Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Thursday, March 1, 2018

Caliber Selection Part 2 - The Economics of Shooting


There is a quote attributed to Napoleon Bonaparte: “The amateurs discuss tactics: the professionals discuss logistics.” We can quibble about whether Napoleon was a better tactician or logistician (the Russians have very FIRM opinions on that subject), but the fact remains that you do not get to employ tactics until you have taken care of logistics. In part 1 of this series, we did a rough comparison of the physical attributes of several calibers. Here in part 2, we will compare the relative costs, or economics, of caliber selection.

Guns
Depending on your budget, there is something out there for almost anyone. For purposes of this discussion, I will be using pricing information from Grabagun.com which happens to be a gun store in my area and one I have patronized personally. You can do your own pricing research with any online gun retailer such as Bud’s Gun Shop, Kentucky Gun Co., etc., etc. All the online stores will ship a gun to your local FFL where you can pay a small (hopefully…it’s about $25 to $50 in my area) transfer fee to get your gun assuming it complies with local laws. As an added bonus, you don’t pay sales tax on out of state purchases and some online retailers even ship the guns “for free” (TANSTAAFL – you can bet shipping costs are factored into the price you are paying). So, on guns above a certain price level, the FFL transfer fee is actually less than the sales tax if you had purchased locally. In my area, that price point is around $350 (at 8% sales tax = $28 tax).

So, what do guns cost? According to Grabagun.com, the least expensive 9mm semi-auto handgun you can buy right now is a Highpoint that sells for $155. That’s about the same cost as three cartons of cigarettes or a week’s worth of groceries.

On the opposite end of the spectrum is the Dan Wesson Elite Series Havoc “race gun” at $4679 and change. That’s a lot coin, and it’s not even the top of the heap when it comes to cost. Full custom, anything goes, speed is just a question of how much money you want to spend, guns are literally the sky’s the limit. If you want sticker shock, go spend some time on SVI’s website “building” your dream gun. Be prepared to have $5000+ lying around to make it a reality.

That’s not to say quality guns must be ridiculously expensive. The hottest segment of the gun market right now is the polymer semi auto market. This is the part of the market where Glock, Smith & Wesson M&P, Ruger SR, Springfield XD and a host of others live. The price of poker in this segment starts in the low to mid $200 range for a Taurus or Keltec polymer semi auto and to over $800 for a Sig P320 RX equipped with their Romeo1 Red Dot. Smith & Wesson M&P9 2.0s are running right around $399 to $419 with standard 3 dot sights, Gen 4 Glock 19s can be had at $499 (more for the MOS, Gen 5, special finish or night sight equipped versions).

All metal guns are typically a little pricier. 1911s are a great example. Yes, you can get a Tisas or similar foreign made 1911 for under $400. They will not have the same level of build quality or parts as guns even in the $500 to $750 range. Rock Island Armory, Ruger, Taurus and some of the Springfield and Kimber lines live in this price range. It’s a good place to be if you love 1911s but don’t have a kilo buck to spare. These guns are surprisingly well put together and are worth putting money into to make them better. $750 to $1500 is where the 1911 market starts to go from adequate to really good. Colt, Springfield, Kimber, Dan Wesson and several others have excellent choices in this price range. Between $1500 and $2500, this is the semi-custom/high end production end of the market dominated by STI, Les Baer, and a few others.

So, you don’t have to spend a ton to get a great, reliable handgun for self-defense. But, you can if you want to. Shop around. Determine your needs versus wants. Find the best deal and place your money down.

Ammunition
Now that you have your preferred weapon, you have to keep the beast fed. Without ammunition, a gun is just a really awkward club or an expensive paper weight. To stay proficient, you need to practice. Practice means ammunition, and ammunition means money. How much money depends on from where and how much ammo you buy at a time.

Except for the residents of a few restrictive states, most of us can buy ammo online and have it shipped to our homes. The cost of shipping only makes sense if you are buying in bulk. For instance, the shipping price for a 500 round box of .22LR from MidwayUSA.com is $11.74 via UPS Ground to my doorstep. The shipping cost for a 5000 round case is only $20.59. So, in general, it is not cost effective to buy a 50 round box or two here and there and have it shipped to your house. The exception to that rule would be for stuff that’s hard to find in your area such as Underwood Extreme Penetrators.

