Reloading Components Supply----Hope?

[chkunz]

In a capitalistic, free market normally when there is a need or if prices get too far out of line, entrepreneurs see and opportunity and jump in to take advantage of the situation. Are we seeing any of that yet or are we reloaders just too small of a market.

 

[RustyInBend]

In a capitalistic, free market normally when there is a need or if prices get too far out of line, entrepreneurs see and opportunity and jump in to take advantage of the situation. Are we seeing any of that yet or are we reloaders just too small of a market.

I think the problem is more about "barriers to entry". I'm sure lots of companies would like to take advantage of the demand curve right now, but that means either over-building manufacturing space (for existing suppliers), or starting up a production facility (for new entrants). Both are expensive up-front, and perilous down-stream if demand tails off. I believe current constraints will continue as long as costs of expansion, barriers to entry, and constrained supply chains continue to produce the risk curve that makes investment a problem right now. So short answer ... it's less about the end-user demand, and more about cost and risk on the part of existing and potential manufacturers.

 

[Coyotefurharvester]

Yes, regulations and permits, insurance, financials. ESG. All problems, haven't heard anything about the new primer plant in Wis.

 

[jelenko]

Good question.

I think potential entrants may be wary of what the long term market will be after seeing the excess supply conditions over the past 10-15 years. And of course, on the war in Ukraine.

That said, there have been several announcements about companies planning on additional primer production [Grind Hard, Expansion, Nammo].

Haven't seen any announcements on brass, bullets or powder.

I find it interesting that Vista hasn't planned any increase in primer capacity. I'm sure they've considered it.

 

[Dusty Stevens]

Seems like every new primer supplier went dark.

 

[DiRTY DOG]

Hard to believe they still can't catch up to demand after several years. All of them, not just one brand. Are we sending American made primers/ammo to fight Russia? Or somewhere else? Where are they going?

 

[L.Sherm]

I find it interesting that Vista hasn't planned any increase in primer capacity. I'm sure they've considered it.

Why would Viata invest a crap load of money in New machinery and try to find employees when there already making record profits.
Hell I wouldnt.

 

[Dusty Stevens]

Why would Viata invest a crap load of money in New machinery and try to find employees when there already making record profits.
Hell I wouldnt.

Theyre down 26% for the year

 

[Dave M.]

Why would Viata invest a crap load of money in New machinery and try to find employees when there already making record profits.
Hell I wouldnt.

Neither Revenue, nor EPS, is in any way related directly to profits. You have any other graphics showing they are making record “profits”??

 

[K22]

With a non-controversial commodity, financing a new entry in the business is typically easy if a large demand and small supply can be demonstrated. This is economics 101.

However, many financing entities do not want to be associated with the shooting sports because of the negative political impact. It's not fair but that's the world we live in.

 

[jelenko]

Why would Viata invest a crap load of money in New machinery and try to find employees when there already making record profits.
Hell I wouldnt.

They would invest to protect their market share. As/if new entrants start producing, Vista's market share will drop [unless, of course, the market grows fast enough to support the volume the new entrants obtain].

Market share is an important factor in maintaining/growing profit margins.

 

[RegionRat]

The cost of money these days has to be considered like K22 mentioned, but isn't it true that the cost of money/credit is higher and more difficult in 2023?

The trend for credit/loans for small and midcap business is not a good one for the last several years, so we can only add that to the cost/barrier of entry arguments.

 

[L.Sherm]

Theyre down 26% for the year

There stock?

 

[Dusty Stevens]

There stock?

Yes

 

[L.Sherm]

Yes

So they only profited 239 million last quarter and last 2 years there revenue doubled, dont suppose that has anything to do with the 100.00 primers?

 

[L.Sherm]

Market share is an important factor in maintaining/growing profit margins

They have 90% of the primer market.
Winchester and Ginnex are the only ones they dont own yet! and there a drop in the bucket to how many primers are on the market.

 

[Deleted member fkimble@charter.net]

And if some one or in reality a company decided to enter the primer market, it would take lots of $$$ and a couple years to even get to the point of producing the first primer. These shortages are usually over before production could begin. So you spend boocoo dollars and then there is no demand. Buy an existing building would cut the time line big time but I bet there is no manufacturer of primer making machines so they would have to make the equipment also, just more money and time.

Frank

 

[Walt Krafft]

Primer manufacturing requires special buildings, machines, knowledge. Not off the shelf stuff. Vista is having to spend money getting Remingtons plant back up to speed. Pistol, rimfire, shotgun, rifle, components is the likely order of importance.

 

[Bc'z]

Theyre down 26% for the year

Maybe so, but thier still making money.
There's components to be had, may not be main stream, but components nonetheless.
Work with what ya got, you might be surprised.

 

[ebb]

When this finally comes down to more supply than demand, I don't care if my group size doubles I will never buy anything from Vista.