Difference in cost to produce: Glock 17 vs. Marlin Model 60?

[yugorpk]

Having worked in management in manufacturing for a long time I'd say counting overhead such as building, power, labor etc I see $40 to $60 worth of build cost there in a Glock. The Marlin will be higher more because of the economy of scale and extra materials than anything else.

Theres a lot of things that cost a lot less to produce than you think they should. When you are a multi billion dollar company you have a lot of mouths to feed.

Next time your'e eating a $4 bag of chips keep in mind it cost $0.46 to produce including the cost of the bag which is the most expensive component.

 

[Ed Ames]

That would mean that as markets tighten, Glock (and companies making similar products) would have great latitude in cutting prices in order to sustain sales volumes by taking some of their competitors' shares.

That depends on what they see as their market type.

If they see themselves as a commodity, then yes you are right. If, on the other hand, they see themselves as an upscale brand...

Do you know what upscale brands do with product they can't sell at full price? They don't sell it.

I don't think some want to face that reality. They certainly don't when it comes to the AR15 market, but that's another thread...

Yawn.

Econ 101 would also suggest that...

What does econ 101 say about a company like TAG Heuer? They sell a standard product (wrist watch) built of standard components (the guts of a TAG Carrera chrono are a standard valjoux 7750 movement), at a high but not extreme price (the Carrera sells for about $3500, an Accutron brand chrono using the same movement sells for $700, or half that on sale). They aren't a super premium brand (a Patek Philippe with similar features can sell for $75,000).

there would be a slew of serious manufacturers getting into the gun business due to the aforementioned profit margins, the strong sales and fairly lower barriers to market entry. That really hasn't been the case.

Again, look at TAG, Omega, etc... Yes there are constantly new competitors but very few actually compete for the same dollars. LaRrue, Noveske, LMT, etc don't necessarily hurt when DPMS must lower prices.

That's not happening on a large scale because of the restrictions/added costs/impediments, etc. placed on the industry by the gov't. Just imagine what a cordless drill would cost today if the gov't controlled the power tool business as it does guns.

By that logic, once a Casio F-91w ($11 from Amazon) was on the market,the $3500 TAG Carrera would start selling for $350.

There is also the issue about guns being a taboo business ...

You say that, but I still see Duck Commando (or whatever that TV show is) merchandise in major retailers.

Some can continue to fantasize and suggest that gov't gun control and the viewing of guns as a taboo business by many doesn't gravely impact the price of guns. That gun prices are "great" today (compared to what?!?) But in the end it's just that -- fantasy...

You haven't made a compelling case for your position.

 

[Vernon1]

Maybe Daddy Was Right All Along

I think one has to factor in the big one.

The big one is research and development.


I would not even guess what the research and development bill was when Gaston Glock added it all up.


R&D are some wicked money eaters...

Measure twice and cut once is not like bringing a gun like the Glock line to market.....

A famous man was asked how much did his yacht cost?

He replied, "If you have to ask you are unable to afford one."

 

[yugorpk]

That Glock initial ROI and R&D workup has long been amortized away. Remember this is a gun introduced in the early 80's. Current production pistols might see a tweak here and there for different calibers and such but the actual manufacturing cost of the current pistols is more than likely well in the double digits.

 

[Aragon]

Having worked in management in manufacturing for a long time I'd say counting overhead such as building, power, labor etc I see $40 to $60 worth of build cost there in a Glock. The Marlin will be higher more because of the economy of scale and extra materials than anything else.

Having also worked in manufacturing management for many years I would suggest this:

* Both the Marlin and the Glock enjoy great economies of scale. In other words, both companies sell a great deal of each product. Even though the G17 frame is used for other Glocks, the G17 is the only huge seller that uses it. And even though common small parts are used on several Glocks, I don't see a large overall difference in the ultimate cost of the parts.

* OH is OH. Neither firearm is built in an extremely inexpensive place to manufacture like China or India. One is built in Kentucky, the other largely in Georgia. Neither is highly direct labor intensive and neither is greatly larger than the other in this context.

Theres a lot of things that cost a lot less to produce than you think they should. When you are a multi billion dollar company you have a lot of mouths to feed.

OK.