A word on where to buy ammunition. Walmart is not a bad place to find decent prices on basic plinking ammo. Don’t expect to find a wide variety or every caliber, but they will have a fair selection of the popular calibers such as 9mm, .40S&W, .45ACP, .357 Magnum, etc. Academy has a little wider selection and decent sale prices although their regular prices on some things can be higher. Gun ranges and mom and pop gun stores may/may not have a wider selection, and their prices tend to be higher than the bigger box stores simply because they cannot compete on the same volume level, but deals can still be had and you generally get better service in the bargain especially if you are a regular. For example, the local gun store near my office had a great buy recently on Sellier & Bellot Full Metal Jacket 230 Grain .45 ACP for $13.95 per 50 round box. Considering Winchester White Box for the same load tends to run closer to $20.00 per box in my area, that’s a steal. Shop around, know the general price spread in your area for the ammunition you need, and cultivate a favorite gun shop or two. Buy in bulk online when bonus time rolls around.

Let’s take a look at some examples to illustrate what I am talking about.

Let’s start with the humble .22 LR which is, without a doubt, the best bang for the buck in the shooting sports. On the low end of the quality spectrum, you can buy Remington Golden Bullet 36 grain rounds for between $0.06 and $0.07 per round not including shipping/taxes. A 1400 round bucket from MidwayUSA.com costs $93.99 plus about $12.00 to $15.00 shipping. Total cost to your door: $108.99 ($0.07785/round). The same bullet purchased at Academy in a 525 round box is $28.99 plus tax (8% in my area) for a total of  $31.31 ($0.5964/round). So, in this example, it’s cheaper for me to buy 3 boxes of 525 at Academy than it is to have one bucket shipped from MidwayUSA.

If you are looking a little higher quality like Norman Match 40 gr., you are out of luck at Academy. But, MidwayUSA will send you a 500 round box for $82.99 plus shipping ($0.17/round).

What about the costs of something a little beefier? Let’s look at the relative costs of common centerfire calibers. For purposes of apples to apples comparison, I’ve created tables for Winchester White Box and Federal HST/Hydra Shok rounds priced from MidwayUSA.com not including shipping.

Winchester White Box – MidwayUSA.com
Caliber
Bullet Weight (gr.)
Price / 50
Price / rnd
Price / 500
Price / rnd
9mm
124
$13.99
$0.28
$134.99
$0.27
.357 Mag
110
$33.99
$0.68
$323.99
$0.65
.357 Sig
125
$34.99
$0.70
Not Available
Not Available
.40 S&W
165
$17.99
$0.36
$169.99
$0.34
10mm
165
Not Available
Not Available
Not Available
Not Available
.44 Mag
240
$48.99
$0.98
$459.99
$0.92
.45 ACP
230
$21.49
$0.43
$209.99
$0.34

When it comes to training/plinking ammo, bigger bullets (= more raw materials = higher cost to manufacture) or less popular bullets (= lower demand = lower supply = higher cost) are going to cost you more (if can even find it…sorry 10mm fans). That’s pretty much common sense. A .45ACP case uses more brass than a 9mm case. They also use more powder, larger primers and bigger bullets. Duh. Bigger is better until you have to pay for it. As you can see, .44 Magnum gets a double whammy by being big and less popular. Ditto for .45 Colt. Ditto for .500 S&W. Etc.

Federal HST/Hydra Shok – MidwayUSA.com
Caliber
Bullet Weight (gr.)
Price / 20
Price / rnd
Price / 200
Price / rnd
9mm
124 (HST)
$26.99
$1.35
$249.99
$1.25
.357 Mag
158 (Hydra)
$26.49
$1.33
$639.99 (500 rnds)
$1.28
.357 Sig
125 (HST)
$59.99 (50 rnds)
$1.20
Not Available
Not Available
.40 S&W
180 (HST)
$28.99
$1.45
$269.99
$1.35
10mm
180 (Hydra)
$33.99
$1.70
Not Available
Not Available
.44 Mag
240 (Hydra)
$35.99
$1.80
$885.99 (500 rnds)
$1.77
.45 ACP
230 (HST)
$28.99
$1.45
$269.99
$1.35

It wasn’t possible to do a completely apples to apples comparison with the hollow point rounds since Federal doesn’t load all calibers for HST. I find it interesting that .357 Sig HST actually costed out significantly less than 9mm HST. Otherwise, the general rule of bigger/less popular = greater cost appears to hold true.

