PDA

View Full Version : How little will you pay for ammo?



jeep45238
03-10-2010, 08:10 AM
Yes, this is a serious question.

I've got some investors, some tooling, some time, insurance quotes, and capital - just looking for a place to rent in an area whose zoning won't interfere.

I'm looking at starting my 06 FFL, which is to for the production and sale of ammunition. I'm more than aware that I won't be able to compete with Winchester White Box of Federal ammunition in regards to FMJ standard pressure ammunition. Thus, I need to work on a corner of the market, and the market which I think has a large demand right now is low recoil practice ammunition.

This would also be if interest to competitive shooters who do not reload, since there will be less recoil, your time between shots will be less. The benefit to those practicing for self defense would be trigger and recoil management skills, which can be refined using low recoil ammunition, and verified with full house loads. This is where I'm asking you if you would be willing to buy ammunition online, and what you believe would be a fair price to pay. Without this information, I can't really look into if it's feasable to go through with this idea all the way.

Keep in mind that I need to cover rent, insurance, ITAR, powder, primers, tooling, raw materials if using cast bullets, brass casings, federal excise tax, capital gains taxes, and long term have enough of a profit margin to re-invest in the company in the form of faster production, while still being able to feed and clothe myself.

I can foreseeably supply 600,000 cartridges per year at a minimum without automating any of my process, and would need to sell at least 500,000 cartridges per year.


The ammunition I make is done with cleaned, polished, and inspected range pickup ammunition. I get a vast majority of my .40 and 9mm brass from police ranges, so it's all once fired. Powder is varied by caliber, and the charge is selected to minimize muzzle flash while pursuing accuracy and low recoil. The proper charge is weighed at random intervals, and there is a mechanical locking system that will halt production if the powder charge is to little or to great.

I cast my own bullets, and the ammunition loaded with cast bullets is cheaper than FMJ bullets by a fair margin, and thus will save the end user money. Since we're going for cheaper ammunition that's reliable and accurate, I'm in the talks with Rainer bullets about bulk orders of over 50,000 bullets per caliber/weight/type.

Rainer is from the shooter's standpoint full metal jacket - it's simply a copper plated lead bullet, that uses less copper, so it's cheaper from a reloading standpoint. This ammunition would be more expensive, but has the benefit of having a large factory giving supply.


My plan to offer accurate ammunition that's garanteed to cycle a cleaned/oiled gun is simple. The first order of ammunition would essentially be a test group, a box of 50 with 5 different powder levels in it. The end user will test each one and ideally choose the one that has the best mixture of reliability, accuracy, and recoil for that gun. Each charge will have it's own part number, which will allow the end user to easily order the same ammunition specification, which is important if they own multiple guns in the same caliber and wish to tailor a load to each gun (such as a .45ACP revolver, 5" .45ACP 1911, and a PM45).

Dimensions will be kept within blueprinted dimensions for that caliber. However, I am willing to create a customized loading for your gun if you send me the barrel and magazine, which will allow me to check for proper cartridge length for the barrel, crimp, and that it will fully load and unload from a magazine. The cylinder will be necessary for revolvers, as well as the end user slugging a cleaned lightly oiled barrel and sending that slug with the cylinder. Parts will be returned along with the ammunition, and a personalized serial number issued for each possible combination. This will incur an extra one time fee of $70, and all ammunition would be sold $1 per box above standard offerings. To help keep the brass supply, I would be willing to give credit towards ammunition for all returned brass.




So, what would you be willing to pay per box for custom made, low recoil target/practice ammo in your given guns?

recoilguy
03-10-2010, 08:24 AM
Very interesting concept. I do load my own right now. but sometimes I fall behind in getting more made then I shoot.

I would pay a fair price however for a good round. I know what it costs to load and I know what it costs to buy in the Walmart and also at the LGS. I personally buy very little at Walmart because I like having a Local Gun Store that stays in business. I would pay between the cost to reload and the LGS price consistantly when I need shells. I probably only buy 500 rounds per year because I do reload a lot. I would not be a big volume customer.

The offer to customize bullets to my gun is interesting. I wish you luck in your venture. America is a great country.

RCG

jeep45238
03-10-2010, 08:30 AM
Thanks for the feedback.



I would pay a fair price however for a good round.


However, everybody's fair price seems to be different - as the manufacturer, I'd like to think that $50,000 a cartridge is fair and people would buy all of them (just kidding :D). In all seriousness though, if you could toss out a caliber and a price/box of 50 you'd be happy to pay prior to cheap shipping, that would be awesome :)

Vinikahr
03-10-2010, 08:37 AM
I want to wish you the best in your business venture.
I would reverse the question to: How high are you willing to pay for (bulk) ammo?

jeep45238
03-10-2010, 08:42 AM
I want to wish you the best in your business venture.
I would reverse the question to: How high are you willing to pay for (bulk) ammo?


Well below market value - I reload because I can't afford off-the-shelf, or bulk, ammunition. I do have the time to trade to make the ammunition that I shoot though. Others have little time, have spare money, or price their time away from work above what a box of ammunition takes from them, regardless cost savings.

There are some that don't reload for various reasons - others can't keep up their supply if they do reload due to component/time prices.

Everybody is different in what they will pay for a given product - and thus, I'd like to get input on what people would pay prior to shipping, and evaluate how many rounds per year at said pricing I need to sell per month.

If I price it at $15/box for .40 or .45, and (theoretically, let's just pretend here to prove a point) people are not willing to pay those prices due to the comparative cost of Wolf ammo, then I make $0 in sales, and then loose the business. If I price at $10/box, I may make $400 a month sales, which won't cover FFL/ITAR/insurance, let alone rent.

