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Can someone explain?

Discussion in 'Uncategorized Threads' started by Bernie K, Nov 27, 2007.

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  1. Bernie K

    Bernie K Member

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    Maybe someone can explain to me how the price of lead is controlled by the manufacturer? I went to get some wads today and ask about the cost of shot as the market has showen a drop in lead prices, I was told that the price was the same as a month ago as the manufacturer has not told them to lower the price. I then ask them if they did not buy their shot by the skid and pay for it at the time of delivery? answer Yes. they told me that the price is controled by the manufacturer { Eagle } and that they get a phone call every day as to what the shot is to be sold for. Sounds like the oil companys, is this related to the futures market and if so how? If I buy the skid and own it why do I not control my own selling price? Bern
     
  2. hmb

    hmb Well-Known Member

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    Because if you don't follow their instructions you won't be getting any more to sell. HMB
     
  3. Gunnerandbabe

    Gunnerandbabe TS Member

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    They must get it on consignment.
     
  4. Capt. Morgan

    Capt. Morgan TS Member

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    Unless they are gouging the consumer, manufacturers sell the shot at a price that enables them to make a margin of profit over what they have invested in bringing the shot to the marketplace (raw materials, transport, labor, advertising etc.)

    If they are now selling shot made of lead that cost them (e.g.) $1.60/lb. to purchase, the cost to the consumer will reflect all the added costs involved in marketing that lead even though they may now be buying lead at $1.40/lb. The price should go down when they begin marketing the $1.40/lb. lead.

    Morgan
     
  5. code5coupe

    code5coupe Member

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    I think the place you buy your shot from is handing you a line of BS.
    Retailers can sell their products for whatever they want to charge; retail prices are not dictated by the wholesalers...not in guns, not in cars, not in gasoline, not in lead shot.
    The retail price didn't drop because the shop paid XX amount for it, and must sell it for XX+ amount to cover their profit margin...even if the world-wide selling price TODAY is less than it was a month ago when they bought the shot.
     
  6. lumper

    lumper TS Member

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    Were you talking to an owner/manager or just an employee collecting a paycheck of some sort.

    In volatile markets and times like now most products are bought and then sold on a current replacement cost basis. If they spoke to Eagle and are told that the price has dropped %%% than they will either very reluctantly lower there selling price to help liquidate there inventory and stay with the market so they can afford to purchase more lower costed goods to replace the sold product and thusly the same is true when the price goes up %%% then they will quickly raise the price on what they have so that they can afford to purchase more higher costed goods. Its called business ... thats all, just business.
     
  7. phirel

    phirel TS Member

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    Shot manufacturers must purchase the lead several months in advance of the production date. To insure a continuous supply, Eagle has most likely purchased lead at todays price for delivery next June to cover production next July. The lead mines also sell the lead several months prior to digging it up just as the oil producers do.

    If your job was to insure that 10,000 tons of lead were available each day for production to continue, you would be purchasing raw lead for delivery well into the future.

    Pat Ireland
     
  8. perazzitms

    perazzitms TS Member

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    Brand X shotmaker can't sell 10lb of lead for $1/lb that they bought for $.70/lb when the next load of lead is going to cost them $1.50/lb.

    Most companies don't finance their own manufacturing process. Retailers may, but manufacturers don't. It's just not good business.

    Same thing with oil. Why does the gas pump jump when a barrel of oil spikes? Because the refinery tells the distributer who tells the station the next load is going to cost you $XXX amount, payable in cash.


    In other words, they supply, YOU demand. The only thing you have control over is the 'demand' part.
     
  9. halfmile

    halfmile Well-Known Member

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    Any farmer knows how forward contracting works. A whole new market has risen out of the concept. Hedge funds, futures contracts, etc.

    You have to pay for what's in the pipeline. cheap shells will soon cost more because the pipeline is emptying out. Replacements will indeed cost more.

    Stocking up doesn't do a whole lot of good because tomorrow will some day be today, and unless you have a spare barn and a bathtub full of money you can only buy so much time. The benefit is short term.

    Shooters do not control lead prices, they are just a flea on a gnat's ass in the overall picture. But it's wise to watch the market and maybe hold off if you see better prices down the line.

    HM
     
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