Now, let’s take a look at what it will take to shoot/practice/train for a year comparing the cost of 50 rounds / week (2600/year) vs. 100 rounds / month (1200/year) in .22LR, 9mm and .45ACP.

.22LR Rem. Gold. Bullet – 2600 x .07 = $182.00
9mm WWB - 2600 x 0.28 = $728.00
.45ACP WWB – 2600 x 0.43 = $1118.00

.22LR Rem. Gold. Bullet – 1200 x .07 = $84.00
9mm WWB – 1200 x 0.28 = $336.00
.45ACP WWB – 1200 x 0.43 = $516.00

The take away here is that the smart money is on spending most of your training/practice dollars on .22LR ammo to keep fundamentals sharp and incorporate your centerfire practice monthly if possible (quarterly if necessary). A .22LR version of your self defense gun or even a .22LR conversion kit will pay for itself in less than a year in most cases.

Accessories
Owning a firearm for self defense isn’t just a matter of buying a gun and bullets. You are buying a weapon’s system, and you need to treat it as such especially if you plan to carry it. If you expect to carry your heater around with you, you need accessories like holsters, gun rugs/cases, magazine pouches, extra magazines, revolver speed loaders, safes, gun cabinets, cleaning supplies and equipment, etc. All of this stuff costs money and there are varying levels of quality and price all over the map.

Holsters run anywhere from cheap $12 nylon “sausage sack” holsters to $150+ full custom leather holsters that are as much art as functional kit. Here’s a quick pro tip: if this is for your barbeque/church/court gun, money is no object. Get the very best custom leather you can lay your hands on with a matching gun belt. If this is your everyday carry gun, money is no object. Get the very best kydex or leather/kydex holster that fits your body and method of carry. Plan on budgeting between $50 and $100 to get something that works. Last pro tip: don’t skimp on the belt. Get a belt specifically made as a gun belt (they are typically either very thick leather or reinforced leather with kydex or steel cores). Dress belts and fashion belts may look great holding your pants up, but they are not up to the task of securely holding up your pants and 30 to 50 ounces of gun, holster and ammo up where you need it.

For semi-auto pistols, magazines are the Achilles’ Heel of the system. Don’t settle for second best on magazines for any gun to which you plan to trust your life. Take 1911s. Great pistols. The brainchild of (Saint) John Moses Browning (peace be upon him) designed over 100 years ago. Everyone and their dog makes them now. The same is true of the magazines. You can find 1911 mags for less than $15 if your try really hard. They might or might not work when you need them to. The gold standard for 1911 mags (in my humble opinion) is the Wilson Combat 47D. I’ve been in luck in that my local gun shop has been carrying them of late for $25. Other places charge upwards of $33 to $35 for them. Also, beware of “higher than normal” capacity magazines. I tried a Chip McCormick 10 Round Power Mag for my 1911. Reliable as the day is long with 9 rounds in it. Top off the mag with the 10TH round, and it was about as reliable as an Alzheimer’s patient. Factory mags are generally good since they have been designed and tested to work with the gun in question. Last note on magazines, treat them as maintainable but expendable items. Springs wear out over time, followers can get dinged, feed lips can be bent/broken, etc. If you start having problems with a particular magazine, just trash it and buy a new one (unless it’s the only mag you have for your pristine Bren 10 you use in the Sonny Crockett / Miami Vice cosplay outfit).

After the guns themselves, safes, gun cabinets, and/or other secure storage solutions are probably the next biggest single item expense for new bun owners. A fire proof, multiple gun, safe can run from north of $500 to the $1000s of dollars for very high end safes. If you only have one handgun, a fire safe is overkill. Most manufacturers ship their guns with gun locks which will prevent the gun from being fired by people who don’t know how to find and operate a key (like a toddler), but it won’t stop an adult with lock picking skills that wants to take the gun. Lockable pistol safes can be had for reasonable prices, but they also have their limitations. The sad truth is that locks are for honest people and children. There’s plenty of YouTube videos out there of people demonstrating how to breach even the toughest fire safes. It’s just a matter time and tools.

Reloading
Reloading could be an article unto itself. Reloading equipment ranges from $40-$50 for caliber specific Lee Hand Loader kits that allow you to reload one bullet at a time with nothing but your kitchen table and a hammer all the way up to top of the line Dillon Progressive Presses costing close to a kilo buck that allow you to manufacture ammunition at several hundred rounds an hour. In exchange for your time and effort, you can save upwards of 40% on your ammunition costs through reloading after your recoup the initial investment. Truth be told, most reloaders will tell you they don’t save any money as they wind up shooting more. On the plus side, you can tune loads to your specific needs whether it be “light loads” for new shooters or hot “hunting” loads or anything in between. If you decide to dip your toes into the reloading pond, budget somewhere in the $200 to $300 as a minimum for a quality single stage press, caliber specific dies, and other equipment.


