Monday, January 14, 2013

Beer, boots, and bullets?

There's been a lot of talk about major firearm/ammunition sellers no longer wanting to sell such items due to political pressure, wanting to score points with the administration, being part of some hidden back-door anti-gun agenda, etc.

Most recently and notably has been the photo floating around involving the Wal-Mart smiley and a caption stating that their managers have been “forbidden” to re-stock the ammunition supplies currently on their shelves.

As much as I detest shopping at Wal-Mart (not for political reasons, but because I can't stand wading through the sea of fat stupid people buying Cheetos with food stamps), I will come to their defense here.

Ladies and gentlemen, the simple fact of the matter is, Wal-mart doesn't have their orders placed by store managers. I know, I used to work for Wal-Mart in Distribution Center 6092, Spring Valley IL. I loaded the trucks on their shipping dock, and I have witnessed first-hand how their logistics system would make the US Military cringe and cower due to sheer inferiority. At the Distro Center, there is a huge conveyer belt circling the ceiling of the shipping dock. Connecting the main belt to the individual truck (each store in the district has its own shipping lane) was a smaller belt. A mechanical arm would “kick” items off the main belt, sending it down to the truck so the loader could stack it.

The decision to place certain products in certain markets, at certain supply amounts for certain stores, is made by a team of research analysts that MIT wishes they could have. HQ determines how much stock of each item that an individual store should have on-hand, based on a variety of factors including population of the area, average income level, etc. The individual registers are all tied into the central server in the back of the store. When it becomes known that an entire case of shampoo of a particular brand has been sold, the server relays via satellite to the Distro Center that the store needs another case.

The case lot people are given a list of how many That's where the barcodes come in...ever notice how, on large items, Wal-Mart will have their own barcode sticker that typically has a yellow stripe? That's the code that shows what store it goes to. Items such as televisions, furniture, etc that is often shipped individually will have the barcode still on the box, while smaller items shipped in case lot will have the code on the outside of the case that is discarded by the night stocking crew. Case lot has a big sheet of barcode stickers. They go round up stuff off the shelves, slap the corresponding barcode on it, and get it moved to the big belt.

Seasonal merchandise such as Christmas decorations, fad items such as particular styles of clothing, etc are handled in much the same way, with the exception that they are allocated to the store in specific quantities before any purchase by the end consumer has ever taken place. The barcodes are applied to the cases by receiving for immediate placement on the main belt, and kicked off to the trucks for disbursement to each individual store.

While ORM-D products such as ammunition and heavily-regulated items such as firearms are likely not sent via standard truck shipping, I'm honestly not certain about this. DC 6092 where I worked was, of course, in the not-so-great state of Illinois. You cannot even have a single-shot rimfire rifle or a break-open long-barrel shotgun without getting government approval, and it's my understanding that purchasing ammunition has to be done at a dedicated gun store. I could be wrong about it, but that's my understanding of the situation. Ironically, while you can't buy ammo at Wal-Mart, you can buy Jose Quervo off the shelf...which warped this Texan's mind the first time he saw it in person. I was just looking for a can of Tony Sachere's, and stumbled upon an aisle of expensive booze!
Anyhow, the point I'm getting at here is that there is no policy forbidding store managers from ordering ammunition or firearms for their stores. Even if Wal-Mart were to clandestinely stop selling firearms and ammunition, it would not be handled in such a manner because their store managers do not place such orders.

More likely, it is being caused by manufacturers of ammunition and firearms simply not having anything to sell. Having also spent a considerable amount of time working with a local FFL gun dealer, I do realize how few firearms are produced every year in a given configuration by a given manufacturer.

Smith & Wesson dominated the AR15 rifle market, with over 98,000 domestic-use (not exported) rifles sold in 2010. Their next nearest competitor was the DPMS/Panther Arms corporation, with just under 47,000 rifles sold that year. Both corporations make models that are “AWB Compliant”, meaning they can be sold in states that ban the possession or sale of so-called “assault weapons” because they lack specific features. The numbers compiled here are for AR-15 rifles sold in every configuration made as a standard “production rifle”.

By way of comparison, the General Motors corporation sold a combined total of over 550,000 Chevy Silverado and GMC Sierra trucks in 2011. I have combined the sales figures of both trucks because they are produced by the same parent company and, other than aesthetics, are essentially the identical product. I do not have the production figures of rifles for 2011 or the truck sales figures for 2010, but we can be assured that they are relatively close in number.

