Primer supply

[glenwolde]

The OP, H Richard, raises some excellent points.
Where is the mark-up going?
Looking at a primer and knowing what goes into it, I don't see 8 cents a piece. So, it's likely not the raw materials. It's likely not the manufacturing or tooling. After all, there are a few hardcore guys who've figured out how to reuse the cup and anvil and make their own.
So, that leaves wholesaling and distribution, and retail.
Keep in mind, without the big box stores or a few national online vendors, where would you buy primers? Here in SC, I can't name a one single proprietor of independent ownership that stocks (or even cares a hoot for) reloading supplies. It's virtually all plastic pistols and ARs, $1/round factory ammo, plus accessories (again, more plastic).
Great Outdoors LLC owns Bass Pro, Cabela's, and Sportsman's Warehouse. That's a big chunk of the retail market in the hands of one guy. (This is a privately owned business that is not publicly traded.)
Vista Outdoor owns Remington, CCI, Speer, RCBS, and a few others. They are publicly traded. Their stock price is over $40/share. Less than five years ago, their stock price was a third of that value. Yet, think of the shortages and consumer frustration. Ask yourself, if you are a business owner, how your stock price triples for doing a lousy job of meeting market demands.
The only thing that comes to mind is drastically limiting competition and jacking up prices.

Maybe I'm missing something?

You're missing that the objective is not to always meet demand, it's profitability. Sometimes those align, sometimes they can't.

The concept that you can make more money producing less is false. Many have tried, all have failed. Manufacturers have relatively high fixed costs in plants and equipment. As your production goes down your costs go up as a percentage of sales.

If your costs for a plant are a million dollars and you produce one widget that widget cost a million dollars. If you produce 100,000 widgets they only cost $10 each. If you produce a million widgets they only cost $1 each. There's a sweet spot in manufacturing where you cover your high fixed costs and after that there is a rapidly accelerating amount of profit from each unit that falls to the bottom line.

It's the same high fixed costs that prevents them from producing more. They view this as a relatively short term spike in demand. In manufacturing a couple or three years is short term as it would likely take them that long to permit and build a new plant. The manufacturers are more worried about demand collapsing and going back to normal. They don't want to end up with a brand new primer plant that has insufficient demand to keep it busy enough to cover the fixed costs. That would be a career-ending move.

The manufacturers have been through this before and have access to a lot of market data we don't. If a new plant is justified they will build it. If they don't somebody else will.

If the market stays like this foreign product will show up, assuming the shipping backlog clears. Their market has different dynamics than the U.S. market and they should be able to fill some gaps. If the demand stays plants will be built. The market will work as it should over time.

I'm in the "this will end" camp. But it could stay tight for another year. $40-$45 would probably be a good guess at future pricing. You see a case for $200, buy it. I've burned almost 8,000 of my inventory since this started which is right on forecast. I can make it three more years. The only adjustment I have to make is I need to shoot more big bore stuff. I'm overweight on LPP vs SPP. When I restock I need to account for the fact that I shoot more SPP than LPP than I thought.

I like to keep a five year supply of primers and powder on hand if possible to cover these market dislocations. That doesn't really take up much room. Bullets are a different story. Too heavy to keep five years worth, plus it's not necessary unless you're really particular. I can cast my own if I have too but usually if you keep six months you can back-order cast bullets and get them in that time frame. Or you can trade primers for them. This time around they haven't been that hard to get. They were at first but by the latter part of last year they were showing up available here and there or were back-ordered 2-3 months.

Look how things have improved. 9mm's back at reasonable prices, if not as low as before. Primers are around more than before and while still priced high, not as high as at one point. Lee Loader kits aren't going for $125 anymore. It'll get better. Just have to wait it out. But I will admit that if I didn't have inventory I'd be pretty damn agitated.

I was lucky with the Sandy Hook shortage. I had stocked up a month before because I was shooting more and saw some good pricing on bulk purchases. Wasn't wisdom. Just luck, and timing. I had bought in bulk before but had been rather haphazard about it. I didn't balance my primer/powder inventory or consider how much I needed of what.

But it taught me a lesson. If you really want to keep shooting keep at least a five year supply because these shortages seem to happen all too frequently.

 

[filmmaster]

With the exception of a VERY few, Gun Shop owners I encounter are ruthless scumbags, that hurt our interests. They'll price gouge at ANY given opportunity, and lay a line of BS on every poor, potential gun buyer that walks through their door.

alot operate on that principle. The one shop that stopped dealingin reloading supplies this year, had a little habit that they would order up a case of 4 boxes of speer swagged swc, and charge the case price for EACH box...

 

[Green Frog]

I have a batch of old stock rifle primers in the basement. Come June I plan to use some of them as incentives to get shooters to my Schuetzen event. With the prices on just bout everything at prohibitive levels, perhaps a deal on cheap primers will entice a few more shooters who are waffling on whether to come or not. We'll see how primer market is doing by then.

Froggie