How much cheaper can AR parts get?

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GDownRange

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AR-15 parts are at historic lows. How much cheaper can they actually get?

I've never been an AR guy, but I do love guns, and I really like to tinker with things. Prices are so low right now that I'm building an AR as a Christmas present to myself. "Every day" prices are incredibly low, but "promoted prices" can be so low that I have to wonder how much revenue is actually being generated. Is now the time to buy? Will my Christmas gift to myself be the most affordable AR I'll ever purchase? Or will prices continue to drop? How much lower can parts actually go?

As an example, Primary Arms is having a one day sale on Anderson stripped lowers (link below). At $29.99 how much profit could Anderson and Primary Arms be making?

http://www.primaryarms.com/anderson...erm=BANNER_1&utm_campaign=17_10_Ad_18_24_Hour

Can the High Roaders with manufacturing back grounds and/or firearms industry experience chime in? What are the COGS on a stripped lower? Materials, manufacturing, etc. What are the industry margins? 25% for manufacturer, 25% for distributor?

What is the rock bottom price that a stripped lower receiver can be offered to a consumer, and still produce enough net revenue to keep the entire chain turning an acceptable profit?
 
AR prices are coming down and are lower than we've seen in awhile, but they are not at historic lows. Before the Ban, we used to be able to get Colt ARs and AR180s for around $300 at the Pomona Gun Show. Since the Ban, the pieces of ARs, especially Colt ARs, have skyrocketed. I remember seeing pre-ban Colts on the table for over $2500. Post pre-bans (What we now call neutered ARs made before the federal ban went into effect) were selling for close to $2000. Post ban Colts (What we now call ban era) were impossible to find.

The only ARs we saw in any quantity were Armalites, Bushmasters and Olympics. Later, we started seeing Rock Rivers and a couple of others.

Since the Ban, we've been buffeted with a series of attacks on our rights that have impacted availability of ammo and military pattern self loading rifles that have kept prices artificially high. This trend hit its peak when Obama was elected president.

What we're seeing now is a normalizing of the market after years of demand out-stripping supply. Prices have come down, but haven't returned to pre-ban levels. I don't expect they will. Ammo is still expensive compared to pre-ban prices.

That said, you know when old-timers talk about the good old days? That's where we're at now. The Good Ol' Days. Now is the time to buy that favorite rifle, load up on ammo and go shoot. Take your kids shooting.

But you are right. Prices have dropped and I hope they continue to. This is our time in the sun and we should take full advantage of it while it lasts.
 
MistWolf said:
That said, you know when old-timers talk about the good old days? That's where we're at now. The Good Ol' Days. Now is the time to buy that favorite rifle, load up on ammo and go shoot. Take your kids shooting.
Click to expand...
Indeed.
 
MistWolf said:
AR prices are coming down and are lower than we've seen in awhile, but they are not at historic lows. Before the Ban, we used to be able to get Colt ARs and AR180s for around $300 at the Pomona Gun Show. Since the Ban, the pieces of ARs, especially Colt ARs, have skyrocketed. I remember seeing pre-ban Colts on the table for over $2500. Post pre-bans (What we now call neutered ARs made before the federal ban went into effect) were selling for close to $2000. Post ban Colts (What we now call ban era) were impossible to find.

The only ARs we saw in any quantity were Armalites, Bushmasters and Olympics. Later, we started seeing Rock Rivers and a couple of others.

Since the Ban, we've been buffeted with a series of attacks on our rights that have impacted availability of ammo and military pattern self loading rifles that have kept prices artificially high. This trend hit its peak when Obama was elected president.

What we're seeing now is a normalizing of the market after years of demand out-stripping supply. Prices have come down, but haven't returned to pre-ban levels. I don't expect they will. Ammo is still expensive compared to pre-ban prices.

That said, you know when old-timers talk about the good old days? That's where we're at now. The Good Ol' Days. Now is the time to buy that favorite rifle, load up on ammo and go shoot. Take your kids shooting.

But you are right. Prices have dropped and I hope they continue to. This is our time in the sun and we should take full advantage of it while it lasts.
Click to expand...

Does before the ban mean pre-1994? I'm not an inflation expert. How does $300 in 1993 compare to $379 in 2017? My gut tells me the 2017 price is lower.