Vinikahr
03-10-2010, 09:01 AM
Well below market value - I reload because I can't afford off-the-shelf, or bulk, ammunition. I do have the time to trade to make the ammunition that I shoot though. Others have little time, have spare money, or price their time away from work above what a box of ammunition takes from them, regardless cost savings.

There are some that don't reload for various reasons - others can't keep up their supply if they do reload due to component/time prices.

Everybody is different in what they will pay for a given product - and thus, I'd like to get input on what people would pay prior to shipping, and evaluate how many rounds per year at said pricing I need to sell per month.

If I price it at $15/box for .40 or .45, and (theoretically, let's just pretend here to prove a point) people are not willing to pay those prices due to the comparative cost of Wolf ammo, then I make $0 in sales, and then loose the business. If I price at $10/box, I may make $400 a month sales, which won't cover FFL/ITAR/insurance, let alone rent.

The supply and demand will always determine the prices for goods and services(of course the substitute products in those categories as well). The majority of start up companies will not see any profits for the first 5 years(always there is an exception to the rule), if you are lucky and break even in those 5 years then you are in the road for profitability. I am el cheapo, likes deals, do not spend over my means etc... And I do mean from my heart that you are successful will your intended niche, that way you can finally join the NRA!:boink:

jeep45238
03-10-2010, 09:03 AM
Oh, I know it'll be a long hard start - and that the consumer rules pricing, inventory movement, etc..

Just trying to get a better feel for what people feel would be a fair deal.

I'll get to the NRA - but with $56 to last me though next Friday, it'll wait. Hopefully this second job happens for me.

hsart
03-10-2010, 09:37 AM
If you can provide a custom product that is clean and performs as well as the American-made competition then you would really have a business there. I think most would prefer yours then, over any or most of the foreign-made cheap stuff. I think that word-of-mouth and the viral-type communication on the net could be enough to help yo survive the first year. Well placed reviews of the performance comparisons of your product also a must. Personally, I would contact all of the firearms training sites in the US, like Frontsight, etc., who use massive amounts of ammo. If you could contract with them for a finite number each year then you will be successful as you can then concentrate on controlling all aspects of your business.. First though you need a business plan that would insure their supply (and your profitability). These training sites are for profit, so if you could offer a regular, quality supply, I am sure they would talk to you about it.

PETE14
03-10-2010, 09:50 AM
If I price it at $15/box for .40 or .45,

I bought a box of .40 cal 180g. FMJ at Wally World for $13.75 last week. Hard to beat those prices.

jeep45238
03-10-2010, 10:14 AM
I bought a box of .40 cal 180g. FMJ at Wally World for $13.75 last week. Hard to beat those prices.

Wally world around here never has ammo - 22LR is hard to find even. Even then, they haven't had .40 for under $16 for a long time - hell, Wolf is more expensive than $13 a box. Also, as stated, I was pulling a randomized number out of my head - pricing is nowhere near set in stone until I have contracts with component suppliers.

Like I stated from the get go, I can not compete with Big Brand ammunition on prices. If all you care about is price, then this is not for you. If you're interested in low recoiling ammunition that cycles your gun, is available, and burns clean, for a good price (and customized to the gun if you want) without the upfront cost of reloading - then this is for you.

recoilguy
03-10-2010, 11:02 AM
Wally world isn't an ammo store in my opinion it is however a store that carries ammo......from time to time, in various quantities and at a price that makes a lot of folks wait them out as opposed to buying from a LGS. 10 bucks for a box of Fedral 9mm limit 6 boxes at our local store. They get 9 mm 1 time each monthe and get 2000 rounds. Guys I shoot with wait until walmart gets shells in and will not pay 15-18 bucks at the LGS who has inventory and knowlege. They miss the shipment and go to the LGS and complain that they missed Walmarts bullet shipment.........I am glad it isn't my store hwen that happens.

If the bullets are good and cycle through my gun, if the are consistant and clean, 14 to 15 bucks for a box of 9mm is the top I will pay for something reloaded. When I reload I can cost average 15 dollar ammo into my inventory and still beat the 10 bucks for federal at WalMart.

Like i said upfront I would not be a big customer because I do alot of this myself or with my buddy, but will help a guy get some sales if he takes the inititive and has a good product.

RCG

jeep45238
03-10-2010, 01:57 PM
Just to give an idea of how clean some of these loads burn.

250 rounds (5 boxes worth) of 135 grain .40 S&W JHP Rainer bullets

Kahr T40, polygonal barrel

10 minute soak of Hoppe's Elite Foaming Bore Cleaner.

1 pass, 2 patches to clear out the cleaner:
http://i151.photobucket.com/albums/s127/jeep45238/Range%20Time/Reloading/Photo53.jpg

2nd pass, 3 dry patches immediately following above:
http://i151.photobucket.com/albums/s127/jeep45238/Range%20Time/Reloading/Photo54.jpg

10 minute soak in Slip2000 applied by a loose fitting jag

2nd pass of 3 patches after the Slip2000 soaking:
http://i151.photobucket.com/albums/s127/jeep45238/Range%20Time/Reloading/Photo55.jpg


No powder flakes found anywhere in the detail strip cleaning. There was excessive muzzle flash from this, so the end of the slide had some powder residue, but it was the most accurate, and I honestly don't mind some powder residue. Group measured approximately 1 inch at 10 yards, unsupported slow fire.

Waiting on 175 grain cast SWC's to show up right now to develop a smoother shooting load.