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Lately, on the ammunition front, it seems that there’s a new scapegoat on the message forums: Ammo Hoarders.  These folks are apparently some kind of distributed Bond villain; they’re insidious and diabolical, buying all of the ammo that comes out just so that they can not shoot it and so that you can’t have it.

It’s supply and demand – but supply was never very large

The supply of ammunition out there isn’t like McDonalds food – unless they begin to convey super-powers, cheeseburgers will not suddenly see a 5x-20x spike in demand after an unpredictable incident such as a school shooting.  And even if there were such a spike, McDonalds could probably handle it readily because they’re flipping huge.  Ammunition manufacturers, on the other hand, aren’t really as big as they would seem – a lot of their capacity is pre-purchased by the government, and contractually can’t be used to produce civilian ammunition when they have outstanding government procurement orders.  So, the available capacity for ammunition production is only the headspace between government orders and maximum capacity.

That having been said, under normal circumstances, the rate of ammunition capacity suffices.  Components are produced at one place, then assembled into completed rounds (either by the manufacturer, or by an 06 FFL purchasing the components).  There are several links in the supply chain which must change in response to demand spikes, such as the one caused by the laws proposed in the wake of the Newtown shootings.  But because it’s a long-ish chain, fraught with costly investment in new facilities and machines, it’s a chain which only really grows in response to a radical demand spike such as this one.

I mentioned that the current supply chain is adequate for most normal circumstances.  Well, as you may have noticed, these are not normal circumstances.  Most gun owners are casual owners, who own a gun or two for protection and don’t actually bother to keep spare ammunition on hand.  They’ll have a couple of loaded magazines for their home defense guns, and whenever they go shooting they’ll stop at the store to buy ammo.  A lot of these guys are the ones complaining about “hoarders” right now.  The thing is, hoarders are over-reported.  Ask yourself this: These guys probably outnumber normal shooters by 50:1 or so.  What happens when half of them, at the same time, suddenly decide that it’s a good idea to keep a couple hundred rounds ‘just in case’?  Well, the stores get stripped bare, which then makes everyone go, “OH CRAP, there’s no ammo!  I need to buy more so that I’ll have some!”  There’s no stopping this particular snowball once it’s started; you simply have to let it play out.  Eventually, all the Joe Sixpacks will have a few hundred rounds of ammo lying around, and they’ll go back to being content.

Defining an Ammunition Hoarder

Through the course of this post, I intend to slap some sense into the people castigating “ammo hoarders”.  But first, let’s draw some definitions.  The proper definition of the verb ‘hoard’ is:

to accumulate for preservation, future use, etc., in a hidden or carefully guarded place: to hoard food during a shortage.

Technically speaking, you could argue that any ammunition purchase is a hoard, unless you’re buying it at the shooting range and burning it that day.  But that’s not much of a real definition.  We need to draw a line somewhere though, right?  Well, just like defining obscenity, “I’ll know it when I see it” just isn’t good enough.  We should also carve an exception case:

Preparedness isn’t hoarding: If you take your Second Amendment responsibilities carefully, then a thousand rounds apiece of your primary rifle and pistol caliber, shouldn’t be considered excessive by any gun guy’s definition.  A lot of us would say 10,000 isn’t excessive, if you have the space to store it.  And still others would… ok, well, somewhere in there we cross the blurry line and become a hoarder probably.

Ok, then let’s define an ammo hoarder as the guy who buys and stores way more ammunition than he will ever use.  He buys it and stores it, and pretty much never sells it – if he does, it’s years or decades later.  So, does this sound reasonable?  This is what “hoarder” is defined as, for purposes of this post.

Now, here’s one little catch: A flipper isn’t a hoarder.  No, a flipper (which I described in the last Gouging post) is a different beast who cares only about making money, and he’s not storing it.  I’m firmly against flippers, and I think most people are confusing flippers with hoarders.  The hoarder is probably not going to Wal-Mart to buy ammo, then reselling it on Calguns for a profit.  His goal is to have ammo.  And eventually he has enough, because his wife will set a limit on how many bedrooms he can convert to ammo storage.  Wait, no, uh, that never happens, all wives are fine with this.  By the way dear, if you’re reading this… about that spare bedroom…

Seriously though, if you’re complaining about hoarders right now, consider that…

Real Hoarders Aren’t Buying Right Now

I’ve known real ammo hoarders, and the guy who angers you buying the last five boxes of 45ACP at Wal-Mart isn’t one of them.  A real hoarder is always looking to add more to his stash, but unless he’s brand-new, he wouldn’t pay current market prices for it.  Real hoarders right now are waiting out the storm, and they’ll snatch ammunition by the caseload once the market corrects itself.

