I've always wondered how much it costs them to create the things we buy. I'd like to know how much profit they make off some of the most popular weapons. Could it really cost hundreds of dollars to make a glock,beretta,or smith & wesson?
The raw materials, labor cost, energy costs, and other direct costs of each unit if you will. I wouldn't want to ask for all the info. But, if your willing to share I'd love to know.Do you want to know how much the cost is when the investment of money into development, testing, tooling, insurance, company overhead, licenses, etc. is ameliorated into the price of each handgun, or are you just looking for strictly the raw materials, labor cost, energy costs, and other direct costs of each unit?
Wow and they charge 400+ thats a nice profit margin.I'd wager that you'll have a difficult time finding that exact information due to a variety of reasons (companies protect this kind of data). But as an example, I believe the average Glock pistol costs around $60 to produce.
Very true, on higher level of running the entire business and such it seems kinda small of a profit but on a I have all the parts and stick em together for 60$ and charge you 550$ I would be a bandit. Can't forget you pay for the brand too which is the same across all sales. Nikes will always be expensive compared to a less known brand.Break it down.
Facilities cost. How much does it cost to own a chunk of land, put machinery on it, water and electricity, and taxes.
Non Recoverable Engineering. How much did it cost to design the thing?
Test: How much did it cost to test the prototype design?
How much for the touch labor?
I met in the pits at Camp Perry, the production manager for a Chrysler transmission factory. He said it cost $800 million to seamlessly change 13% of the parts in one transmission.
I don’t see how you can buy a small firearms manufacturing plant for less than $100 million, at least.
And that development of a new firearm will cost at least $30 million.
Quote:
Originally Posted by signalzero
I'd wager that you'll have a difficult time finding that exact information due to a variety of reasons (companies protect this kind of data). But as an example, I believe the average Glock pistol costs around $60 to produce.
Wow and they charge 400+ thats a nice profit margin.
I believe the average Glock pistol costs around $60 to produce.
Wow and they charge 400+ thats a nice profit margin.
But the BusinessWeekstory says Glock estimated its "profit margin per pistol" at 68 percent. And consider a major Glock competitor: Massachusetts-based Smith & Wesson, established back in the 1850s. The company's last annual report cites a gross margin of 32 percent.
The company does cite two big hurdles to business, though. The first: federal and state laws. "Compliance with all of these regulations is costly and time consuming," the company writes. "Although we take every measure to ensure compliance with the many regulations we are subject to, inadvertent violation of any of these regulations could cause us to incur fines and penalties." The second: lawsuits. "We are currently involved in numerous lawsuits, including a law suit involving a municipality, a securities class action lawsuit, and two purported stockholder derivative lawsuits," it notes, dryly. That seriously cuts into the bottom line.
the average Glock pistol costs around $60 to produce.
Wow and they charge 400+ thats a nice profit margin.
...there will be some fine reputable companies that operate fairly within the general regulations/principles of supply and demand and those companies that try and gouge customers as well.
If you mean by gouging that they charge the maximum amount the market will pay, that is capitalism. It's the whole point.
Well I only used glock as an example. I've seen some pretty expensive ak's as well.IMO, the cheap guns are AK's. The Kalishnikovs were a "people's gun" that were low-technology stamped metal parts on a tough but not as accurate rifle. Even a third world country could pound them out, they are cheap to manufacture, thus they are favored by developing countries.
If you think that Glock is making an obscene profit, buy shares in their company and become rich.
Never looked at it like that. Even tho they aren't making tons on one product I'm fairly certain they are doing fairly well in the grand scope of things.The domestic gun market is so fractured and so diverse, it is difficult to see how any manufacturer could be making large (percentage) profits. There are so many suppliers competing for the same dollars that if someone comes out with a hit product, another manufacturer will surely try to replicate the success. Costs that go into running the business that are not always considered but are usually very significant include inventory holding costs, marketing, administration and depreciation of property, plant and equipment to name a few. There is also the cost for product obsolescence and covering the costs of product lines that lost money. Throw in payroll taxes, intellectual property protection legal fees and the list grows. The cost of raw materials, labor inputs and CNC machining centers (amortized over perhaps 10 years) is just a fraction of it.
A gross margin of 68 percent on a cost $60 means that the price achieved by Glock would be $187.50 ($60/(1-0.68). Their net margin would be significantly less with many costs coming out of the $127.50 difference.
holy cow, that is an astonishing amount to get it to you. Tho it seems kinda nice that they would put that much into their service.i once contacted magnum research with an idea for a new revolver, and was quoted something like 300k to get one in my hands. and that is with them already owning he plant and machinery to do it. R&D is very expensive.