January 27, 2013, 01:13 AM
The current buying hysteria got me thinking of the economics of producing AR's and mags.
I read somewhere that the "guestimate" of total magazines of all types in US is in the hundreds of millions, and that there are 4-5 million semi-automatic AR type rifles here as well.
Does anyone know details of actual production capability?
I'm guessing that there won't be a federal AWB or mag ban, so we will see maximum AR and magazine production for at least year to satisfy demand.
How many magazines have been sold in the last month?
Any idea on how much money has been spent in the last month on firearms and accessories?
I consider myself a casual enthusiast, and my assortment of USGI and pistol mags has been fine for my needs. After seeing how fast the gun banners can jump on a tragedy, I have plans to acquire a lifetime supply of various magazine types that I use as soon as the supplies are back up.
Magazines, ammunition, lower receivers, and on, and on.
Is everyone thinking the same thing?
Magazines are inexpensive, mass produced items that can be produced by the million. Does anyone have an idea of how many magazines are going to be sold in the next year if every gun enthusiast feels like me?
January 27, 2013, 12:15 PM
By the millions? If you take all the makers of gun magazines and assume that they move every last bit of production from stocks, sights, replacement gun parts for guns that break, and no new production of existing guns then I suppose the production might be in the millions. You should look up the company profiles on some of the places that produce mags. You'll discover that many of them aren't the huge sprawling factories that you might envision, given the well-known status of many of these companies. http://www.manta.com/c/mm2ssms/magpul-industries-corp Here is a company profile that I found on Magpul. And another, http://start.cortera.com/company/research/k3m3psm4k/magpul-industries-corp/
Neither of those company profiles show Magpul with more than, at most, 50 employees. Probably more like 25 or 30 if we take an average. I estimate (based on nothing...but factoring in cutting and shaping the metal, welding it, tempering the metal, painting it, putting in springs and follower, and finally packaging the mag, and then processing it thru shipping) that it would take about 6 minutes for one magazine to be produced. Or about, on average, 10 per hour per employee. With 20 employees dedicated to doing this, they would produce about 1600 magazines in a standard 8 hour day. Or about 8000 per week. At $15 per mag that would equal about 120,000 dollars in inventory a week or about half a million a month. It lists the sales range of Magpul in the company profile as between 1 and 5 million per year. That's a pretty huge range I'll grant. But if we assume this is accurate, then 5 million dollars would equal about 500,000 mags per year being made...if they ONLY produced $10 mags. Since they don't, you have to start subtracting how many mags they make. But figure they make somewhere around 250,000 to 300,000 mags per year. They've been doing this since 1999 when they started, so there are roughly--if I'm right--3.9 million mags produced by Magpul over a 13 year period.
Right now, EVERY one of the mags they produce is instantly bought up. By guys in 46 states who can legally buy them. Those 32,000 mags a month would normally be enough to meet demand...but not right now. Each state on average is getting about 700 mags per state each month right now from Magpul. Those are instantly bought up. I'm sure they are TRYING to up their capacity, but to install new conveyor belts and machines to press out the magazines (or Star Trek replicators, whatever) takes time to do, building space to do it in, and the hiring and training of new employees who won't screw up the magazines during production.
Other companies will be producing mags, but the bigger companies produce other products too, and they have the same issues with reorganization. Do you buy million dollar machines to meet a temporary panic demand, and find yourself stuck with a huge building that costs money to maintain once the panic stops? Probably not. You just run the maximum production you have right now and wait to see if the demand stays the same over the long haul.
My point is, don't expect to be seeing huge inventories of hi cap mags as long as this demand is up...especially when companies make different calibers and types of mags and have to retool their equipment each time they run off a new batch of another type of mag (AK 47 vs. AR15 for example).
January 27, 2013, 04:38 PM
Yes those are good observations.
I was thinking that they make an initial investment in tools, and they know that due to avg demand they can sell x amount of product over time for profit and to recoup their investment. That's their baseline production. I saw on the Troy website that they were charging $75 a mag, because they thought that their tooling investment would be lost after a ban. I'm fine with that, someone is paying that, and that's business.
Most companies have multiple product lines, and I'm betting that their baseline production is less than what they could make if they focused on the product with maximum demand. Right now demand is unlimited, every magazine unit they make is guaranteed sold. This is a huge incentive for a company owner to get creative with production capabilities.
A news article said Brownells sold 3.5 years worth of magazines in 72 hours. That's just one seller. I'll be curious to see a production stat for various items for 2013, but I don't think those kinds of stats are collected. Maybe by the industry.
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