Where are the new primer/powder companies?

[Ucsdryder]

Usually when there is a supply and demand issue, the problem gets solved in our capitalistic world. So why haven’t we seen more ammo/primer/powder companies popping up the last decade? Not a lot of business opportunities pop up where you’re guaranteed to sell 100% of the product you produce.

 

[Ndbowhunter]

Government regulations.

That and the boom-bust cycles will crush anyone leveraged too far

 

[archp625]

As far as powder I thinks it more complicated than that. I believe there are only a few manufacturers that make powder. I believe all are overseas. The companies we see on the side of the container buy from them. I think the import or export is what gets tricky making it hard for new companies to start up.

 

[WCB]

Because it isn't as easy as building ARs....Primers especially and priming compounds are nothing to mess with. There are a handful of truly knowledgeable guys in the primer world and if something goes bad workers die no questions asked. On top of that regulation and very high cost of investment. Same with powders.

You have seen new small ammunition companies come in but that is because they can buy the components from companies that have been doing it for 100 years and have it perfected.

 

[Sean.mcvicker]

I've wondered the same thing. Or at least see these powder companies grow to keep up with the demand

 

[CorbLand]

To much of a boom and bust cycle for companies to be able to effectively scale to demand. By the time they get everything going, demand would decrease and you would have machines sitting.

 

[Ucsdryder]

I don’t know how much bust there is. There are more people buying guns than ever. More shooters than ever. More hunters than ever.

 

[307]

Has the demand really increased, or is there just a short term surge in buying/storing?

If all of the purchased rounds remain unfired, and are eventually placed back into the system, then supply would significantly outpace demand, essentially the opposite side of the pendulum swing from now.

Unless those rounds are being fired...

I'm no economist, but it would be interesting to see what actually creates "demand", buying, or use (in this case firing).

Any experts in non perishable commodities???

 

[307]

I don’t know how much bust there is. There are more people buying guns than ever. More shooters than ever. More hunters than ever.

Are there really?

The constant narrative is that hunter numbers are dwindling significantly.

As far as new gun owners, I'd be surprised if many of them do much shooting at all. Seems like a bit of panic buying followed by firearm and one box of ammunition sitting in a locked storage box indefinitely without being actually used.

 

[CorbLand]

I don’t know how much bust there is. There are more people buying guns than ever. More shooters than ever. More hunters than ever.

Demand right now is high but it will level back out.

Its like masks, would it have been worth opening an entire factory in April to start making masks? No, because by the time you got everything up and going, the businesses already running will have increased supply to meet demand.

Short term it looks great but you have to look long term and weigh in the investment to scale up.

 

[Axlrod]

Usually when there is a supply and demand issue, the problem gets solved in our capitalistic world. So why haven’t we seen more ammo/primer/powder companies popping up the last decade? Not a lot of business opportunities pop up where you’re guaranteed to sell 100% of the product you produce.

Well nothing is guaranteed to sell. A year ago a gun shop here ran all loading supplies and tools 20% off 2 weeks in each Nov/Dec/Jan due to slow sales and overstock.
Read on the financial pages this week Exxon is looking to dump thousands of employees and borrow money to pay their dividend.

 

[5MilesBack]

I used to do some horse trading with a buddy that's pretty high up at one of the gun manufacturers. After Trump got elected, they had built such a supply for a Hillary win that they have been overstocked this whole time until now. He said he couldn't afford to do much anymore as their bonuses had dried up due to that over-supply and lack of demand. It's definitely a hit or miss industry.

 

[WCB]

I don’t know how much bust there is. There are more people buying guns than ever. More shooters than ever. More hunters than ever.

Look at the reporting of some major ammunition factories after the last election. Hundreds and hundreds of layoffs. A few big distributors also went out of business because they over extended themselves and purchased warehouses full of ammunition. Almost over night demand went away and they couldn't give it away.

This is the same thing people don't get when they ask "why don't the manufacturers build more?" obviously if you are guaranteed to sell it you should build it but once you are maxed out on capacity cost benefit comes into play. And knowing that literally tomorrow, all the orders that are not out the door on a truck could disappear and you won't have increase capacity for months or around a year is a tough decision.

An article just came out saying Vista Outdoor (Federal, CCI/SPEER, and now Remington although I'm not sure they are included in this number) are $1billion behind in orders. You know how much of that is guaranteed? Almost none they are just orders.

 

[archp625]

Because it isn't as easy as building ARs....Primers especially and priming compounds are nothing to mess with. There are a handful of truly knowledgeable guys in the primer world and if something goes bad workers die no questions asked. On top of that regulation and very high cost of investment. Same with powders.

You have seen new small ammunition companies come in but that is because they can buy the components from companies that have been doing it for 100 years and have it perfected.

He is right about the primers. The mistake is called pink mist. I believe it happened a Lake City Ammo Plant several years ago. Guy making primers. No body or parts. Just pink mist.