Why is it....


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jsalcedo
August 24, 2004, 08:19 PM
I've studied economics and have worked with cost analysis, manufacturing
and component procurement but there are some things I just do not understand about the firearms and ammunition industry.

Maybe some of you learned folks can help.

Why is it that:

A box of .22 magnum is $6.99 for 50 rounds when a very similar box of winchester .22 LR costs 88 cents? Both rimfire not much more brass or powder, same copper washed lead bullet..


At walmart or a sporting goods store a box of Winchester whitebox 9mm
sells for $3.99 or $4.99 but a box of blazer aluminum case .380acp is $8.99
or a box of federal .380acp is $11.99


My local gun store sells new unprimed remington 45acp
brass for $13.50 for 50! I can buy loaded .Remington .45acp ammo
for 2 dollars less.

Same goes for .451 FMJ bullets from speer or hornady $16 for 100 bullets
I can go buy wolf ammo and use a bullet puller and save money.


An MKIII SMLE sells for about $59 in shootable condition but a bolt assembly minus bolt head, extractor etc.. is $69

I would hope that there is some logic behind these seemingly contradictory
prices.

Anyone want to take a stab at it?

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Werewolf
August 24, 2004, 08:26 PM
A local gunstore sells High Point 9mm's for $239. They sell a lot of them according to the owner. You can pick them up elsewhere for between $129 and $189 - wait for a gunshow and you can get one NIB for $89.

Selling price is a function of what customers are willing to pay and has very little relationship to cost. Hopefully price is greater than cost but I can tell you from experience that that is not aways the case.

Sometimes manufacturer's mandate the selling price and a retail outlet must abide by that price.

cracked butt
August 24, 2004, 09:05 PM
My best guess is that the tooling up costs for producing .22 magnum ans .380 are the same as for .22 LR and 9x19, but the sales volume is MUCH lower so that in essence, its more expensive to produce per unit.

Shanghai McCoy
August 24, 2004, 09:11 PM
Yep,volume is the answer.Less folks are re-loading and 9mm and 45 are popular so the bulk ammo is a better deal and they sell a bunch.

A digression,when I lived in Tulsa Shiner Bock was cheaper by the 12 pack than by the case....go figure.

fjolnirsson
August 24, 2004, 09:55 PM
At walmart or a sporting goods store a box of Winchester whitebox 9mm sells for $3.99 or $4.99


Holy hel. I'm getting reamed. Last time I checked, that same box, at the same chain store will cost me $8.74-$9.99!

I have to get out of this state. Before they put up the concertina wire.

MoNsTeR
August 24, 2004, 10:01 PM
"cracked butt" nailed it, the answer for all is production volume.

It's even the answer for the rifle vs. bolt assembly quandary, even though "production" there means something unusual. There's probably a small pool of actual spare parts, so in order to sell individual parts they have to strip complete guns. Since complete guns are easier to sell than parts, certain parts are in more demand than others, and guns that are partially stripped still take up storage, the vendor needs to earn a better return on the parts, hence the odd pricing.

Bob F.
August 24, 2004, 11:22 PM
Don't know what you're fussin' about. We're paying $10.99 for WWB 9mm "value pack" here (100 rds). I hope that's not the WWB you're referring to (I know {to which you are referring}). I'll have to start taking Vaseline with me when I buy ammo!

jsalcedo
August 24, 2004, 11:29 PM
Don't know what you're fussin' about. We're paying $10.99 for WWB 9mm "value pack" here (100 rds). I

Not really fussin, just wondering about the disparity for seemingly similar products.

The 100 round packs usually run $8.99 the 50 round boxes are almost always under $6 and go on sale for as little as $4

Okiecruffler
August 24, 2004, 11:55 PM
Not as much demand, less supply, higher prices.

And I wonder where Werewolf is finding those $239 Hi-Points? :D

Majic
August 25, 2004, 04:31 AM
A lot of .22mags have jacketed bullets, not just copper washed.

MoNsTeR
August 25, 2004, 10:33 AM
$8.99 value packs? Now that's news! I thought $10.96 was THE price nation-wide.

Zach S
August 25, 2004, 10:51 AM
As already stated, the more you make, the less it cost to make. Goes hand-in-hand with buying in bulk. You buy a s***load, you get a pricebreak, since making/packaging/shipping the s***load didnt cost as much.

Lets say youre making an aluminum dash to hold autometer gauges for a Mustang on a three axis CNC machine (X and Y being fore/aft and left/right, and Z or B being the depth of the spindle). First, you need a program, I dont know how CAD drawings work but they come into play (I write programs using a blueprint, calculater, pen/pencil, and paper, however I run a two axis machine). Figure $40/hour for that, another $40/hour to set the machine up, and $40/hour to make the part (I think those were the numbers anyway - yes, this example specific). The pricetag one dashplate would be somewhere between $700 and $800 IIRC. Make 19 more and the price drops to about $150 each.

Lets say I broke the part of the plate that holds the speedometer in, (there are four plates total, two pairs to be specific). Assuming I couldnt make it myself (I can, but...), and I had to order it form the manufacturer, the program probably has to be put in the machine, if not re-wrote just to make that one peice, and not 20 indiviual parts, or 10 sets of the four plates (which falls under "make more/costs less")). The fixture for the machine may need changed or modifed. Thats a lot of time and work for a peice of .125" aluminum thats going to be a lot lighter when the end mill is finshed, the price just sky-rocketed. Okay, so maybe he goes ahead and makes 20 individual plates (or ten sets of four) in case some other moron fubars the same part I did. Later he may find himself thinging "S***. I need this space for something that sells well, but I have all these parts in the way. Should I scrap them out and take the hit, keep them somewhere where I'll possibly forget where they are when/if I screw one up, sell them for a weird price, make nine of the main plates at a higher cost for myself and throw the three leftover parts away, or do I make ninteen complete parts to take up more room, hope they sell, and throw the three leftover parts away?"

Sam Adams
August 25, 2004, 11:01 AM
The 100 round packs usually run $8.99 the 50 round boxes are almost always under $6 and go on sale for as little as $4

Which Wallyworld sells them for that little? I regularly see the value packs at $10.9? at the Dezavala location. Please let me know, esp. if there's a sale.

DevilDog
August 25, 2004, 11:01 AM
Selling price is a function of what customers are willing to pay and has very little relationship to cost.
That's pretty much it.

Whenever you find yourself saying "no way does it cost $xyz to make that", remind yourself that the cost to make the item really has nothing to do with the price tag.

Real life scenario - My brother owns a company that makes a common sporting goods product. The MSRP of his high end version of his product vs his low end product is huge. This leads one to believe that the high end version costs much more to make. It does not.

They are both made in the same factory (as are all other versions of this product). The cost difference to make his high end product version is only a few dollars more than his low end product version.

His company makes almost no money on his low end product. Almost all profits are of his high end product, and they make some profit off the intermediate versions.

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