I'll wrap this up here by saying this is an expensive hobby, but there are deals to be had if you are patient and know where to look.

Tuesday, April 23, 2013

Ammo Shortage - An Example By The Numbers

Okay, I know some out there really hate the new math especially when it translates into a 50 round box of Winchester White Box 230 grain .45ACP going for 40 of my hard earned dollars, and I know many of us would like to blame the evil government like any good conspiracy theorist would. We can blame the government INDIRECTLY all we want. BUT, let's take a step back an look at some real numbers for a second.

According to the May 2013 issue of American Rifleman (that'd be the NRA's membership magazine for those of you who are not NRA members), somewhere between 1 billion and 1.5 billion rounds of .22 long rifle ammunition is produced by all manufactures ANNUALLY. That's up to 1,500,000,000 .22 pills of all sizes and flavors from my personal favorite CCI Stingers to your cheap, dud infested, big box store, bulk pack stuff made to supply the whim and demand of every man, woman and child over a 365 day span of time. And, last I checked, the goobermint wasn't sending out orders for .22 bullets by the ship load.

So, assuming for the moment that the smallest size box you can buy is a 50 round box of formerly cheap fun in a gun, that's 30,000,000 (30 million for those getting tired of seeing zeros like I am) boxes of .22 caliber satisfaction hitting the streets every year.

But, wait, that amount of ammo doesn't hit the street all at once. There's twelve (12) months in a year. 30 million divided by 12 is 2,500,000 boxes hitting the streets a month on average. If we assume that there are an average of 30 days in each month, we get that narrowed down to 83,333.33 50 round boxes of ammo arriving on store shelves somewhere every day (setting aside the fact that deliveries don't happen every day).

And where is all that ammo going? Well, the USA is a big place. There are literally millions of gun owners spread across 50 states clamouring for a piece of that action every day. I know that reality is different, but let's assume that the 83,333.33 boxes a day gets spread equally among the states. That leaves us with 1666.66 boxes per state per day.

What's the likelihood that you're going to be one of the lucky ones to snap up a box or two on any given day when every other Cletus in town is waiting at the gun stores doors on delivery day with cash in hand? Um, yeah. Not good. Do those per purchase limits make a little more sense now?

What does all this mean? That's an excellent question. I'm glad you asked. I don't know much, but I do understand basic economics.

Ammunition manufacturers and their suppliers are and have been working at or near capacity according to every report I've gotten a hand on including perusing some of their websites. That means that supply is pretty well maxed out; or, at the very least, it's as good as it's going to get for the near future. That leaves us with two options: increase supply or lower demand.

As long as the current resident at 1600 Pennsylvania is in office, lower demand is unlikely for the foreseeable future. Maybe ever. As long as there are gun banning politicians clamouring to relieve us of our Constitional rights, people are going to be stockpiling ammo. Truth be told, I don't blame them. If I had the extra cash in my budget, I'd be stockpiling too. Which makes me part of the problem.

On the other side of the coin, supply is harder to predict. For the near term, we can expect it to be relatively constant. In order for there to be an increase in supply at this point, one or more manufactures would have to invest in additional facilities, equipment and the manpower to staff the production line as well as getting their raw material suppliers to ramp up too. The likelihood of those stars aligning comes down to a cold, hard, cost/benefit/profit/loss calculation. If a company foresees that investing the necessary capital to increase production by adding another plant will yield a net profit over a period of time that makes sense to them, it will happen. If not, don't count on it. 

Don't ask me to figure out what that magic profit/loss number is...I don't have enough information to figure it out. For example, if you assume those 30 million boxes sell for an average of $8.00 a box (don't quibble with me about prices for match ammo...this is an example), that's $240,000,000 ($240 million) in gross retail sales. A guesstimated SWAG of the manufactures net profit out of that would be 10% or $24 million. Split that among however many ammo manufactures there are based on market share, and the picture gets even bleaker for the chances of a new ammo factory sprouting from the earth anytime soon.

Now, go ask your buddy who's bragging about his 1000 round score to sit back and let the rest of us have a shot.