Have we hit bottom?

I can't possibly imagine that there is any more margin left to loose selling ar15's for $300. At least when manufactured in this country.

It's possible that everybody who wants an AR --- or two or three -- already has it. I think it's likely that people are buying the no-frills models and then spending their disposable income adding frills to them.

The law of supply and demand will eventually turn this around.

There has been a historic high demand for this item. Companies have work to meet that demand to the point that just about anyone that wants one has one or more thus driving the price down.

If / when sales begin to diminish or the profit margin falls too far the same companies will decrease the supply or offer only higher end models with a better profit margin thus driving prices up again.

The manufactures want to stay in business. Eventually the marketplace will reach an equilibrium but the days of the $300 AR are numbered.

All of the economics 101 stuff aside. I have ask myself, is a cheap rifle with a bunch of plastic parts is something that I want at any price? For me personally, I have always tried to obtain only the best for my safe even if it means doing without for a while. Craftsmanship, reliability, and quality being key factors in the decision. It was these qualities along with historical significance that attracted me to this in the first place.

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There are many companies already losing money on their ARs, either by selling under cost, or by sitting on inventory thats getting more and more stale.

Distributors are giving away stuff just trying to keep their heads above water....and many are sinking....along with many dealers who are hurting, partly because summer is traditionally slow anyway and now with sales really super slow....there will be some that wont survive.

How many people are going to buy an AR-15 style rifle?

There is a large percentage of the population who, because of legal restrictions or personal beliefs, will NEVER own one.

The balance of the population that COULD own one and WANT to own probably already have one, or two, or three...

That leaves the COULD own, but don't yet and want to buy now. That is not a large number in the current climate.

Business models developed during a "panic" are seldom successful long term.

I think many of the makers/assemblers will go away unless the prices go up soon. Then, I think prices may start to rebound. Next election cycle may also put a fire under the market. Really hard to say.

How many polymer 9mm handguns are being cranked out?

How many people buy Glocks and then spend more money add trinkets to them then the gun cost?

ARs are Tinker Toys for Big Boys!

Ohen Cepel said:

I think many of the makers/assemblers will go away unless the prices go up soon. Then, I think prices may start to rebound. Next election cycle may also put a fire under the market. Really hard to say.

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At the very least there will be a market bubble in the months leading up to the election if the results are at all in question, as they likely will be. If a Democrat wins, expect that to turn into a panic market. If they take the WH and the Senate, it will be chaos.....right up until they are banned.

I should buy a few more now. All four of mine just fell off the boat.....

I think many don’t realize how inexpensively parts can be manufactured. Anyone remember the T/C Hotshot .22 Youth model? It was a scaled down version of the Encore Pro Hunter that reached a street price of $150. The Pro Hunter started life with a street price of nearly a grand and still commands roughly $700 with economy of scale on its side by comparison.

That tells me that a once $1,000 rifle is probably produced for under $100, and that ARs, with their outsourced receivers/barrels/lpks/ furniture and the like probably enjoy a reasonable profit margin as well. I’d also bet most people aren’t in the $300 market but rather the $500-$700 arena where quality, performance, and features attract more buyers.

toivo said:

It's possible that everybody who wants an AR --- or two or three -- already has it. I think it's likely that people are buying the no-frills models and then spending their disposable income adding frills to them.

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There are 4 million people born every year in the US, and more of the new ones are into ar15’s than the ones they are replacing, so I don’t think we have to worry about running out of new people to sell rifles too.

I don't see the basic ones getting much cheaper, at least not for one that isn't total trash. In the late 80's, trashy ones were in the $450 range at gun shows.

(A lot of stuff about inventory, free cash flow, manufacturing costs and political prognosticators being wrong DELETED)

I’ll just say, appreciate it now, because it won’t last.

So yes, rock bottom

I would say without a doubt we are at the absolute rock bottom prices for ARs. I tell everyone that I know that they are crazy if they have not stocked up on ARs right now. As a dealer, I can't possibly see how AR prices can go any lower and manufacturers still produce a profit.

illinoisburt said:

The AR market pretty much cratered after the last election and a bunch of smaller companies have folded. A bunch of retailers have stock 223/556 rifles well under $500 and some large volume vendors are selling complete upper/lower combos for under $300 (plus shipping and FFL fees). It seems these no frills milspec guns seem to all work, though obviously there are better available if folks feel like getting more than the basic commodity AR. I cannot see firms being profitable at much lower price points without huge volume sales. Do you think prices have found the floor or is there still room to go down?

