Pay With Ammo (instead of dollars)

Scott emailed me with information about his new business called PayWithAmmo.com. It is an online marketplace/auction website for firearms and related products and services.Picture 6-15

The difference between it and other sites, such as gunbroker.com, is that all transactions are done in ammunition. You can either pay the equivalent dollar value at an exchange rate set with the current price at Ammoman.com or ship 9mm ammunition. The ammunition must be new, brass cased, boxer primed, FMJ and in the designated grain weight (115-124 grains for 9mm ammo).

I asked Scott why he thought this was a better system than using dollars:

All ammo must be new, brass cased, boxer primed, FMJ and for 9mm the bullet must weight between 115 and 124 grains.

The benefit of selling in ammo and not dollars is that ammo is, like gold, is “real” money, that is: 1,000 rounds of 9mm will always be 1,000 rounds of ammo and 1oz of gold is always 1oz of gold; there is no inflation or depreciation. Thus, if a particular rifle is presently valued at 5 thousand rounds of 9mm, all things remaining equal, next year the rifle should still be valued at 5 thousand rounds of 9mm. In dollar value, the rifle has to have “inflated” in price due to inflation, (more dollars needed as value of dollar declined), even if the list price has remained unchanged.

Sites like e-gold cost money as there are storage costs and if someone were to take delivery of the gold, once in their possession, gold has no intrinsic value except as a paperweight.

Pay With Ammo (“PWA”) seeks to provide a solution to those who rather invest in a commodity that has an inherent value, ammo.

The problem is ammo, unlike gold, doesn’t have a ready secondary market to convert back into dollars. Thus, PWA, would like to provide a means for a person who has made a sizable investment in ammo to be able to trade that ammo for goods and services. If PWA takes off, ammo can become a somewhat “liquid” asset that can be used when needed to acquire goods/services.

It is not hard to sell gold and gold does have industrial uses such as in electronics, medicine and jewelry although the demand and price of gold far exceeds that of its industrial uses. On the whole I agree with Scott and I like the concept he has come up with.

I also asked him what happens if an odd number of rounds such as 27 or 219 are the price of a good or service on the website:

Right now, if someone swaps dollars for 10, 20, or even 50 thousand rounds of ammo for personal use, they are pretty much stuck with it. With PWA, however, they can swap a couple thousand rounds for a new gun, accessory or even a service…the options are basically limitless.

If something is priced at less than 500 or 1000 rounds, if someone doesn’t have the ammo on hand and ready to ship, they will just have settle the account in dollars at the daily exchange rate.

I will be keeping my eye on the website to see how it progresses.



Steve Johnson

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.


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  • Interested Reader

    Interesting, but the statement about value of ammo holding steady is clearly incorrect. We’ve seen ammo prices increase dramatically while the prices of firearms over the same period have remained level or in some cases dropped (due to the economy this is a great time to buy used firearms for example). Therefore, a rifle worth x thousand rounds of ammo in 2005 is now worth less in terms of number of rounds to the buyer, while the cash price remained relatively steady. Just as the price of gold has not moved in unison with the prices of things you can buy with gold, the price of ammunition is not tied to the prices of firearms. You could still agree to exchange ammo for a firearm, but the premise that the values remain constant does not hold water. The other problem (already solved with cash) is portability. Although the owner talks about the problems with payment services, moving physical items costs money for shipping, insurance, etc., and is less reliable than moving and storing money. Money is also readily used to buy anything, whereas the market to purchase things with ammunition is very limited in comparison. This is simply a barter system limited to one item on one side of the transaction.

    I am a fan of Ammoman.com, this makes that firm the “gold standard” for pricing ammunition!

  • Interested Reader, good point about the increase in ammo price vs. gun price.

  • Interested Reader:

    You are confusing the price of ammo in dollars with ammo itself. 1000 rounds of ammo will always be 1000 rounds of ammo; it doesn’t inflate or decrease in quantity (unless you shoot it up). The point you are making is the price of ammo in dollars has skyrocketed in the past year but the price of firearms has decreased in dollar terms. However, if you had 1000 rounds of 9mm last year, you’d still have 1000 rounds of 9mm today.

    In the U.S. dollar system, which is a “barter system limited to one item on one side of the transaction” inflation erodes the purchasing power of 1000 dollars. For example, using the CPI, 1000 U.S. dollars in 2006 would have the purchasing power of only 975.61 U.S. dollars in 2007.