Secondly, a new ammo hoarder is on the same playing field that you are.  The difference between you and him is that he fantasizes about having 10,000 rounds of ammunition, or possibly more, sitting there just in the event of social collapse or a nasty new law, or what have you.  He’s not going to settle for fighting you over 50rd and 100rd boxes; ammo stores much better in case lots than it does in individual boxes.  And in the end, this doesn’t matter.

Because we don’t have too much demand – we have too little supply

Seriously, there are folks proposing that everyone should stop buying ammo until the prices go down.  Even if everyone were to agree to this (and you shouldn’t want them to), it’s the wrong thing for the industry, for preparedness, and (in the long run) for ammo prices.  New manufacturers enter the field because there’s money to be made in it, and right now there’s so much demand that it’s producing new manufacturers under every rock.  Companies which produce primers are probably upgrading their production capacity, with the costs subsidized by current primer prices.  In the long run, for our ammunition supply once the panic dies down, this is awesome.  When we have more available production capacity, prices will probably be lower once the demand spike dies off, and the next panic won’t hit as hard either.

Another benefit is that this shortage is pushing more people to start reloading, which is even better for both the Second Amendment and for prices in general.  And even if you aren’t a reloader, this is good for you because even fewer people will be competing with you for your overpriced factory ammo!

Where things are going with this

The classic laws of supply and demand mean that the more demand there is, the higher prices go.  The higher prices go, the more new companies will choose to enter the marketplace and compete, and the more the existing companies can afford upgrade their production capacity.  When the price of ammunition goes through the roof, it pulls up production capacity, and once the demand spike is gone, the supply remains elevated and the prices dip down below where they used to be (for a while; they tend to level back out in the long run).

Anyway, the price correction after this craze will be the right time to buy, because prices will be at lows which you haven’t seen for a while.  And when that does happen, you should buy thousands of rounds!  But wait, that would make you a hoarder, wouldn’t it?  Well, actually yes – and that’s just fine.

Those who know me refer to me as the “black hole of guns”, because I never sell them.  This is partly because I have the luxury of not needing to sell them to make rent or whatever, but it’s mostly because I try to live without regrets.  In the gun field, the only regrets I have are the nagging itches of deals that I passed up.  And the regret of passing up a deal (like the $700 SVT-40 in ’04 or so), often fades into insignificance once you manage to actually get an identical gun later on, while there are lots of 60 year old guys wishing they hadn’t been young and dumb and sold a gun they loved back in their 20s.

A lot of “I should sell this” thoughts are impulse thoughts based upon mood, and likely to produce regrets.  Generally speaking, if you wait a week or a month, you’ll lose the desire to sell the gun you’re thinking of selling.

I shall summarize below some of the bad reasons people sell guns.  I am picking random guns here, but it applies to anything.  Fundamentally, it all boils down to one thing: whatever drew you to this gun once, will draw you to it again once you no longer have one.  And whatever reasons you had to dispose of it are likely not to seem so valid in retrospect when you miss the gun you sold.

I own an X D, but I want to sell it so I can buy a Glock.  Once I own the Glock, the X D won’t get used at all.  Notice the problems with this?  For one thing, the shooter doesn’t already own the Glock.  He doesn’t really know that he won’t use the X D at all yet.  There’s an excellent chance the guy will buy his Glock, shoot it for a while, then wish he’d kept the X D because the Glock’s grip angle bugs him, or he starts thinking back fondly on the X D’s sights, etc.  By the time you realize you gave up something you wish you hadn’t, your X D is long gone.  The time to decide you don’t need your X D anymore is after it’s had time to gather dust because you’re shooting your Glock now.  Never sell a gun to buy a gun.

I’ve got a collection of rare Finnish Mosins, but I’ll never get that last elusive one to complete the collection, so I may as well sell the rest.  Wouldn’t it suck to have that rare, elusive one finally dangled in front of you, and then you realize you don’t own the rest of that collection anymore?  Because that’s what’s likely to happen to you once you toss out your collection.  Also, if your collection is that close to completion, it’s still worth being proud of it, even if you can’t get that final holy grail.

