Why are handguns so Expensive?

[Geno]

Profit!

According to my friend who is a firearms depertment manager in a major chain, it's becaue of "...profit". According to him, the profit margin on most firearms ranges from 30% to 40%.

The next time you're told "We can't give you $5.00 off...we're within pennies of our cost" walk out. I regularly can get firearms from him at 20% off, and I reularly can get ammunition for 10% off. He asserts that they are still making a healthy profit.

Doc2005

 

[Majic]

Why are quality handguns nearly double the price of a quality rifle? There are many quality rifles to be had in the $300 price range but it doesn't really seem to be the case with handguns

It seems you have yet to start looking at real quality rifles. $300 represents the economy version of some rifle makers.

 

[cyco668]

I don't think most firearms are expensive. They're half the price of a new tv, and the firearm will last alot longer. I spent $700 on a transmission, and got rid of the car a year or 2 later. My computer is well over $2000, and it became outdated 6 months after I bought it. If you compare what a gun costs to everything else you spend your money on, I think most guns are moderately priced. How much money do you guys (and gals) spend at the movies, DVD's and CD's, or on alcohol and cigarettes? A gun that will outlast most of us doesn't seem that expensive.

I guess the topic is about the price of handguns vs rifles. I think it's just because we are willing to spend more on a handgun. I was told the same thing about women's perfume. The only reason why women's fragrances cost more than men's is because woman are more willing pay for it. Retailers will charge the maximum price a customer is willing to spend.

 

[RNB65]

The correct answer is: Economics! Based on supply and demand, manufactures and retailers charge whatever they think the market will bear in order to maximize their profits. As long as people are willing to pay $800 for a Sig or HK they have no reason to lower their prices. If and when the marketplace turns against them, you'll see prices drop in short order.

 

[Prince Yamato]

Oversea labor is usually a lot cheaper than US labor with some exceptions, notably European and Japan.

Baba Louie has it. CZs can be had in the $300-400 range if you look. Soviet surplus can be had for under $200. Plastics this, metals that. It's all about labor costs.

 

[Ala Dan]

1911's In General

Look at Les Baer's Thunder Ranch Special 1911 .45 ACP- MSRP is $1748,
I have 'em priced at $1795~! Why~? Cuz, they are so dang hard to
get. These guns have NO MIM parts in them; they are quality firearms
"Proofed" when they leave the Baer plant. All you need too do is clean
'em, lube em, and shoot the heck out of 'em.

Sure, there are less expensive 1911's. the Rock Island gun can be had
for approximately $329; while the parkerized Springfield WW-II G.I. replica
will run $439. These guns will shoot; but they are simply not in the class
with the Baer's, Brown's, Wilson's, STI's, and Nighthawk's.

 

[18DAI]

I reckon the reason is not as complicated as some folks are saying. The simple answer is the companies making them are greedy. I like blaming stuff on lawyers too though.

 

[mblat]

I don't believe that it has a lot to do with the volume. Majority of guns (outside of battle rifles ala M16, AK, FAL) are produced in fairly small quantities. As the matter of fact I read somewhere that entire small arms industry in US are around $13billion. That is about the size of porn industry. So we can’t really talk about economy of scale effects.
I also don’t think that it is labor issue per se. After all it doesn’t take less labor to produce CZ than Sig.
I think it is “what market can bear”. That is it. For one reason or other people are willing to pay more for handgun. So we are charged more for them.

 

[20yearvet]

I reckon the reason is not as complicated as some folks are saying. The simple answer is the companies making them are greedy. I like blaming stuff on lawyers too though.

With that logic then, what do you consider to be a reasonable price?

How much to you think the gun manufacturers should make in profits?

You as a consumer don't have to buy something that you think is too expensive.

We live in a capitalist society where the price/cost of the vast majority of our goods and services are determined by the market. Public utilities, public transportation, and things of that sort are some of the very few things that have controls put on them. Get Uncle Sam involved in too many more things and we'll be addressing each other as "comrade".

 

[Lone_Gunman]

I think the people that are blaming the cost of firearms on lawyers and litigation are totally wrong.

The gun industry is now more protected than any other industry when it comes to liability. The gun manufacturers lawsuit protect act that was passed by Congress and signed by Bush prevents gun companies from being sued if someone misuses their product and kills or injures someone else. They can still be sued if the product is defective, but truly defective product lawsuits are rare, because few defective guns leave the factories. Most of the lawsuits have been filed by families suing gun companies whose products worked as they were designed, but were used by criminals. The Beltway sniper would be an example.

