Is the gun industry like Exxon-Moblie right now?

[Big Mike]

This is a serious question that I have, related to the market conditions that seem to be present. Regarding the huge net profit by EM, I got to thinking about how the gun industry benefits from the anxiety that seems to be tied to the political races.

I assert that as a person not in the gun industry, but as a customer, that they more likely than not, have better business (more sales) when there are threats of regulation or actual regulation than when there isn't.

Consider the AWB of 1994. I understand that the regulation that reduced the size of a magazines capacity drove the industry to engineer a product that meet the legal standard of the day, 10 rounds. Hence, we saw a market with new pistols that were enginered for this capacity. Even if not 10 rounds, there seemed to be a lot more choices of pistols out there designed predominantly for concealed carry.

Fast forward to today. How many ads, posts and talk is out there today projecting doom for gun owner if candidate "A" or "B" is elected?

I see, "Buy it while you can!", "Fire Sale, buy NOW!", Don't let "!?!" take your guns, SALE!" much more lately, and I can't help but feel the pull (push?) of considering the language and reaching for the wallet. But then I think...ammo is more expensive now than a year ago, I don't see any lower prices on any handguns/rifles I've looked at recently (even used are not as cheap as they've been, here on FL), even police trade-in pistols are not the deals they once were just a couple years ago.

In a slower economy, prices usually flatten, then drop. But consider the market conditions again, and I surmise the message out there by many is driving anxiety up with the prices. I'll say to that as far as I can tell, the market is saturated with weapons citizens can buy. Here I'm drawing a loose comparision to oil and fuel prices.

I respect someone's right to own a business and make money, but can you give a brother a break?

Note: I have no plans to buy/horde higher capacity magazines or semi-automatic assault weapons currently legal. I'd like to reload to avoid the whole retail ammo thing, but I haven't brought myself to get into it yet.

Thoughts? Mike

 

[tetris]

Buying some extra high cap magazines probably makes sense, especially if you don't have any or many yet. As for buying extra rifles, just get an extra AR-15 stripped lower for $120. Just a nice insurance policy for minimal expense. Its not like anybody really needs anything better than an AR-15 setup, given the customization and availability of gas piston uppers.

As for the market tactics you describe, I completely agree. They certainly do exploit the uncertainty.

So in summary, I would say just make sure you have everything you need. In other words, a couple of AR-15 receivers, a good carry and full size handgun and plenty of high capacity magazines, and forget about it. Do you really need to own every black semiauto rifle every made??

 

[CypherNinja]

Do you really need to own every black semiauto rifle every made??

No. But I want to.

 

[PTK]

Regarding the huge net profit by EM...

Compare it AS A PERCENTAGE of total sales/profit to other industries. If there weren't so much product to move, that would be an unacceptably low profit.

Just keep that in mind.

I respect someone's right to own a business and make money, but can you give a brother a break?

"Do not do favors for your friends, for your enemies will not buy your products."

In so many words, if you think you can produce things cheaper and sell them at a lower price but similar quality, go for it. No one is stopping you or anyone else from filling that possible gap in the lineup of products.

 

[MAKster]

The firearms industry is not very profitable. All the major companies have been sold in recent years. S&W, Remington, Marlin, Bushmaster, Colt, etc. The firearms industry would kill for the profit that Exxon makes in one day.

 

[Flame Red]

I tend to agree, the FA industry is just not that profitable, and the short profit spike that this election gives them could be more than taken away by the policies His Royal Highness the Prince of Obomination will take away with his taxes or bans.

 

[ar10]

I can't answer for the rest of the country but around here gun sales have gone through the ceiling. They even had a couple of TV news stories on it yesterday.
From what they said people are buying guns now before the election. a large section are buying handguns with women buying the majority of handguns.

 

[salthouse]

I worked in the SW business for 15 years. Profit margins were in the 85% range, oil companies are in the 10-15% range. When I told someone that they countered with the idea that they did not have to buy software so it did not impact them. I reminded them that every company that they buy from does buy SW so they do have to pay for it. I think the firearm manufacturers are probably seeing a bit of a demand increase, but the retailers are able to charge closer to retail for the product so their margins are better. I was at Cabelas in PA earlier in the week, they had a "gun show" last weekend where they sold over 400 firearms. That's a lot for them.