Next time your'e eating a $4 bag of chips keep in mind it cost $0.46 to produce including the cost of the bag which is the most expensive component.

That would depend on the bag and the type of chips...

 

[Aragon]

That Glock initial ROI and R&D workup has long been amortized away. Remember this is a gun introduced in the early 80's. Current production pistols might see a tweak here and there for different calibers and such but the actual manufacturing cost of the current pistols is more than likely well in the double digits.

The original R&D work for both firearms has long been amortized as you say.

Both designs have been refined and I'm sure both have required new tooling along the way -- with or without changes to the product design, but neither is saddled with paying off huge design investments.

 

[yugorpk]

That would depend on the bag and the type of chips...

Most Frito Lay products Family sized bag $0.30-$0.35 per package unit not counting film waste from bags that didnt make it. The Oil is the next most expensive commodity at anywhere from $0.20 to $040 per pound of material produced. Then the seasoning and finally the potatoes/masa. High side $0.80 per large bag. That does not include salaries,overhead etc. Just the companies cost of materials. Decent margin to be sure if you factor in an additional $0.80 lb overhead and labor costs per unit. Nowhere near as good as the coffee business though.

As far as the guns go the vast majority of the components are CNC's and investment cast with little labor involved. The Austrian labor costs, which I am not aware of are surely higher than the US costs. I get the feeling we are Austria's China.

 

[dogtown tom]

Troll thread

 

[Onward Allusion]

Price is always driven by the market. If people are willing to pay $550 for a Glock, why would the mfr/dist/shop sell it for less?

 

[yugorpk]

Absolutely. It makes no difference whatsoever what something costs to produce. It is what that market will bear that matters.

 

[Aragon]

Most Frito Lay products Family sized bag $0.30-$0.35 per package unit not counting film waste from bags that didnt make it. The Oil is the next most expensive commodity at anywhere from $0.20 to $040 per pound of material produced. Then the seasoning and finally the potatoes/masa. High side $0.80 per large bag. That does not include salaries,overhead etc. Just the companies cost of materials. Decent margin to be sure if you factor in an additional $0.80 lb overhead and labor costs per unit. Nowhere near as good as the coffee business though.

As far as the guns go the vast majority of the components are CNC's and investment cast with little labor involved. The Austrian labor costs, which I am not aware of are surely higher than the US costs. I get the feeling we are Austria's China.

There is a company here locally that makes tortilla chips. I happen to know the bags cost $.11/each a number of years ago. It's still the same bag so let's be generous and call it $.17/each today.

I suspect the energy used to power the mixer and Fryolater used to make the chips is $.17/bag. Add in the direct labor, OH and direct materials and the contents costs considerably more than the bag -- although still not a lot.

The Marlin is made in Kentucky and the Glock is largely made in Georgia these days. Production costs/hour would be comparable.

I don't believe the Glock 17 has any IC parts -- it might, but I doubt it. It might have some MIM parts though. Same for the Marlin.

 

[Aragon]

Absolutely. It makes no difference whatsoever what something costs to produce. It is what that market will bear that matters.

That would depend on the goods being produced. Tell your theory to low-margin, commodity manufacturers beating their brains out that their costs don't matter...

 

[Aragon]

Price is always driven by the market. If people are willing to pay $550 for a Glock, why would the mfr/dist/shop sell it for less?

Because the market for Glocks at $550/each might be xx,xxx units and the market at $450.00 might be x,xxx,xxx units...

 

[Aragon]

That depends on what they see as their market type.

If they see themselves as a commodity, then yes you are right. If, on the other hand, they see themselves as an upscale brand...

Do you know what upscale brands do with product they can't sell at full price? They don't sell it.

There are tiers between commodity and upscale brands -- of which Glock is neither. Nice try with the false dichotomy...

What does econ 101 say about a company like TAG Heuer? They sell a standard product (wrist watch) built of standard components (the guts of a TAG Carrera chrono are a standard valjoux 7750 movement), at a high but not extreme price (the Carrera sells for about $3500, an Accutron brand chrono using the same movement sells for $700, or half that on sale). They aren't a super premium brand (a Patek Philippe with similar features can sell for $75,000).

Now you're trying to insert new variables into my original posting. You're not happy with Glock and Marlin. Now you want to include Korth and Holland & Holland. Stop trying to obfuscate and focus on the actual discussion...

