From SG Ammo. Edited for readability and some spelling.
by Sam Gabbert
(SGAmmo) – We have seen a massive spike in demand this past 5 days, with double ‘normal’ sales Saturday and Sunday. Then triple normal on Monday, quadruple on Tuesday, and today is way up as well.
When it will slow down is hard to say at this point as demand seems to continue to rise. If order volume continues to overwhelm the warehouse crew’s capacity to fill orders over the next few days we will have to make choices on how we reduce volume, which could involve increasing prices 5% to 15%, limiting selection to cases only, removing popular ammo options that are sold at extremely low profit margins from the website menu, minimum $$ orders, etc, all of which are highly unpopular with segments of out customer base, but necessary to maintain synchronization of warehouse capacity with order volume…
In my course of many conversations with clients, I commonly see that there is wide spread misunderstanding of ‘how it works’ in the ammo business, which is understandable because it takes decades of experience to learn the deeper details, and even then, there are always surprises along the way.
One thing that a lot of people do not know is that the ammunition business is a fear-driven market, not consumption driven. Fear leads to stockpiling and hoarding beyond manufacturing’s capacity, which leads to shortages and price increases. This also strains capacity within the distribution system, and price increases are commonly used to slow down order volume while maintaining profitability.
The masses react to scares of various types, driving demand up quickly, sharply and almost instantly, within minutes to hours of a disaster, swarming ammo suppliers like us with abnormally large order volume. Such is the case this week in reaction to the Israel – Palestine conflict, where sales skyrocketed Saturday morning and remained at double to quadruple ‘normal’ order volume since then. How long this sort of elevation of demand lasts varies and depends greatly on ‘aftershocks’, as in shocking events that drive additional fear in the wake of what happened just before.
It take a series of events to drive the market way up like it was in 2013, or 2020 and 2021, and a single event typically will not do it alone. That said, should a series of shocking events unfold, this could drive the market up in a substantial way.
I have seen people on the gun forums often make fun of the people who ‘panic buy’ the day of the disaster, however in my observations over the years, the people that buy in the first hours or few days of the panic beat the potential price increases and almost always come out ahead of those that wait and buy later in the short term, especially if the market prices are down at the time of the panic like they are these days.