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When you hit rock bottom you need to go to AA (AR-15's Anonymous}, they will have you go through a 12 step program:

The 12 Steps are:

1. We admitted we were powerless over buying firearms
—that our lives had become unmanageable.

2. Came to believe that a caliber greater than 5.56 could restore us to sanity.

3. Made a decision to turn our will and our lives over to the care of our firearms instructor as we understand them.

4. Made a searching and fearless moral inventory of our firearms.

5. Admitted to our significant other, to ourselves, and to another human being the exact inventory of our firearms.

6. Were entirely ready to have GunsAmerica remove all these AR-15s from our gun safes.

7. Humbly asked GunsAmerica to remove our listings.

8. Made a list of all targets we had missed, and became willing to make amends to them all.

9. Made direct amends to such practice scenarios wherever possible, except when to do so would injure anyone.

10. Continued to take firearms inventory and when we were wrong promptly admitted it on THR.

11. Sought through practice and research to improve our conscious contact with firearms, as we understand them, practicing only for knowledge of firearms for us and the power to carry them.

12. Having had a spiritual awakening as the result of these Steps, we tried to carry this message to gun control fanatics, and to practice these principles in all our affairs.

The cheap stuff has bottomed out. Some of the more expensive offerings will get a little less expensive as there is more profit in those firearms.

I have started thinning my AR herd. I am down to one 5.56 and one 22lr ARs'. The last three rifles I have purchased have been two bolt-actions(.44mag and .22tcm) and a pump-action (.22lr).

I mention this to make the point that I already have what I want. I am now at the point that I occasionally pick up a "novelty" gun. I can't be the only person in this same place. I do realize that some mid-size manufacturers (Windham & PSA come to mind); but, as others have mentioned, the margin is probably pretty slim.

About the only thing, I can think of, for the manufacturers is to push some AR shooting events and to try to draw more people into those events. Make the events "newbie" friendly. This might pull the owners up in the food chain to more expensive models.

AR’s are a great rifle but they have no soul; modular and metallic, they are cold plastic and very sci-fi - they are more tool-like than the stuff of the past.
I have one AR that was adopted by my wife; almost no recoil, dependable and very accurate - it does everything right but it is a cold machine. I like owning it and I would like to have another but I do not know why. Great and simple design to reproduce and they all do the same thing well - might even fall into the category of boring.

Steve S. said:

AR’s are a great rifle but they have no soul; modular and metallic, they are cold plastic and very sci-fi - they are more tool-like than the stuff of the past.
I have one AR that was adopted by my wife; almost no recoil, dependable and very accurate - it does everything right but it is a cold machine. I like owning it and I would like to have another but I do not know why. Great and simple design to reproduce and they all do the same thing well - might even fall into the category of boring.

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I have no love for a standard 5.56 collapsible stock 16" carbine, but this 7.62x39 is a warm and snuggly friend. I am as fond of it as any other rifle I own.

I don't see how a plain M4 clone can get any cheaper.

Granted this is 20 years ago and jewelry rather than firearms but perhaps it will illustrate the point that we as consumers don’t always have an accurate insight into industry costs.

20 years ago I worked for a department/jewelry store. A once a year promotion called the “Gem Dig” would bring in thousands of customers because the store offered them the chance to “dig” through a wheelbarrow full of cut and polished 1ct. stones from citrines to sapphires. They could keep any stone of their choosing, free of charge (we made money on the mounts- necklaces, earrings, rings).

Those genuine gemstones were purchased at a cost of 3 1/2 cents each. Not $50. Not $150. Not $600. Pennies. Now I don’t know what it costs to produce a trigger when you stamp out 100,000 a year or roll pins or even aluminum receivers, but my bet would be no more than half of street price for those who just assemble and even less for companies like PSA who produce many of their own components.

Over 10,000 Americans turn 18yrs old every day, and, statistically, somewhere around 25% of them will purchase a firearm. That’s 2,500 Americans who might buy an AR-15... every... day...

I still dont have one, but im AR curious. Everytime I find a good deal it seems im broke. Im waiting til they cost $200 lol. I havent much use for a 5.56, but I could easily pull the trigger on a .450 bushmaster, .458 socom, or 50 beowulf. These big bore ar’s dont seem like they have gotten any cheaper the last few years. Like roughly $800 and up where I live. Anyone think these will drop in price?

Prices of AR's are going to go up as the election heats up and their legality becomes an issue. Stock up on them now. If you can't afford complete guns, buy stripped lower receivers.

Whether not not we have hit the very bottom remains to be seen, but I think we are getting close. And new shooters turn 18 every day and buy guns. Markets not drying up.
I think skylarbone is right, there are huge margins in mass manufacturing. Remember the sks's that were being sold in the 90s for $75? Manufactured, shipped across the world, sold to an importer, sold to a guy at a table at a gun store, then sold to you, and everybody made a profit. This is speculation, but I bet Glock has about $35 tied up in making a pistol. Norinco probably had about $20 in the sks's.

But to the op's point, prices are low, and I think that 20 years from now we will all be saying," remember when you could get an AR for 300-400 bucks? Wow. I wish I had bought 50 now that they're banned/regulated by the nfa and going for $7k/each. And do you remember cellphones?! People carried around a phone in their pocket! Primitives......"