Again, look at TAG, Omega, etc... Yes there are constantly new competitors but very few actually compete for the same dollars. LaRrue, Noveske, LMT, etc don't necessarily hurt when DPMS must lower prices.

Your point?

By that logic, once a Casio F-91w ($11 from Amazon) was on the market,the $3500 TAG Carrera would start selling for $350.

If you honestly believe that then you need to learn how to think in a critical manner...

You say that, but I still see Duck Commando (or whatever that TV show is) merchandise in major retailers.

Duck Commander isn't a gunmaker. It lends its name to Mossberg but it doesn't make or sell guns. More obfuscation...

You haven't made a compelling case for your position.

LOL!! Nor have you! All you're trying to do is add bunkum that has nothing to do with the original discussion. Your attempts at obfuscating are noted -- and rejected.

Time to make an addition to the list...

 

[Ed Ames]

Because the market for Glocks at $550/each might be xx,xxx units and the market at $450.00 might be x,xxx,xxx units...

Do you know the term for the concept you are referencing?

There are tiers between commodity and upscale brands -- of which Glock is neither. Nice try with the false dichotomy...

You can't claim credit for a "nice try" by unilaterally declaring something a thing it isn't. There is no false dichotomy and you made a lousy try. Doubly lousy because you referenced the very concept that refutes your "dichotomy".

There are tiers. Tiers are relative. Cobra Firearms is on one tier. Marlin is on another. Glock is on another. Relative to Cobra, Marlin is upscale. Relative to Marlin, Glock is upscale.

Now you're trying to insert new variables into my original posting. You're not happy with Glock and Marlin. Now you want to include Korth and Holland & Holland. Stop trying to obfuscate and focus on the actual discussion...

You are incorrect. Again. I didn't mention Korth or Holland & Holland. I discussed a concept relevant to your question, but which doesn't support your point. Rather than understanding the analogy and accepting that your preconceived notions may be wrong, you are engaged in rhetorical games.

again, look at relative luxury brands...

Your point?

Narrowly: that, as a result of market stratification, price elasticity can be non-uniform across outwardly identical products due to brand positioning. Broadly: That price elasticity is just one part of profit maximization strategy.

If you honestly believe that then you need to learn how to think in a critical manner...

I am trying not to be too critical because I understand that you are an abuse victim lashing out at the world as you know it.

Duck Commander isn't a gunmaker. It lends its name to Mossberg but it doesn't make or sell guns. More obfuscation...

A thing isn't obfuscation simply because you have a short memory.

Duck Command[er,o] was the focus of public scandal due to someone considered a spokesperson of theirs talking about taboo subjects. So they are a perfect example of what you were talking about, businesses that are violating taboos. There were calls to remove DC branded products from store shelves and everything. It blew over.

Now, back to that California thing for a moment... You perceive guns as taboo because of where you live. I understand that because I lived there too. And they are, where you live. Hunting, guns, a lot of things are taboo where you live. That doesn't mean they are taboo in the USA as a whole.

Manufacturing guns in Texas, Georgia, Kentucky, or the like is about as taboo as ice cream.

LOL!! Nor have you! All you're trying to do is add bunkum that has nothing to do with the original discussion. Your attempts at obfuscating are noted -- and rejected.

If you are interested in understanding the topic you are bringing up, you should drop that pretence and go back and re-read what I wrote. It is very relevant and absolutely on point to your original discussion. If you are just trying to support your preconceived notions, carry on.

Time to make an addition to the list...

Oh dear.

 

[45_auto]

I've been a manufacturing engineer for almost 30 years, with financial responsibility for multiple multi-million dollar projects (if you think firearms are heavily regulated, you won't believe what you have to jump through to build rockets and missiles).

The fact that the OP can't tell the mechanical difference between a Marlin Model 15 bolt action (Post #1 schematic, he calls it a Marlin Model 60) and a Marlin Model 60 semi-automatic seems to pretty much sum up his knowledge of guns, manufacturing, and economics.

 

[dogtown tom]

Aragon...Now you're trying to insert new variables into my original posting. You're not happy with Glock and Marlin. Now you want to include Korth and Holland & Holland. Stop trying to obfuscate and focus on the actual discussion...

