S&W's sales down 48.5% compared to last year...

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A whole lot of, '' I want that business to do what I would not do if I was that business.''
The primary goal of business is PROFITS. Will any of the Calculators here work for that which they advocate? A crystal ball is not available but the answer is NO.
The primary cost of a washing machine is PROFIT. Repeat (vehicles, clothes, etc).
I suggested to many friends to go buy a S&W pistol during their recent rebates combined with retailers sales. Several did, many did not. A S&W M&P Shield 9mm was like, crazy cheap. A 45acp Shield was something like $275-290 after rebates !
If S&W was selling out / closing that's one thing. Seeing they were not, they were and are attempting to gain market share.
 
Get rid of the lock and watch their revolver sales double . I know that is a small market now , but the last 4 guns I bought were revolvers and 3 of those were Rugers because of the lock and 1 was a S&W pre lock .
 
The gun industry will find some way to hype up the fear and get people buying. They are great at this and people are extremely easy to manipulate when some sort of fear or worry sets in. It's really terrible, but it is what it is.
 
How much should a skilled craftsman be paid for a day's work? How much for the guy running a forklift in the warehouse?

Everybody wants guns to sell for 1937 prices, but nobody would be willing to work for the low wages needed to make that happen. If I can't earn a decent living making guns then I'll have to start making alternators or hard drives. People talk about how gun makers or local shops are "price gougers" but they never ask themselves how little they would be willing to make in a day before they just go home.

I was once a public school teacher. I know what it's like to be criticized and asked to justify my salary, yet I earned far less per hour per kid than you pay your teenage babysitter. There comes a point where skilled labor realizes others will pay more for their skills and so goes elsewhere. How many guns do you think S&W has to sell in a day just to keep the lights on?

I'm amazed we still make anything in this country today.
 
DoubleMag said:
A S&W M&P Shield 9mm was like, crazy cheap. A 45acp Shield was something like $275-290 after rebates !
If S&W was selling out / closing that's one thing. Seeing they were not, they were and are attempting to gain market share.
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Yup, they were after market share with the Shield promotion and that issue was directly addressed during their FY2018 Q1 conference call this past week and they feel that the promotion delivered an "incredible result". So if it was such an incredible result, you might ask why their sales were down so much in Q1. That's because those pistols sold to retail customers in Q1 actually were booked by S&W as shipments to dealers in FY2017 Q4.:

We believe that our handgun shipments were impacted by an extremely successful promotion on our M&P SHIELD pistols that we initiated in April during our prior fourth quarter. That promotion well-exceeded our expectations and we believe it pulled forward our shipments into the fourth quarter as wholesalers and retailers stocked up in preparation for the strong consumer demand they believed would occur and actually did occur over the ensuing 90 days.

As a result of our promotion, our monthly market analysis indicates that we gain significant market share in the first quarter as a large number of consumers purchased the SHIELD pistols that we have previously shipped into the channel in Q4. In fact our research indicates that we grew our SHIELD share of the total handgun market by more than 5 percentage points, an incredible result.
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For anyone who cares about the details, the entire conference call transcript can be found here: https://seekingalpha.com/article/41...-results-earnings-call-transcript?part=single
 
hemiram said:
Until they get rid of the lock, I won't even consider a new S&W revolver. If they did, I would probably buy a new 686, Until then, it's the oldies for me. I just bought a nice 28-2, and a pre lock 29 is a future buy.
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Oh trust me, I've got a whole list of new S&Ws I'd like to try, but like you, they will not see a single dime until that little hole gets plugged. I have bought one of their new non-lock models (S&W 642) in recent years and have been very pleased with it, but they only make about three different models without locks, a real shame.
 
The tremendous gun sales bubble had to pop at some point.

Now, maybe some of the major gun makers operating in the US will be able to drop their 24/hr manufacturing back to only 2 shifts.

I remember the instructor telling us in my last Glock armorer recert that they were not only running production 24hrs a day in the US, but also their repair dept was running on 24hr shifts, too.

It would be nice to see both ammo and gun makers able to slow their roll a little, and maybe be able to get some breathing room and put some more attention on QC. Products have been flying off the production lines and out the front doors of both in recent years.
 
Solomonson wrote:
If this keeps up, we might once again see firearms priced based on their cost to produce and sell plus a reasonable margin, rather than the ridiculously high prices the market allowed over the past several years.
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As you note in Post #15, the firearms "market" in the United States is far from a "free market" and the "friction" caused by the laws that keep it from operating as a free market are acting to mitigate the economic forces that would normally put pressure on manufacturers to lower price to maintain revenue and/or market share.
 