While there are countless other AR15 rifle manufacturers in this country, it should be noted that the FBI statistics I got my figures from were showing the largest eight manufacturers of the past ten years. They are Armalite, Bushmaster, Colt, DPMS/Panther, Olympic, Rock River, Smith & Wesson, and Stag Arms.

Now think about how many people you know that purchased a brand-new truck last year. At MINIMUM, this will be an expenditure in the neighborhood of $15,000 for a stripped base-model truck, with the average price being somewhere around $28,000. There were over five times as many GM pickup trucks produced, as there were AR15 rifles of every brand and manufacturer, with the average price being in the neighborhood of $1,000.

The average person is a lot more able to afford a thousand dollars, than he is twenty-five thousand dollars...but the supply of rifles is a lot smaller than the supply of trucks.

Now, let's look back at the Wal-Mart situation. Most people who go to Wal-Mart don't go there for the purpose of buying an AR15 rifle or a box of ammunition, for the specific reason that their selection has been extremely limited for at least the past 20 years when compared to dedicated gun shops and even big-box sporting goods stores such as Academy or Dick's. While Wal-Mart may get a shipment of 1,000 rifles to distribute throughout the entire state of Texas, Academy may purchase ten units of a given model to stock an individual store.

The same holds true with ammunition. Take, for instance, the very popular-selling 420rd ammunition cans of 420rd Federal 62gr 5.56mm M855 ammunition. I purchased one of these cans at Wal-Mart about a year or so ago, it was one of three cans on the shelf. The other two cans at there for more than a month. That ammunition was packed in cases of three cans per case. While your local mom & pop shop might order four or five cases of this ammunition, the local Wal-Mart ordered a single three-can case of it. It was never seen again, mainly because the manufacturer (Federal's Lake City ammunition plant) had not been able to produce civilian ammo of this type until it had fulfilled all of its government orders.

Ammo is largely considered a “seasonal” item amongst big-box retailers, meaning they do not typically warehouse mass quantities of ammunition for disbursement to stores when stocks run out, this is mainly due to governmental regulations regarding storage of mass quantities of ammunition. They'll ship it out when they ship it out. Wal-Mart, even being the largest private employer on the planet with stores in six of the seven continents, still sells considerably less ammunition than most wholesalers and sporting-goods chains, due to a variety of reasons.

The ratio of customers vs customers who go specifically to purchase ammunition at Wal-Mart is likely in the 5,000:1 range, while it's probably closer to 500:1 or smaller at places like Academy. As such, it would be bad for business if Wal-Mart were to spend a considerable amount of money building an “ammo dump” in every distribution district, when the majority of their money is not made from ammunition sales. On the other hand, a retailer such as Academy can move two pallets worth of ammo every month per store and that would be the normal course of business. As such, manufacturers of ammunition are going to be fulfilling their orders to these buyers first.

Manufacturers of ammunition, like all other manufacturers, are going to concentrate on making what they are needing to make so they can fulfill orders. Our government is currently engaged in the longest-running war in our nation's history, and wars require ammunition. Unlike rifles that are issued from the armory and then turned back in at the end of the tour, ammunition is expended on a regular basis.

In the course of the Iraq and Afghanistan wars, US troops have expended an average around 250,000 rounds of ammunition per enemy confirmed killed by ALL combat action. The situation is so bad that in 2011, the United States was actually forced to import 5.56mm rifle rounds from the nation of Israel because NATO manufacturers could not keep up with demand.

One also has to remember that there are “ammunition manufacturers”, and there are “ammunition component manufacturers”. As in the clothing industry, most manufacturers do not weave their own textiles, but procure them from companies who do nothing but weave textiles and sell to people who make shirts. Likewise, a select few of the major manufacturers produce their own components, but most purchase them from other manufacturers. Because the number of component manufacturers is smaller than the number of finished-product ammo manufacturers, the supply chain is bottlenecked at the component level.

When the nation's military is in the midst of a major ongoing war and the civilian population is going through the largest firearm and ammunition buying frenzy in our known history, the producers of ammunition components simply cannot keep up with demand, even though the production is being run non-stop.

There is a massive backlog of orders for every link in the firearm chain, at every level. Ammunition, firearms, and even firearm accessories such as stocks, magazines, etc are backed up so far that it is estimated the firearms industry will need at least a year to catch up on just the current backorders. The majority of manufacturers are backed up to the point where they are not even accepting orders at this time, due to the fact that they are uncertain about fulfilling the orders they currently have.

This, my friends, is why you can't find bullets at Wal-Mart.

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