 

[RockyMtnTactical]

Prices aren't up in the gun industry as far as I can tell, even though sales are through the roof.

 

[Olympus]

I don't know about gun manufacturers like Smith and Wesson, Taurus, Colt, or Springfield. I don't know what their bottom dollar is and how much profit they turn on their merchandise.

As a consumer, what I can tell you is that in my area their are a lot of gun businesses that are really trying to take advantage of all this nonsense. It's some serious price gouging. I have a good friend that lives about 7 hours away that I used to buy all my guns from when I lived their. He had his license and he would give me his price on anything I wanted to order. Now that he's not so close anymore, I don't buy as much from him. But the first thing I do when I'm ready to buy a gun is call him up and get his price. I do this for guns I'm even remotely interested in. That way I have a good idea of what I'm looking for when I go into these big city gun shops.

I've seen mark-ups as high as almost $500 more than what I could get the same gun from my friend. I know gun shops have to turn a profit too, but a lot of what I've seen is way outta line.

 

[No Fear]

When the gun industry has effectively the whole government bought off to the point that congress and the executive branch ACTUALLY care (instead of just faking it), and start repealing pointless gun controls/import controls, THEN, and only then will the gun industry come even into the same solar system as the snakes at Exxon Mobile.

 

[CRITGIT]

Manipulation by fear seems more of a ground level (dealer) phenomenon than one of the industry.

Dealers gotta love candidates who are "perceived" as anti gun.
"They'll take your guns and your Bibles!"

CRITGIT

 

[Jorg Nysgerrig]

No_Fear, you really don't understand the rules of this board, do you?

 

[DMW]

I love the ExxonMobil rants. Why does everybody hate them? World governments control and price 90%+ of the world's oil. The major oil companies make less money on oil than the governments who tax them at the pump. "Big Oil" is the convenient whipping boy. I'm not in the oil business but in the investment business and have followed these companies for a long time.

I think gun manufacturers are in the same boat as the oils. People make up stories to fit their political beliefs without researching the facts and many second-hand facts on the net are highly biased.

 

[rcmodel]

I wonder if it is just coincidence that gas prices have dropped a week before the election to only .10 cents a gallon from where they were four years ago before the election?

No Shirley, Not!

 

[DMW]

Not likely. Oil is priced on the world market. The U.S. government does not have the wherewithal to influence the price of oil by $60/barrel. Oil prices fell because buyers backed away. China was hoarding and over-importing up to the Olympics to get everything done and to run factories on overtime so they could shutdown during the games and clear the polution for a few weeks. Crude started falling after the Olympic games and has weakened further with the growing economic crisis globally. No conspiracy here, just supply and demand.

 

[RP88]

+1 to DMW

what would you do if you found out that the government was gonna tax the crap out of your business and take a LARGE chunk of money that should - by free market thinking - go to you? Simple. You make up for it by charging enough to make up for whats lost in tax.

As hippy-ish as it sounds, it's the government's greed that is trying to trounce the Mobil's greed here. We're just stuck in a giant pissing contest, and we have to pay for the gold medals. Mobil does whatever it can to break from those taxes, but either way they could care less about the price because they know that you'll buy it anyway up to a certain point. So far, they seem to realize that they can still make comparable profits when it costs five bucks a gallon. The only reason why they arent charging that is because of the speculators that do with the oil moreso than the actual companies do.

 

[Phil DeGraves]

Regarding the huge net profit by EM,

Remember that over 40% of their net income gets reclaimed by the Govt. as taxes. The reason the oil companies made such huge profits is not because of price gouging or profit margins but because of the huge increase in industrialization in formally third world countries in the past year or so. Volume is the name of the game here, despite what the left have to say about greedy "big oil". I would like to know how much extra profit "big media" made this year, but they are not likely to advertise it.

