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Old October 4, 2012, 10:59 PM   #10
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Join Date: August 18, 2009
Posts: 826
Brass prices, as well as bullet prices, powder prices, primer prices, etc. etc. are based on "whatever the market will bear". Expressing it as "supply and demand" is largely an academic concept - in the real world, many other factors have a bearing on actual prices. The "supply and demand" concept does tend to (often, but NOT always) adequately explain fluctuations in prices, due to macroeconomic changes in the marketplace. However, the concept is particularly simplistic and only takes into account the most basic conditions. It does not adequately define such factors as the initial setting of the price of a new product, or collusion among multiple producers within a particular sector, whether tacit or direct, among many others.

If suppliers could get $1 million PER cartridge case, then that is what they would charge. .380 cases cost as much as they do because the .380 is a very popular concealed carry, general SD and ladies round.... and producers reason that they can get more for the brass. That sounds like "supply and demand", doesn't it ? But, if the "logic" of supply and demand really worked, then 9mm Luger, which is by FAR the most used handgun round (and therefore, the most in demand) in the WORLD, would be FAR more expensive than any other. Yet, largely the opposite is true.

The dimension of mass production leading to lower production costs and vice versa, certainly does play a role, in general terms. However, in the case of 380 vs. 9mm Luger (brass), for instance, it has NO bearing, because the .380 case is only a "short 9mm". Except for length, it is exactly the SAME as the 9mm Luger.

The reason that "supply and demand" falls on it's a** as a real world concept is that, while it sounds good, it says nothing about the STARTING point of pricing policy. As I said, it does explain price fluctuations due to market conditions, but not how the pricing policy was derived in the first place.

In many market segments, initial pricing policy, as well as much of the fluctuation over time, is actually based on what could be called "captive market strategy". In simple terms, this means setting prices on the basis of the fact that the market is limited for a particular product. A "captive" market (also referred to as a niche market) segment can usually be induced to pay artificially higher prices than would otherwise be the case - because the suppliers within that limited segment are "the only game in town", so to speak.

Such is the circumstance with hand loading equipment and supplies. A limited market (or niche market) held "captive" by a limited number of suppliers. So, you get prices out of all proportion to production costs. You also get price increases, like those we have seen over the last 5-10 years, that cannot be explained by normal market forces, nor exponential increase in demand (because that is not happening - growth is occurring, but not at that rapid a rate). Since those suppliers are well aware of each other's costs (and cooperate tacitly for the most part on general pricing policy), this trend is unlikely to change. If another supplier entered the market and flooded it with products at a lower price point, then "supply and demand" would have an effect....and the price trend might reverse somewhat. But, I don't see that happening - the reloading market is too specialized and limited by nature.
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