Aren't you the one that brought power tools into a discussion of firearms?

The OP continues to entertain.

 

[JR47]

It DOES seem to belittle the thread when the OP can't actually tell the difference between a bolt-action, and the semi-auto he references.

If that basic a premise is missed, how does one expect the onslaught of argumentative blather to be any more correct?

Also, as California's restrictions now prevent sales of most handguns in the state, the cost of doing business IN the Moonbeam state won't be effecting anything in other states. Can't sell it, won't be making any effort to meet restrictions.

Face it, even transportation costs can be brought up as "affecting the costs overall". Too many minutia, and not enough actual discussion of the difference in cost between that Marlin Model 15, and the Glock.

 

[oneounceload]

And he has never answered either of my posts/questions/challenges.

I smell a troll.............

 

[Aragon]

I've been a manufacturing engineer for almost 30 years, with financial responsibility for multiple multi-million dollar projects (if you think firearms are heavily regulated, you won't believe what you have to jump through to build rockets and missiles).

Like it or not, guns are HEAVILY REGULATED. That fact is not changed because other goods are even more regulated. Nice try with the logical fallacy.

The fact that the OP can't tell the mechanical difference between a Marlin Model 15 bolt action (Post #1 schematic, he calls it a Marlin Model 60) and a Marlin Model 60 semi-automatic seems to pretty much sum up his knowledge of guns, manufacturing, and economics.

It's clear you can't think in a critical manner yet you have been a "manufacturing engineer for almost 30 years, with financial responsibility for multiple multi-million dollar projects"? That's pretty amazing and/or sad.

The fact that I cut-n-pasted the wrong URL (after having posted a correct one which was "fuzzy") does not "sum up his knowledge of guns, manufacturing, and economics." Sad to see such an experienced ME reach such an erroneous conclusion given the information provided.

 

[Aragon]

It DOES seem to belittle the thread when the OP can't actually tell the difference between a bolt-action, and the semi-auto he references.

If that basic a premise is missed, how does one expect the onslaught of argumentative blather to be any more correct?

Also, as California's restrictions now prevent sales of most handguns in the state, the cost of doing business IN the Moonbeam state won't be effecting anything in other states. Can't sell it, won't be making any effort to meet restrictions.

Face it, even transportation costs can be brought up as "affecting the costs overall". Too many minutia, and not enough actual discussion of the difference in cost between that Marlin Model 15, and the Glock.

Your posting reflects poorly on you. You attack me rather what I have posted. Shame on you.

Pasting the wrong URL is not a "premise." You need to look that word up. Odd how long it took for someone to find the mistake...

Don't focus on CA's laws. There are many other states with arcane gun laws as well. They all serve to complicate things and increase costs for manufacturers and distributors. Then again your "moonbeam" comment suggests you're intentionally trying to be rude...

What "transportation costs" do you speak of? The differences between Kentuckly and Georgia? Really?

You're right about one thing. There is very little discussion about the two firearms and the great differences in their costs vs. prices.

 

[aeriedad]

The fact that I cut-n-pasted the wrong URL (after having posted a correct one which was "fuzzy") does not "sum up his knowledge of guns, manufacturing, and economics." Sad to see such an experienced ME reach such an erroneous conclusion given the information provided.

So is it that hard to say, "Oops, I made a mistake" here? How does the fact that 45_auto caught your mistake call into question his credentials as an engineer?

 

[lysanderxiii]

I'll wager the cost to make a Marlin bolt action .22 LR is a lot cheaper to make than a Glock, just looking at the machining time alone....

 

[Aragon]

So is it that hard to say, "Oops, I made a mistake" here? How does the fact that 45_auto caught your mistake call into question his credentials as an engineer?

I admitted my mistake and changed the image.

I question his credentials as an "engineer" based on the incorrect conclusions he reached about me based on me posting an incorrect URL.

 

[Aragon]

I'll wager the cost to make a Marlin bolt action .22 LR is a lot cheaper to make than a Glock, just looking at the machining time alone....

LOL!!! How much do you want to wager?

Other than the Glock's slide (a fairly simple hog-out), I don't see a great deal of "machining time" on the Glock -- at least not a lot more than the Marlin 60, including the barrel.