Friday, May 17, 2013

There Is A Lesson For Cheaper Than Dirt Here.

We are all very aware that there has been an ammo shortage in this country for several months now.

Mostly, when you can find it, the prices have gone up some. On the other hand, there are some places who have gone off the deep end and are charging outrageous prices for short term profits.
I'm looking at you Cheaper Than Dirt.

I have seen .22LR shells advertised there for as much as $24.99 for 50 lousy little shells.
Last year, that same little box of shells was about $3.00.

Here is an article by by Marianne McCune I found at NPR someone should be paying attention to.

Sales of guns and ammunition rose after President Obama took office in 2008, and they went through the roof starting late last year, when a school shooting led to a push for new gun control measures. That's led to a prolonged ammunition shortage, even with manufacturers running at full capacity.
A gun owner in Florida told me he has had a hard time finding .380 ammo for a small handgun for the past six months. Customers at Bob's Little Sport Shop in southern New Jersey told me it's hard to find ammo for some rifles and for the popular 9 mm. Even .22 rounds, the small ones, have been hard to come by.
An economics textbook would say this shouldn't happen. It would say that Bob Viden, who has run the shop for almost 50 years, should respond to the increase in demand by raising prices. And some stores and online sellers have done just that. But, Viden told me, "We don't want to do that. We want to be fair."

Apparently so do some of the best-known ammo sources across the country. At the sporting goods store Cabela's and at Wal-Mart, shelves are empty but prices are mostly flat. During my conversations at Bob's Little Sport Shop, the word "fair" came up about two-dozen times. Or, as one customer put it, "There's no reason to make a profit off of our misfortune."
To a traditional economist, a shortage is evidence prices are too low. But Viden predicts if he raises his prices, his customers won't come back because they'll think he ripped them off.
"Traditional economic theory doesn't really have room for fairness perceptions," Margaret Campbell, a marketing professor at the University of Colorado, Boulder, told me. But about 30 years ago, she says, "people started noticing that there were these kind of quirks."
In a famous study, the Nobel Laureate Daniel Kahneman and two colleagues found that people's ideas of fairness are so strong that, even if it makes short-term sense to raise prices during a shortage, many retailers don't. Campbell says that's because when prices go up, consumers actually care about the reason behind the increase — the retailer's motive.
"If a consumer sees a price go up in an unexpected fashion, they want to know, 'Why? Why has it gone up?' " she says.
There are lots of reasons consumers approve of (if the price the store is paying for the goods has increased, for example). But research has consistently shown that a sudden increase in demand is not one of them. So rather than raise prices, Bob's Little Sport Shop and other stores are rationing ammo in order to keep their customers' loyalty.
There is at least one place where classical market forces seem to be in effect here: Some people have been buying ammo at low cost and selling it at a higher price online. Essentially, they're scalping bullets. Scalpers don't care about return customers. And their customers don't expect them to be fair.

Someone at CTD should take notice of this.
People in general have a long memory when it comes to getting screwed over.
I sure as fuck do.
Rationing can be a pain in the ass but it is, after all, a way to insure that no one entity is walking out with all the goodies at everyone else's expense.
It is also a good way to keep prices reasonable.

Outfits like CTD that start charging an arm and a leg for items in short supply are making money in the short term but at the expense of their long term business interests.

I can't count how many people complaining about their price gouging I have seen swear they will never buy anything from them again.

Keep adding those up and in the long run, you are going to suffer at the cash register.

Outfits like Bob's in the article above, on the other hand, have just guaranteed themselves a loyal customer base which is a healthy requirement for a long term business interest.

I know for a fact if I had to drive clear across town to do business with an outfit like that, it wouldn't hurt my feelings one bit if I drove past twenty outfits like CTD on my way there.

Notice I did not even put up a link to the dirty sonsabitches?

There are consequences you pay for being a fucking dick, even if it is just getting your name dragged through the mud by one guy on a blog hardly anyone will ever read.

Somehow, I think that I am not the only guy out there who thinks this way however.


Sixbears said...

I did a double take when you quoted the price. I thought it was high for 500. Shows you how long it has been since I stocked up. Makes gold look like a poor performer.

Yes, we will remember those who tried to screw us when there was a shortage. When this bubble bursts, some companies will get a rude wake up call.

m_reichert58 said...

CTD will not get any of my business in the future.
When you get one of their catalogs you'll notice all the things they have raised their prices on, the prices aren't listed. You have to go online to find out. That seems their ashamed of themselves. But their not alone, there are many doing the same.
Papa Mike

Anonymous said...

Makes me glad to know I acquired bricks of 500 back when they were $10 apiece, and still have a couple of dozen of them. Probably the only investment I had that I kept hold of and did that well.

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