If product liability had been the reason for the high cost of handguns, then the cost should have gone down with the passage of this bill, as liability was decreased. But a price decrease did not happen. What eneded up happening was good for manufacturers, but not passed down to consumers in the form of lower prices.

This is not unique to the gun industry. When medical malpractice reform was passed a couple of years ago in Georgia, we were promised decreased malpractice premiums by the state's larger malpractice insurer. Physicians lobbied hard for this legislation, and ultimately it passed. Would you like to take a guess as to what happened to malpractice premiums after the bill was passed?

 

[SouthpawShootr]

I decided on a springfield xd in .45 acp. It ran over $500..........

I've taken note of this myself lately. Particularly with the XDs. When I bought my first one, it was used but like new from a dealer for $325, box, manual, 2 mags, everything when purchased new. About 2 years later (this was about 2003), I spied a stainless XD NIB in a local shop and had to have it. That one cost me around $430. I'm not a big fan of the XD, but still look at them when they come into the shop. Now (as in yesterday) I'm seeing prices of $500 ($525 with tax since all my other figures so far have been what I've paid OTD). It seems to me that there has been a big price jump on the XDs in particular and Springfields in general these past few months. Looking at the last few gunshows, I've seen the same thing. Usually, in local and Richmond gunshows, there are two dealers in particular with really good prices. They're high volume dealers (nothing stays around very long) and both of these have gone up in price on Springfield guns.

I'd note that, in the same shop, HKs, Sigs and even Kimbers have stayed relatively stable. Just bought an HK USP Compact last week from them in fact since they had the best price I could find.

 

[Baba Louie]

It seems to me that there has been a big price jump on the XDs in particular and Springfields in general...

Generally known as "making hay when the sun shines". When the Croats first hit the shore and were called HS2000's I believe, they were generally derided (by some) as a Glock ripoff with a grip safety. Those who bought them, seemed to really like them, price point and all and lamented the fact that once SA bought them and renamed them the inevitable price hikes would be staggering. Once someone builds a really nice mousetrap and successfully markets it to their profit, it's rare for their prices to stay low. Other mousetrap manufacturers and sales houses might as well follow suit if the market bears.

 

[SouthpawShootr]

Maybe so, but many of the people I know who bought the Springfield XDs did so b/c it was a more affordable option than the Glock. As the prices on these things pull up even with the Glock, they'll lose that segment of the market. Actually I didn't mention that the shop where XDs were marked $500 had the same caliber Glock models for $490. So the XD price actually outstripped the Glock. Only the XD45 in that shop is cheaper (by $10) than the same caliber Glock model. Of course, there are people who don't like certain features of the Glock and prefer the grip angle of the XD and would chose them first. They'll keep that segment of the gun-buying population.

 

[HGUNHNTR]

Doc2005, as a manager of a firearms department at a major retailer, I can tell you that if your buddies shop is making 30-40% on NEW guns, he is not selling many at that price. The store must be hundreds of miles from their closest competition to get away with price gouging like that. We might make 25-28% on most guns that walmart doesn't sell, but we make 7-8% on alot of others to maintain market share.

 

[Geno]

He says 30% on new guns and 40% on used

He says 30% on new guns and 40% on used. He said they prefer to sell used guns because they make more profit.

Doc2005

 

[FlaXD]

Why do diamonds, gold, etc cost so much? They're nothing more than a shiny mineral or metal whose mining costs are not out of line with those of other minerals or metals.

If women suddenly decided they would be just as happy with a quartz-zirconium engagement stone that was four, no eight, times bigger and brighter than a diamond one, you bet your booties the price of crystalized carbon would drop like a rock (pun intended.) Of course, we have a better chance of world peace, cold fusion, eternal youth, and zombie hunting parks happening.

p.s. - I was looking to buy a Keltec SU-16C. Asked the dealer to come down from $599. He looked up how much they paid from the distributor, $427, and decided there wouldn't be enough profit. So if distributors get $427, then how much do they pay Keltec - $300?

 

[fattsgalore]

I believe Beagle. Not sure he is correct. But it's what i thought. Cause all the legislations about handguns. Handguns and tobacco. Smokes use to be so much cheaper.
I can go into a gun store and walk out with a rifle or shotgun that same day. Their ain't no three day wait for those firearms. Handguns. Nope!
Lets be honest hand guns kill more people then the other weapons combined.(in America anyway) Thats has something to do with it i bet. They don't want every person being a pistol packing vigilante. The gun manufactures don't care though their making money.

 

[Cosmoline]

They're not. Only the new ones are, and who buys brand new handguns besides institutions?