Solomonson wrote:
I would be interested to know how the sale of ARs cannibalized sales of other firearm lines such as traditional bolt action hunting rifles?
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I don't know that there's any way to determine that. Unless you surveyed new AR purchasers and asked them if they would have bought a bolt gun instead there doesn't seem to be any proxy to allow that decision to be gleaned from market data.
 
hdwhit said:
As you note in Post #15, the firearms "market" in the United States is far from a "free market" and the "friction" caused by the laws that keep it from operating as a free market are acting to mitigate the economic forces that would normally put pressure on manufacturers to lower price to maintain revenue and/or market share.
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Agreed 100%
 
hdwhit said:
I don't know that there's any way to determine that. Unless you surveyed new AR purchasers and asked them if they would have bought a bolt gun instead there doesn't seem to be any proxy to allow that decision to be gleaned from market data.
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Sure there is. The number of AR-platform rifles used in hunting has grown by leaps and bounds. The AR-platform rifle is now the single most popular platform (ahead of bolts) for sales of centerfire rifles. You don't get there without taking a big chunk of the hunting market.

You can also see the move by Ruger and others to introduce low-priced yet excellent bolt action rifles in hunting calibers in response to the pressure being applied by the AR platform.
 
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John G C 1 said:
The gun industry will find some way to hype up the fear and get people buying. They are great at this and people are extremely easy to manipulate when some sort of fear or worry sets in. It's really terrible, but it is what it is.
Click to expand...

They certainly try their best. Even people like the fairly credible Tom Gresham are schilling hard for them.
 
fastbolt said:
The tremendous gun sales bubble had to pop at some point.

Now, maybe some of the major gun makers operating in the US will be able to drop their 24/hr manufacturing back to only 2 shifts.

I remember the instructor telling us in my last Glock armorer recert that they were not only running production 24hrs a day in the US, but also their repair dept was running on 24hr shifts, too.

It would be nice to see both ammo and gun makers able to slow their roll a little, and maybe be able to get some breathing room and put some more attention on QC. Products have been flying off the production lines and out the front doors of both in recent years.
Click to expand...

Reductions to production output were implemented long ago for most models given the slumping sales.

It's sad to see someone equating production throughput with "QC" -- as if as production levels increase, product quality levels necessarily decease. That's 1950's think. It's also indicative of crummy companies.
 
deadin said:
I would be much more interested in what their net margin is.
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That shouldn't be terribly difficult to calculate. I don't know what the excise tax is, but I have heard the number 15% I've also heard that number applied to retailers' margins -- often less actually (except for the gougers of course -- I suspect Bud's is below 10% for example) Apparently they're notoriously slim. Most gunmakers maintain the distributor tier for at least some of their sales as a cushion against liability. I can't imagine they are more than 15-20% for "non-luxury" firearms.

So, $500-.50x$500-$125(product cost)=$125 ===> $125/$125 = 100% net margin. A stunning number.
 
Elkins45 said:
How much should a skilled craftsman be paid for a day's work? How much for the guy running a forklift in the warehouse?

Everybody wants guns to sell for 1937 prices, but nobody would be willing to work for the low wages needed to make that happen. If I can't earn a decent living making guns then I'll have to start making alternators or hard drives. People talk about how gun makers or local shops are "price gougers" but they never ask themselves how little they would be willing to make in a day before they just go home.

I was once a public school teacher. I know what it's like to be criticized and asked to justify my salary, yet I earned far less per hour per kid than you pay your teenage babysitter. There comes a point where skilled labor realizes others will pay more for their skills and so goes elsewhere. How many guns do you think S&W has to sell in a day just to keep the lights on?

I'm amazed we still make anything in this country today.
Click to expand...

It wasn't labor that was getting fat during the go-go Obama gun sales days. It was management and stockholders.
 
So, $500-.50x$500-$125(product cost)=$125 ===> $125/$125 = 100% net margin. A stunning number.
Click to expand...

Hardly "stunning." Jewelry is priced on "keystone" or 100% markup every time it gets sold. The manufacturer sells it to a wholesaler = 100%. The wholesaler sells it to the distributor = 100%. The wholesaler sells it to the retailer = 100%. The retailer sells it to the customer = 100%. Now - THERE'S a "stunning" markup from the manufacturer to the end customer.

I worked for an engineering firm. My base rate was figured on my raw hourly rate + fringe benefits + overhead. The base rate was then marked up 2.5x to the end customer. A friend worked for one of the National Laboratories - his time was marked up 3.5x above his base rate.

Please - just stop with your figuring of what's reasonable in your world. You're not taking into account ALL of the costs because you don't know them. That includes overhead (utilities, insurance, copy paper, toilet paper, coffee, office equipment, etc.), taxes (local, state, federal), production salaries, overhead salaries, materials, fringe benefits, advertising, maintenance, equipment and tooling replacement, product development costs, research and development, design development, prototype development, advertising, sales, leases, rentals, cost of money, cost of inventory, and a myriad of other costs I've probably missed.

With multiple plants, costs vary by location so you have both an individual and aggregate costs.

Before you do your simplistic math equation and then declare the number "stunning" - you might want to get real costs before profit. It might surprise you as to how little money is actually being made.
 