My wife says a house with kids shouldn’t have any guns in it, at least when they’re young.  Yeah, and she’ll conveniently think that when they’re older, too.  To many women, guns are a “bad habit” to break you of, like smoking, and kids are the trump card which gives her her way in all areas.  This also can happen the other way around (anti-gun husbands), but much less frequently.  This drama plays out in California households time after time; the minute kids enter the picture, the wife moves from passively anti-gun to actively demanding a gun-free house.  As a counterpoint, kids in the South grow up around unlocked, loaded guns all the time without killing themselves.  Stand up to your spouse – you might agree to lock them in a safe, or in extreme cases perhaps store them with your family, but never just capitulate and dispose of them all.  I’ve never once met a man who did that and didn’t bitterly hold it against his wife years later.  Separate drama from reality.  Assess risks rationally – and if you’re not presently married, then refuse to date or marry someone incapable of rational risk assessment in this field.  As an aside, you do have to pick your battles.  My wife can’t rationally assess the risk factor of centipedes, but she’s fine with the guns, so that’s just fine.

I read some reviews, and they say the Remington 700P is better than my Savage 10FP, so I’m gonna sell the Savage and buy the 700P.  While reviews can be useful, they’re unavoidably biased towards the writer’s preferences.  Additionally, some but not all are further biased by the possibility that if you give a glowing review, you may get to keep it.  But it ultimately comes down to the fact that while the gun may be better on paper, or for the reviewer, it may not be the best gun for you.  Find out by buying the new gun and then deciding if the old one still has a place in your arsenal.  If the new one is the one that lost out, then either keep both or sell the new one.

I only have a gun safe that holds X guns, so I have to sell one if I want another.  Unless the gun you’re selling is literally one you never use,and you’ve had little use for it ever since you bought it, this is a bad idea.  A better idea is buying a new safe.  Or, like me, convert one of your bedrooms into a dedicated armory for your guns.

So, it all comes down to this:

  • Regretting a sold gun, sucks.
  • Selling a gun to “upgrade”, and figuring out later it’s a downgrade, sucks.
  • If someone else telling you to sell your guns, you’re likely to resent that person later on.  Don’t give in unless the government requires it.

Sneak preview of the next post: I might cover some of the things we gun guys would like to see in future laws.

As most know, I happen to be grammaton76, a moderator on Calguns.net.  This places me in a unique position to observe the in’s and out’s of the secondhand gun marketplace.

You may have read my previous rant, on how “gouging” isn’t gouging.  This may come as a surprise to you, but: I’m fine with what people call “gouging”, and a large part of it is because I hate gun board flippers with a blind-hearted passion.  But freedom demands that they be tolerated, and so I do.  Any attempt to infringe upon them will also infringe upon others, and there’s no way around it.

I define a gun board flipper as the person who buys something on a board with no intention of keeping it, solely because it’s a good deal and he buys it solely so that he can quickly sell it to someone else for full market value or higher.  A flipper is not the guy who bought a gun for himself years ago, then realizes it’s worth a bunch of money now and resells it.  And a hoarder (which seems to be another category of folks disliked on boards) is not a flipper.  If you’re buying thousands of rounds of ammunition to store so that you can sit in your bunker in the event of a catastrophe… fine with me; you’d make a good neighbor if things went bad.

I despise flippers because they deprive the eventual end user of a deal, they ensure that the original seller gets pennies on the dollar, and they laugh obnoxiously all the way to the bank.  Like electric arcs between contacts with big potential differences, flippers appear like magic whenever there’s a big difference between the price you are asking, and the price they know they can get from someone else.  I really want to see people offer their items at close to market price so that the sellers are reaping the profits, and the items go to the actual intended users of the items, and no flippers are involved in the process.

Let me summarize my feelings:

  • If you’re a gun board flipper, I think you’re scum.
  • If you enable flippers by underpricing out of some sense of “honor”, you’re naive and you’re the reason flippers are so prevalent.

Now that that little bit is over, I will discuss recent occurrences in the Calguns marketplace.  No names will be named, but folks may recognize their own stories here, and I do not give one flip how that makes them feel.

Our society is nominally free – people are free to buy or not at whatever price they wish, and they are also free to sell or not at whatever price they wish.  Calguns, and other gun forums, are just another example.

Of course, like in any gun panic, there’ve been some people who felt bad about the current pricing, and have wanted to help out fellow shooters.  In two instances within the last 30 days, there were guys who, instead of asking the current market price of their items, offered them openly at more or less the “old” going price.  This was a noble gesture, and their items sold fast, as you might expect.  The buyers thanked the sellers profusely for the deals, talked about how they were going to keep it for their collection, etc.

Two weeks later, the buyers re-posted the items in the for-sale forum, for current market price.  The buyers were flippers, out to make a buck off of the sellers’ misguided senses of nobility.

See what happened there?  Two guys offered “noble” pricing, the flippers took the deal, lied about how it was going to be for their own collections, and flipped the items as soon as they had them.  In one case it was a gun so the guy waited two weeks for it to get out of DROS, but in the other case it was ammo.  Now an actual end user, the person who should’ve gotten a good deal to begin with, will still end up paying the full market price (or higher), but the profits all go to the flipper, and the seller will get none of it.

