.

Everyone is biting into the shit sandwich. Right now nobody is getting all the ammo they want, when they want it at the price they want it....regardless if they're an agency or commercial customer.