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Solomonson said:
Getting rid of the locks would make a trivial difference in terms of sales.
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Disagree...quite aside from the terrible aesthetics of the lock, it is a constant, visible reminder of the times that we live in: gun control, frivolous product liability lawyers and lawsuits, lack of personal responsibility, etc. Many people looking to buy a revolver want simplicity, craftsmanship, or just a connection to a simpler, better, time- the hole is a psychological slap in the face.
Plus its a totally unnecessary moving part, and just one more thing with the potential to break.
I own many Smith and Wesson products, and am always looking to add more, but when I see the lock, I keep on trucking.....
 
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Solomonson said:
Reductions to production output were implemented long ago for most models given the slumping sales.

It's sad to see someone equating production throughput with "QC" -- as if as production levels increase, product quality levels necessarily decease. That's 1950's think. It's also indicative of crummy companies.
Click to expand...

I've heard production shifts were still running 24hrs at a couple of the companies, at least up through this Spring. Haven't asked since then.

I'd like to fully agree with you about not having QC slip as production increases, but if nothing else, attention to catching QC issues has seemed to sporadically suffer during the huge manufacturing spurts of the last few years. It would probably have been even worse if more of the equipment hadn't been the newest self-monitoring equipment.

Another area of "slippage", according to what I've heard from some different folks in the industry (as an armorer, listening to water-cooler type chatter), may have been failures to clearly and effectively communicate between depts in companies, or among vendors. Some occasional examples that have slipped out have been of the "You've got to kidding me?!?" sort, too.
 
buckhorn_cortez said:
Hardly "stunning." Jewelry is priced on "keystone" or 100% markup every time it gets sold. The manufacturer sells it to a wholesaler = 100%. The wholesaler sells it to the distributor = 100%. The wholesaler sells it to the retailer = 100%. The retailer sells it to the customer = 100%. Now - THERE'S a "stunning" markup from the manufacturer to the end customer.
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So comparing guns to a cherry-picked jewelry proves exactly what? Why not compare guns to something that makes more sense like name-brand power hand tools or a multitude of sporting goods? I guess that wouldn't serve your agenda, would it?

buckhorn_cortez said:
I worked for an engineering firm. My base rate was figured on my raw hourly rate + fringe benefits + overhead. The base rate was then marked up 2.5x to the end customer. A friend worked for one of the National Laboratories - his time was marked up 3.5x above his base rate.
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And that relates to guns in what way? If you want some real snazzy numbers, go ask your dentist for his P&L, but then again, it has nothing to do with firearms.

buckhorn_cortez said:
Please - just stop with your figuring of what's reasonable in your world. You're not taking into account ALL of the costs because you don't know them. That includes overhead (utilities, insurance, copy paper, toilet paper, coffee, office equipment, etc.), taxes (local, state, federal), production salaries, overhead salaries, materials, fringe benefits, advertising, maintenance, equipment and tooling replacement, product development costs, research and development, design development, prototype development, advertising, sales, leases, rentals, cost of money, cost of inventory, and a myriad of other costs I've probably missed.
Click to expand...

You're wrong. You've clearly never worked in product development/engineering/manufacturing. Just how much R&D do you think Glock spends (or has spent) on its handguns? How much of that is fully amortized at this point? In any event if you were to look at a cost profile from Glock for one of their handguns, it would show the cost of: purchased parts + raw materials + time different cost centers used to make + direct labor + overhead (where all your impressive individual costs are pooled plus a whole lot of others), either for the entire facility or by cost center depending on how their accounting system is set-up. Costing out a G19 isn't rocket science -- well, it may be to you.

It's amusing how people like you make long lists of costs as if they cannot be estimated. They are done every day -- from tiny machine shops to automakers and everywhere in between.

buckhorn_cortez said:
With multiple plants, costs vary by location so you have both an individual and aggregate costs.
Click to expand...

No. You would have costs based on their cost (or profit) center -- be they an individual machine, a department or even an entire factory.

buckhorn_cortez said:
Before you do your simplistic math equation and then declare the number "stunning" - you might want to get real costs before profit. It might surprise you as to how little money is actually being made.
Click to expand...

See above. Your listing of (some) costs may impress some people -- it might even impress you, but they're a non-starter -- just like your jewelry example.
 
fastbolt said:
I've heard production shifts were still running 24hrs at a couple of the companies, at least up through this Spring. Haven't asked since then.
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Yeah, where? And for what product? 24 hour production shifts for discrete manufacturing are fairly uncommon. (difficult to schedule maintenance, housekeeping and direct labor under those circumstances.) It would be interesting to know who does those.

fastbolt said:
I'd like to fully agree with you about not having QC slip as production increases, but if nothing else, attention to catching QC issues has seemed to sporadically suffer during the huge manufacturing spurts of the last few years. It would probably have been even worse if more of the equipment hadn't been the newest self-monitoring equipment.
Click to expand...

If you're worried about "catching QC issues" then you're already a crummy company. Gotta prevent, not catch.

fastbolt said:
Another area of "slippage", according to what I've heard from some different folks in the industry (as an armorer, listening to water-cooler type chatter), may have been failures to clearly and effectively communicate between depts in companies, or among vendors. Some occasional examples that have slipped out have been of the "You've got to kidding me?!?" sort, too.
Click to expand...

OK.
 
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