I completely agree with you on enjoying the current state of things. Build a rifle, buy a rifle. Buy some ammo, roll some ammo. Go to the range solo, take someone to the range. What ever works for you, but get out and shoot. Who knows what tomorrow holds?

Even if I'm off base and parts aren't at all time low, how much lower can parts get in today's dollars?
 
GDownRange said:
Does before the ban mean pre-1994? I'm not an inflation expert. How does $300 in 1993 compare to $379 in 2017? My gut tells me the 2017 price is lower.

I completely agree with you on enjoying the current state of things. Build a rifle, buy a rifle. Buy some ammo, roll some ammo. Go to the range solo, take someone to the range. What ever works for you, but get out and shoot. Who knows what tomorrow holds?

Even if I'm off base and parts aren't at all time low, how much lower can parts get in today's dollars?
Click to expand...


According to the BLS.gov inflation calculator, $300 in 1994 is about $506 today, though depending on how you choose to calculate it can range from ~$480 to ~$520. So I would probably say, yeah now's a good time to buy.
 
GDownRange said:
Does before the ban mean pre-1994? I'm not an inflation expert. How does $300 in 1993 compare to $379 in 2017? My gut tells me the 2017 price is lower.
Click to expand...
Yes, $300 was worth a lot more back then. But that was $300 for a brand new factory Colt, not a kit. You cannot buy a brand new factory Colt for $300- or $379- today.

Before the Ban does mean before the federal "Assault Weapon" ban. I also include the California Ban which came before. The California Ban became the template for the federal Ban. The anti-gunners had a policy of "California First". They would use California as the test case for anti-gun legislation. If they could get it passed in California, they would then try to get it passed at the federal level.
 
GDownRange said:
Can the High Roaders with manufacturing back grounds and/or firearms industry experience chime in?
Click to expand...
I'm by no means an expert but it's supply and demand as usual. A friend of mine had a bunch (50-70) M16 full auto lowers made in China a few years ago and they were $15-ish each, shipped, taxed, ready to assemble, with no fitting or adjusments required. The effect of mass production is amazing too, and I can't imagine a more fiercely competed market than AR parts is these days.
 
GDownRange said:
AR-15 parts are at historic lows. How much cheaper can they actually get?

I've never been an AR guy, but I do love guns, and I really like to tinker with things. Prices are so low right now that I'm building an AR as a Christmas present to myself. "Every day" prices are incredibly low, but "promoted prices" can be so low that I have to wonder how much revenue is actually being generated. Is now the time to buy? Will my Christmas gift to myself be the most affordable AR I'll ever purchase? Or will prices continue to drop? How much lower can parts actually go?

As an example, Primary Arms is having a one day sale on Anderson stripped lowers (link below). At $29.99 how much profit could Anderson and Primary Arms be making?

http://www.primaryarms.com/anderson...erm=BANNER_1&utm_campaign=17_10_Ad_18_24_Hour

Can the High Roaders with manufacturing back grounds and/or firearms industry experience chime in? What are the COGS on a stripped lower? Materials, manufacturing, etc. What are the industry margins? 25% for manufacturer, 25% for distributor?

What is the rock bottom price that a stripped lower receiver can be offered to a consumer, and still produce enough net revenue to keep the entire chain turning an acceptable profit?
Click to expand...
Will these lowers be suitable to build a .308 AR-10 style rifle?
 
The OP's question is one that people ask everyday, and for every commodity.

Should I buy that stock now? What if I am buying at the top of the market? Should I invest in that commodity? Will it be cheaper tomorrow?

If you knew the answer you would soon be a multi-billionaire.
 
Coming from a manufacturing world I honestly don't think it's possible to make an American made AR any cheaper than they are now. I can't imagine anybody is making any money at 29.99 for a stripped upper.

I think ammunition prices and reloading components are still highly inflated.
 
I thought I was doing good last year at $40 for an Anderson lower. At $30, if nothing more at that price it would make an interesting paper weight.
 
$30 is a dang good price. I built two Anderson lowers for the kids and they worked fine. Paid somewhere around $60 to $80ish apiece IIRC.
 
GDownRange wrote:
At $29.99 how much profit could Anderson and Primary Arms be making?
Click to expand...