There is nothing in the forum rules against this, because any such rule would be unenforceable.  The flippers in question DID make the jerk move of listing it on Calguns again though, in full view of the original sellers, which adds insult to injury.

“Wait”, you might say, “clearly, not everyone is that inconsiderate!”  Actually, you’re right.  Because most flippers are considerate enough to sell it on Gunbroker or other forums so that you don’t find out about it, and they can get a shot at the next gun you sell cheap.

Seriously, this is what happens when you list your stuff below market value to help people: you only encourage flippers, and the actual buyer of your item is still paying market price or higher.  How do you stop these guys?  Raise your prices.  Ask fair current market value, or just enough below it that it’s not tempting to a flipper.  The guy with the rifle saw a quick $300 profit, and he seized it.  Had the original seller priced it closer to market price, the flipper wouldn’t have seen enough profit in the deal to make it worthwhile, and it probably would’ve gone to an actual user.

This is why I don’t give people deals, and I don’t perform free services for people anymore.  Back when Romanian parts kits were $80 apiece and NDS-3 receivers cost $55, I helped a guy build several Romanian AK’s for free, with my tools at my place.  Months later, he bragged to me how he got $1200+ apiece for these guns which he swore we were building “for his collection”.  I never got paid a penny for the wear on my tools, or the several weekends I spent helping him build those.  The minute I changed my policy to demanding $100/build for the use of my tools and my assistance on building AK’s, he bought his own tools and started building his own guns on his own time.  It’s amazing how that works.  Same thing goes for asking close enough to market price, that the flippers won’t want to bother.

Here’s the Sean Newton guide to fighting flippers:

  1. Be a “gouger”, not a victim.  In the for-sale forum of any board, you have only two choices in this market: be a “gouger”, or be the guy pouring money into the pockets of the flippers.  It is much better to be the former than the latter.
  2. Trades are an excellent alternative to asking more than you feel is right.  If you’re offering a gun for its old retail price, and a guy exchanges equivalent ammo with you at the old retail price for that ammo, then you’re at a fair exchange no matter which way you compute the numbers.
  3. You can’t herd cats, you can’t regulate the internet, and you can’t expect honor out of your counterparts.  Does your board want to try to combat flippers by implementing a no-flipping rule?  Don’t bother, they’ll just list on another board or on Gunbroker, or Armslist, or another board.  Never accept a gentleman’s agreement with some guy you just met that, that item X is really for his own collection.  An honest man may say it, but a flipper will say the same words.  And check the next point if you think only honest men are trolling your board’s for-sale forum.
  4. Flippers ARE going to see your deal before anyone else.  Who do you think hangs out in the marketplace on gun boards all the time?  Hint: The flippers are constantly trolling for deals, and actual “real” buyers check once or twice a day – if that. Statistically speaking, anything you list at a good price is very likely to go to a flipper.  I’m not the highest-ranked ninja of Perl, but I wrote a system to scan the CGN marketplace for new for-sale threads with certain keywords for a (non-flipper) friend, and the flippers are probably doing the same thing.  Deals are in front of the motivated buyers within minutes, and flippers are some of the most motivated out there.  Never expect that the first person to see your deal won’t be a flipper.
  5. Sell everything with the full expectation that the other guy’s going to try to flip it.  If you asked full market value for your gun, and someone else knows a way to sell it for +50%, then cool – let him do it.  Just don’t sell anything so cheaply that you’re going to feel bad when you see it for sale again two weeks later.
  6. Even if you intend to take less money, list higher.  If you list something at $900, flippers will pass it by or give you a lowball offer around what you actually wanted out of it (say, $600).  Refuse the lowball offer.  Because the guy who shows up to buy it at full market value, say $900, actually does want it for himself.  So if you wanted $600 for your rifle, when he shows up at the shop to do the transfer, give him back $300.  Be aware that he might still flip it, but you’ve actually eliminated probably 95% of the flippers if you only sell to people willing to pay market price.

Preview of a future rant: Over the course of years, I’ve paid attention to all the myriad of reasons people regret selling guns.  Most long-term shooters have several regret stories, and my path to a life without regrets is simple: I just don’t sell my guns.  My friends call me the “black hole of guns”, for good reason.  This will be the subject of a later post, but you should never sell a gun to buy a gun.  Whatever made you want the gun in the first place, is going to make you want it again later on, and the next one you replace it with probably won’t be as good.  Selling a gun to buy a gun is the prime cause of most “I regret selling that” stories I’ve read.

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