 

[Big Mike]

Thanks for the discussion.

I guess I should have broken out my thoughts a little more...I and I think most firearms consumers see the increase in fear sales at the lower, dealer level.

Maybe I'm just jealous that I don't own an online store selling handgun with magazine capacities over 10 rounds.

Mike

 

[O C]

Exon-Mobile's RETURN ON INVESTMENT is about what Walmart makes. Who in the *ll do you think plunks down a BILLION dollars on a major oil platform? The government doesn't, do the oil companies come to you and ask for money to replace the 75 platforms destroyed in the gulf? The oil companies are the single largest tax payers in the world. The government has NO investment, supports NO infrastructure, owns NO equipment, does NO exploration, yet reaps PROFITS of TRILLIONS with no risks, and then beats up on the same people who pay ONE THIRD of all taxes!
I am not in the oil business, nor did I stay at a Holiday Inn.

 

[Just Jim]

Understand that Clinton and his gun grabbing ways sold more guns to the public than anyone ever before. He was good for the industry because his politics of fear made people buy one hell of alot of guns. He made laws to control guns, not take them away.

Obama is a total gun ban politicion, his efforts will kill the industry. Him and Biden will set up new laws that will be so draconian that people will die over it. His view will be a socialist empire that has no room for personal protection.

jj

 

[jad0110]

The reason the oil companies made such huge profits is not because of price gouging or profit margins but because of the huge increase in industrialization in formally third world countries in the past year or so. Volume is the name of the game here, despite what the left have to say about greedy "big oil".

Yep, and if anything I've seen some reports that the average profit margin of Big Oil is down just a tad over prior years. Increased volume is driving the increased overall profits, just as I hope volume is pouring some much needed cash into the gun industry right about now.

And as others have said, lets not forget that Big Gub'ment makes more pure profit off a barrel of oil than eeevil Exxon Mobile does. But that is okay, because they care, and they are here to help us. :banghead:

 

[No Fear]

Exon-Mobile's RETURN ON INVESTMENT is about what Walmart makes. Who in the *ll do you think plunks down a BILLION dollars on a major oil platform? The government doesn't, do the oil companies come to you and ask for money to replace the 75 platforms destroyed in the gulf? The oil companies are the single largest tax payers in the world. The government has NO investment, supports NO infrastructure, owns NO equipment, does NO exploration, yet reaps PROFITS of TRILLIONS with no risks, and then beats up on the same people who pay ONE THIRD of all taxes!
I am not in the oil business, nor did I stay at a Holiday Inn.

And as others have said, lets not forget that Big Gub'ment makes more pure profit off a barrel of oil than eeevil Exxon Mobile does. But that is okay, because they care, and they are here to help us.

These were very correct and convincing statements that I just quoted. I stand by my comment though that the gun companies and oil companies are apples and oranges because of the influence the oil companies have over government (which I am jealous of on behalf of the gun dealers/makers/owners).

 

[mbt2001]

Just a note, ALL of the gun makers put together with all of the ammo makers don't even add up to 10 billion in gross revenue... Seriously, it may not even be over 5 billion.

Please don't go starting that "big business" crap. These are all medium sized businesses and in many cases (Jimenez) small businesses.

The reason the oil companies made such huge profits is not because of price gouging or profit margins but because of the huge increase in industrialization in formally third world countries in the past year or so. Volume is the name of the game here, despite what the left have to say about greedy "big oil".

uhhh Sort of, but mostly because the "demand" inflated the price and when the number gets larger 7% of that number also gets larger. The Oil companies pay 40+% of their NET PROFIT in taxes and that doesn't include ROYALTY, LEASES and other taxes and fees.

 

[CRITGIT]

I doubt many here and elsewhere will be too sympathetic with Exxon Mobil's tough circumstances.
Remember the days when we had lots of oil co's with more choices and competition.
...but yes the gun/ammo industry doesn't make a pimple on their collective butt compared to many other industries in this land.
If we had more competition the prices would come down much faster as cost of materials do.

CRITGIT