Don't confuse the price at which some retailer is selling overstock merchandise purchased from a distributor with what the manufacturer was paid.

The raw material cost of the aluminum billet from which a lower receiver is made is pennies per pound depending on whether the manufacturer is buying in bulk according to a long-term contract, buying on the spot-market or is buying unsold material the supplier still has on hand. The cost of a lower is in the cost of the machine time, operator time, amortization of the machine and the facility it is in, record-keeping, stocking, shipping and regulatory compliance.

Price is the amount an item will transfer between a buyer and seller. Cost is the total of all expenditures made in creating the item. The two are only notionally related in that the manufacturer must - in the main - cover their cost in order to remain in business. Distressed businesses sell below cost all the time.
 
I just finished my second build. Last year I built a coyote/varmint specific AR on an Anderson lower with mostly parts from PSA. I did it around Christmas and used only daily deals. You have to be quick, but I made my rifle for around $490.00 not counting the scope.

I started the second build to honor the memory of my dad who was a vet. I wanted an M16 Rifle clone, with a detachable carry handle. I started again with an Anderson lower and went with a PSA A2 1/7 Freedom Upper, PSA premium BCG, standard charging handle, UTG A2 buffer tube, buffer and stock combo that was on sale (PSA's was too grey) and a Bushmaster enhanced lower kit that was on sale. I didn't have to wait for Christmas this year and assembled it for 409.00 at my kitchen table. I already had a carry handle.This is without tax. It is a great time for AR's.
 
hdwhit said:
Don't confuse the price at which some retailer is selling overstock merchandise purchased from a distributor with what the manufacturer was paid.

The raw material cost of the aluminum billet from which a lower receiver is made is pennies per pound depending on whether the manufacturer is buying in bulk according to a long-term contract, buying on the spot-market or is buying unsold material the supplier still has on hand. The cost of a lower is in the cost of the machine time, operator time, amortization of the machine and the facility it is in, record-keeping, stocking, shipping and regulatory compliance.

Price is the amount an item will transfer between a buyer and seller. Cost is the total of all expenditures made in creating the item. The two are only notionally related in that the manufacturer must - in the main - cover their cost in order to remain in business. Distressed businesses sell below cost all the time.
Click to expand...

Not to mention that sometimes you're better off liquidating inventory and carrying a loss over into the next year.
 
With over 40 years of manufacturing under my belt from heavy machining to micro devices I can say for certain that 30 dollar's does not buy much machine time.
Add the cost of material, forging, machining, inspection, and finish makes this a losing profit part. The money is made selling the rest of the rifle.
 
sugerwater said:
With over 40 years of manufacturing under my belt from heavy machining to micro devices I can say for certain that 30 dollar's does not buy much machine time.
Add the cost of material, forging, machining, inspection, and finish makes this a losing profit part. The money is made selling the rest of the rifle.
Click to expand...

When a high speed CNC can gang mill forgings at an aggregate of just a few minutes each and then huge batches go into the anodizing tanks, there can still be a profit selling dirt cheap. Economy of scale. That's why the boutique billet lowers are still expensive.
 
The real illuminating fact is how badly the consumer has been getting hosed over the last few years. A few years ago, a Colt 6920 was running $1100. Now, they are in the $700 range. If companies can still make a healthy profit selling their products at much lower margins, imagine how fat they were getting at or near MSRP. Its not like their ability to produce them has changed much in recent years. Free market in effect, but still seems interesting.
 
Jackal said:
The real illuminating fact is how badly the consumer has been getting hosed over the last few years.
Click to expand...
Not really hosed. It's supply and demand. Ever tried to find the hottest selling toy of the season around Chrismas for a reasonable price? Back in the day when outsourcing the manufacturing of some labor-intensive (albeit luxury) items to the Far East wasn't common I could markup them by up to 1000%+ and they still sold like hot cakes. Free market fixed that anomaly, too.
 
Jackal said:
The real illuminating fact is how badly the consumer has been getting hosed over the last few years. A few years ago, a Colt 6920 was running $1100. Now, they are in the $700 range. If companies can still make a healthy profit selling their products at much lower margins, imagine how fat they were getting at or near MSRP. Its not like their ability to produce them has changed much in recent years. Free market in effect, but still seems interesting.
Click to expand...

Now apply that logic to Glocks:eek:
 
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