By Sam Hoober, Alien Gear Holsters
Most people would say that you can save money by buying ammo online. You also get far better selection. If you’re a total newbie or otherwise cost-conscious, some people will certainly say this but the truth is that it isn’t really that simple.
When it’s in stock, that is! These days, just about everything is flying off store and online store shelves at a blistering pace, so it’s becoming an exercise in catch-as-catch-can due to panic buying that has yet to die off.
As they say, all things must pass; eventually ammo prices will calm down and we can get back to normalcy or something like it.
However, is it necessarily the case? It can be, but remember that pricing is always subject to economies of scale, so it’s really that it depends. At minimum, you have to be comparing the same product!
In order to determine if you’re saving money, you have to compare either the total price for purchasing the equivalent amount, or failing that, the price per round.
Be careful, however, of false economy due to not factoring in shipping cost. When it comes to shopping online, shipping costs are what get you.
For those unaware, false economy is when someone makes a purchase that appears to save that money, but due to other costs that weren’t considered are either only breaking even or are in fact losing money.
Hybrid cars are a great example. There are fewer trips to the pump, but since you have to pay more for the hybrid drivetrain, and when coupled with the expense of battery pack replacements, that you don’t actually save any money by buying one.
As it turns out, Prius owners aren’t being thrifty; they’re just gullible.
With online shopping, it goes like this:
Imagine there’s a hypothetical shirt you want to buy. It costs $35 at -I’d mention a store, but all the chains one could mention are going out of business!…some store that you frequent, but costs $30 online. Sweet deal, you think, so you get out the credit card but find out tax and shipping is $7.50. You’ve now paid $2.50 for the privilege of waiting to get it, instead of shelling out $35 to buy it in person.
That’s false economy.
Okay, so how about when it comes to buying ammo online vs in-store?
Partially, it comes down to economies of scale. If there was a rule of thumb of any sort, I’d say that you’ll generally need to buy 250 to 500 rounds (or more) online to realize a savings over buying the same amount of ammunition in-store. The more you buy, the less the shipping costs add to the price per round.
Let’s say that you go to your local Cabela’s and they have, say, Federal American Eagle 9mm FMJ (full metal jacket; hardball, range ammo) on the shelf for $11.99 per box. You check online and find it for $9.99 per box. However, the website you found the deal on charges $20 for shipping.
For one box, it’s the same $11.99 at Cabela’s, but the shipping brings the price up to $29.99 for one lousy box of 9mm hardball. That’s awful. The price per round is 60 cents online vs 24 cents per round in-store.
However, with only $20 in shipping costs, the cost per round drops to 24 cents per round when you buy 9 boxes. In this instance, the economy of scale is such that you break even on a cost-per-unit basis and in total purchase price when ordering 450 rounds, and therefore realize a savings (since the boxes are in 50-round lots) if purchasing 500 rounds or more.
9 boxes of cartridges at $9.99 per, plus $20 in shipping costs is $109.91, but 9 boxes in-store at $11.99 per would amount to $107.91. At this point, you’re about breaking even on a per-round basis. At 500 or more rounds, total purchase price (with shipping) is equal to the purchase price of the same amount in-store. In that economy of scale, you have to buy more than 10 boxes to realize a savings.
In fact, there’s a shortcut to figuring it out.
You look at the amount charged in store, and compare it to the amount charged per unit online. In this case, it’s $11.99 in-store and $9.99 online, a difference of $2.
Determine what the total shipping costs are, which, in this hypothetical is $20.
Use the following formula:
X= Total Shipping Costs/Price Difference
X is the number of units you’ll have to purchase in order to realize the savings.
X = 20/2, so X=10.
If you get anything other than a whole number, you have to round up. If the price difference were, say, $1.50, then the formula would work like this:
X=$20/$1.50
X would therefore work out to 13.333, so you’d have to buy 14 or more boxes to realize a savings.
This, of course, is just a hypothetical; the reality is that there are dozens and dozens of websites selling ammunition online, some of which have much more expensive shipping costs and others that have very reasonable shipping costs. Some will even offer free shipping for orders totaling more than, say, $100. Again, economies of scale.
The same thing is also true of reloading; when you factor in the purchase of equipment and components, the startup costs are tremendous, but you’ll eventually realize a savings once you’ve rolled enough of your own.
So, do you save money buying ammo online? You can if the price is right, and generally only when you buy in bulk.
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Sam Hoober is a Contributing Editor to AlienGearHolsters.com, a subsidiary of Hayden, ID, based Tedder Industries, where he writes about gun accessories, gun safety, open and concealed carry tips. Click here to visit aliengearholsters.com.