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The future of the firearms industry?

Discussion in 'General Gun Discussions' started by Preacherman, Nov 20, 2005.

  1. Preacherman

    Preacherman Elder

    Dec 20, 2002
    Louisiana, USA
    Jim Shepherd is an investment analyst who publishes an online newsletter to investors. His Web site is here for those who are interested. I was forwarded this excerpt from his newsletter via the API List.

    Sobering stuff... :uhoh:
  2. MachIVshooter

    MachIVshooter Elder

    Aug 11, 2005
    Elbert County, CO
    While raw material prices will definitely impact ammunition, I doubt it will have too much effect on firearms themselves. The cost of a chunk of walnut and 4 pounds of high-carbon steel is a very small factor in rifle prices. Even less of a factor for handguns. We are paying for the crafstmanship. The increase in gun prices will be due to several factors, not the least of which is the necessary increase in pay for firm employees and other rising business costs. But even if steel prices tripled, the cost to a large gun maker like Remington would barely be 2 digits per gun.

    Automobiles will be one of the first places we see a cost increase due to raw materials. Now you are talking 2,500-6,000 pounds of steel, aluminum and plastics. Materials cost is a big factor in such quantity.
  3. Owen

    Owen Moderator Emeritus

    Dec 24, 2002
    Georgetown, TX
    I strongly disagree. I work for a group of machine shops that make parts for gun companies. On many of those parts, the raw material is more than 25% of the cost of the part. And there isn't 4 pounds of steel in a rifle. It's more like 10, mainly because the market wo't accept resource saving methods like castings.

    Some of those materials are specialized, like the steels used for the gas blocks on sport-utility rifles (HNV3 is common with the companies I sell to). Those steels are now on an allocation basis across the market, meaning you place your order in June of 2005, and that's all you can get in 2006.

    There is way to be made by using more casting and MIM, but the market generally won't suport that. Some companies go so far as to cast pistol slides, and then machine every surface, so that the origins of the part can't be determined with out sophisticated, destructive mechanical tests.

    With pistols, there is a $500 magic number. Go over that number, and your volume decreases tremendously.

    With .22's $300 seems to be the limit.

  4. Hypnogator

    Hypnogator Participating Member

    Dec 29, 2002
    AZ, WA
    Yikes! :eek:
    Back in the days of my trapshooting affliction ;) I used to go through the shot right and left. In fact, one time, my buddy and I went together and bought a ton of shot. 1000# of 7 1/2s for me, and 1000# of 8s for him.

    Just like everything else -- geting expensiver and expensiver. :cuss:

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