    The quote in the post above, “Thus, if a particular rifle is presently valued at 5 thousand rounds of 9mm…” is therefore true as it is qualified by “all things remaining equal” i.e. supply and demand. Given the wars, demand for ammo has continued to grow, and given the faltering housing wealth of Americans, the demand for used guns has decreased pushing down the price in U.S. dollars. The increasing supply of used guns has also helped to push dollar prices down.

    With fiat money, such as the U.S. dollars, even if supply and demand remain in equilibrium, “all things” cannot remain equal as inflation causes 1000 dollars to have less purchasing power regardless of underlying changes in supply and demand. That is why a gold or a gold backed currency is so attractive as a medium of exchange. PWA hopes to make ammo a similar type of medium of exchange.

    Interested Reader, in your example above, it is clear that demand for ammo has grown, so it now takes more U.S. dollars to buy the same amount of ammo and as demand for used guns has collapsed, it now takes less dollars to buy them. But that is true only if you think in terms of our U.S. “barter system” of dollars.

    Changing your definition of “barter currency” changes the result. That is, using the example of ammo versus used guns, and when thinking in terms of wealth, if you had 50 thousand rounds of 9mm last year and still have 50 thousand rounds today, then: (1) your wealth in ammo has remain unchanged; (2) your wealth in dollars has increased; but (3) your wealth in Japanese Yen has gone down.

    With PWA online, it offers another avenue for American families to diversify out of dollars and invest in something which has a more meaningful use than gold/silver/or other precious metal.

  • Correction in reply above:

    “For example, using the CPI, 1000 U.S. dollars in 2006 would have the purchasing power of only 975.61 U.S. dollars in 2007”

    should read

    “For example, using the CPI, 1000 U.S. dollars of goods in 2006 would cost 1028 dollars in 2007.”

  • jeff

    this sounds ridiculous .. good luck with that biz model!!

  • Interested Reader

    Scott,

    I’m not confused about anything. Ammunition is a poor medium of exchange for the reasons I pointed out and many others. Your 50,000 rounds of ammunition is worth varying amounts of money in different years, and at least in the past few years that value has changed dramatically, much more than the modest rate of inflation. I bought almost 1,000 rounds of 7.92X57 in 2004 for $65. That ammo now is worth far more than that now simply due to supply and demand. Ammo is not analogous to gold.

    Ammo is only of value to shooters ultimately, and hundreds or thousands of rounds are really only of value to high-volume shooters. The market is therefore artificially limited. Therefore, 1000 rounds of ammo is only worth 1000 rounds to a shooter. I can’t take the ammo to the gas station to buy a tank of gas, nor can I put the ammo in my bank and earn interest (admittedly low interest right now) on the money. I can’t buy a birthday present for my kid with it without trading it to someone else for money or in kind for the gift, if I’m lucky enough to find someone who wants to trade an Xbox 360 for bullets.

    If your system really worked, barter of all kinds would be far more prevalent than it is now. The bottom line is that cash is still king.

    If diversification is the big advantage here, why not trade in gallons of 87-octane gas? At least more people can use it!

    I think the website concept is an interesting idea, and a certain number of people with a lot of ammo on their hands but no cash may use it. Only thing is, if you are a seller, are you really going to accept 7100 rounds of 9mm in exchange for an AR-15? Unless you are in Delta, you aren’t going to shoot that much in a year.

    Very truly yours,

    Interested Reader

  • Ray

    This is a very intereting topic, but I’m afraid it will never work in todays world. Not, at least, on any appreciable scale.

    I say “in today’s world” because ammo is mostly only used occasionally by recreational shooters who are not constantly using it to put food on the table or for self defense. Therefore, it has no real intrinsic value (except for the cost to replace it).

    In the event our world changes to the degree that people are having to constantly depend on guns for their safety and food then ammo will truly be “worth its weight in gold..” for at that same time there won’t be any large-scale commercial ammo manufacturers (except gov’t. run) to supply it to the public. Look for a new cottage industry to spring up—home ammo reloaders–and the associated problems that will come with that–under/over-charged rounds, mis-fires, etc.

    It’s an intresting proposition, but in the world we live in today it simply cannot work. Additionally, it’ll take at least a generation (probably longer) for our current “system” degrade to the point that ammo would become universally acceptable as currency.

  • I’m sure this would work in a lot of countries where guns are not just used by “recreational shooters.”

  • jed

    Site seems to be dead? I get a 403 using both paywithammo.com and http://www.paywithammo.com.

    • jed, dead for me as well