How jobs get created, my story

Discussion in 'Economy' started by The Rabbi, Feb 5, 2010.

  1. The Rabbi
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    The Rabbi Diamond Member

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    I am a partner in a tiny start up company that manufacturers pistol ammunition, called Blue Bunny Ammo. As people involved with guns know, ammunition has been in short supply for over a year,with some calibers unavailable. It was during this time we started Blue Bunny.

    As part of my sales duties I call on dealers to try to sell stuff. I had one of our existing accounts call me and ask if we could make .38 S&W.
    Now, .38 S&W is not .38spc, a very common caliber. It is an obsolete little revolver round that was popular with the British prior to WW2 and here up until about that time or a little earlier. Technically the big ammo makers like Remington and Winchester produce it.
    But they makea run of the stuff like every 2-3 years because it isn't a big seller, as no pistol has been made using that ammo for over 40 years. Now, with huge gov't cotnracts for military calibers the major companies aren't producing low volume slow selling items like .38S&W. So no one else has it available.
    Making it wasn't easy. We load on a machine called a Dillon 650. Each caliber uses its own equipment specific to it. Dillon does not make equipment for the .38S&W. We ended up cobbling together pieces of 4 different calibers to get it to work. My "engineer" has had 50 years' experience loading and working with this equipment and that along with calls to Dillon produced this result, which works pretty well.
    Today I deliver the first load of finished ammo to the shop that asked for it. Our profit margin is about 75%. We will use the profit to buy more components to produce other calibers. With sales growth I anticipate buying more loading machines and probably hiring and training someone to run them.
    Note that there was no gov't directive telling us to start making .38S&W. It was classic going into the marketplace and responding to demand. Every company does this to some extent. Note also that this administration will not understand all that.

    If this were to come from the gov't the first thing would be a congressional inquiry into the shortage of .38S&W in the marketplace. The major ammo companies would be castigated for neglecting consumers and threatened with fines. Then the gov't would offer subsidies to them to produce this ammo at low prices. With limited demand but incentives to produce the market would become glutted with .38S&W, which would be sold at close out at bargain prices. All this would take capacity from other calibers of ammo that do sell, creating shortages in those markets. Eventually there would be a push for gov't to take over the ammo industry.
     
  2. Paulie
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    Paulie Platinum Member

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    I don't know if you still have me on ignore or not, but this is a good post my man. :thup:
     

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