 

[tomhorn]

high price of handguns = lawyers=suits =greedy idiots = insurance

 

[BobTheTomato]

500 might not be too far off when you think about it. First as someone said earlier it might cost over $100 bucks to make a glock. Then add in their normal profit and whatever office and factory overhead are ($50 to $100). Then it is a glock after all so add another $50 to $100 for the brand name. What ever they spend on advertising and legal fees and shipping that will be at least another $50. So at this point dealer price could be from $200 to $300 probally more towards the $300. So when the dealer sells it his or her price is maybe $300 to get it but they still need to pay the bills, rent, salaries, power, and feed them and their family so they need some profit margin say 30% which is almost $100. And then it is a glock after all so you will most likely pay more say $100. There you have it a $500 dollar gun and I am sure I missed various costs which could easliy drive the price up. I think it just goes to show that while it might only cost around $100 to make costs add up.
Also on a side not from what I have heard S&W makes the Sigma which is almost the same and it retails for about $300. So it would not be that hard to realize that part of what you are paying for is branding and the name.

 

[Lone_Gunman]

high price of handguns = lawyers=suits =greedy idiots = insurance

If that is true, then the price of handguns should have come down with the passage of the gunmaker lawsuit ban, but of course they did not.

 

[45auto]

Net profits of public companies such as Ruger and S&W are available.

Net profits run from 2-6% when all is said and done. Of course that can vary and the company could spend "unwisely". But, not huge profits or out of line with other industries IMO.

Glock probably is the highest profit gun since they make few "models" with substantial volumes and using "plastics". Gun makers "dream". On the other hand, they sell a large amount of their handguns to "organizations" with pretty deep discounts as I understand it.

Overall, IMO, prices have gone up for some good reasons and, in my area, because there are fewer gunshops now so you know prices will always increase as competition decreases.

 

[Zoogster]

Many reasons. Part of it is because they can. Part of it is liability and legislation.
Many cheap handguns are legislated as "saturday night specials". This swallows up both poorly manufactered cost cutting guns, but also cheap reliable guns that just have less functional cost cutting techniques like a worthless finish etc. They of course become the handguns of choice for criminals why? No not because criminals are buying more, but because the people in the poor neighborhoods they are stealing them from are buying more of that type.
So more affordable handguns inevitably become linked with crime unless they have the saving grace of also being used by law enforcment or other government agents.
This means an affordable good quality handgun not marketed to law enforcement is doomed to be associated with crime, because more of that type will be stolen in low income areas and have nobody defending them. So the simple solution is to just not make them cheaper than others, put a nicer finish on them, fine tune them slightly more and add higher price tag comparable to the others.

Long guns however are not easy for criminals to conceal and carry so represent very little of the criminal use of firearms. This means you have the entire market of them available (except the assault evil ones like the ARs that magicly have to cost a lot even though they are mass produced and could be sold at walmart prices) relatively undisturbed still. So both cheap functional ones, or just cheap asthetic or lacking fine tuning ones are available along with the high priced asthetic ones
and the high priced functional ones. The entire market is more on par with supply and demand than handguns with the exception of the assault types. Even the 'assault' types were cheap prior to many locations in the country passing various legislation making them more...evil and capable of demanding a higher price. So places without bans have to pay more for them because they are deemed to hold a market that will purchase them anyways, even if priced a little high for thier quality and value.

 

[BHPshooter]

Lots of good answers, but has anyone looked at the engineering or manufacturing aspect of it? A handgun has to do as much as, and sometimes more than, a rifle, but in a much smaller package. Making all of those functions fit into such a small package is a difficult thing to accomplish. Handgun designers earn every cent of their wages.

Wes

 

[vynx]

I know what its not and legal costs, lawsuits and lawyers have nothing to do with the cost of a handgun or rifle or cigarettes.

Cigarettes went up becasue they got taxed more.

In cost accounting there is no place for legal fees on lawsuits because that is not part of normal operations. If there were a lot of lawsuits like in the tobacco Industry it may be "other operating" but for most business it would be "non-operating costs" and treated as an exception.

Part of the sales price is economics 101 or what the market will bear, and some is the perceived quality of certain name brands which goes back to economics 101 as supply & demand.

For example, glocks could sell for less but why should they?

They most likely performed a market and financial analysis and determined the best profit margin (taking into consideration manufacturing, importing parts and assembly costs & abilities, etc.) was so many made at such and such a price.

To make more and sell for less money would not give as much profit; and to make less and sell for more money would not make as much profit.

They need to consider work force, material availablilty, optimum size of a plant, and many other factors - they are a big business and probably hire financial analysts to do this type of work - most successful business do - those that don't often dissapear.

Just my opinion as a financial analyst.