Lynx Defense

Vastly different sized guns...same price?

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  • breakingcontact

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    Take the average small plastic 380 or 9mm pistol for example. $275-400 roughly.

    Thats the same price as a bolt action rifle or a pump shotgun.

    How can a tiny LCP cost as much as a Mossberg 500?

    Is the added input costs in small parts being harder to make? Is it harder to assembly the small pistols so that drives up the cost?
    Military Camp
     

    Blind Sniper

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    I'd wager it's because of the smaller parts, the number of said parts (in some cases - the LC9 only has 15 more parts than the Mossberg 500), and the fact that smaller guns are inherently more complex/finnicky than larger ones.
     

    ShootingTheBull

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    Plus there's a million other factors -- how many they'll sell, what their marketing costs are, what their service and support costs are, how much labor it takes to make them, all sorts of things.

    The actual costs of the parts are perhaps the least relevant part of the equation. I mean, think about it -- some cheap dime-store novel may have 300 pages and cost 50 cents, whereas the top of the NY Times Bestseller List costs $40, and may still have 300 pages. If cost of materials was what determined final price, you might think they should both cost the same, but -- business doesn't work that way.
     

    breakingcontact

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    Right. Thats what im getting at so where are the costs?

    Is it more costly to be in the pistol business than than the shotgun business in terms of liability, lawyers and insurance?
     

    reddog

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    Interesting question. My guess would be complexity, pump shotgun, or a bolt action rifle are about as simple as it gets mechanically speaking, tolerances are probably fairly open. Revolvers/pistols the tolerances are probably tighter and mechanically they are more complex but does that really justify the higher price by itself? I'm sure there are other factors, long guns are probably sold in more places so larger market share with probably less competition compared to the handgun market. Seems like there are a lot more handgun manufacturers than there are say bolt gun. Plus then there is the good old "what the market will bare" too, what was the cost difference 50 or 75 years ago??
     

    HillRider

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    Interesting question. My guess would be complexity, pump shotgun, or a bolt action rifle are about as simple as it gets mechanically speaking, tolerances are probably fairly open. Revolvers/pistols the tolerances are probably tighter and mechanically they are more complex but does that really justify the higher price by itself? I'm sure there are other factors, long guns are probably sold in more places so larger market share with probably less competition compared to the handgun market. Seems like there are a lot more handgun manufacturers than there are say bolt gun. Plus then there is the good old "what the market will bare" too, what was the cost difference 50 or 75 years ago??

    There is a point there when you look at the prices of say a Marlin 336, which seems pretty complex mechanically (more than a bolt action) and is made of decent quality materials.
     

    HillRider

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    Take the average small plastic 380 or 9mm pistol for example. $275-400 roughly.

    Thats the same price as a bolt action rifle or a pump shotgun.

    How can a tiny LCP cost as much as a Mossberg 500?

    Is the added input costs in small parts being harder to make? Is it harder to assembly the small pistols so that drives up the cost?

    Tell that to Kahr.
     

    Vaquero

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    What do you pay for a Colt AR15?
    What does uncle sam pay for an m4?

    Sometimes it makes no sense.
     

    Edwarethered

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    My personal thought has always been that they'll charge what they think someone is willing to pay for it. Most likely they take the manufacturing cost, add at least 200%, treat that as a minimum and increase the price by a few 100 untill it looks like a price tag no one will pay for. subtract about $1.01 and call it the price. But then again, I have all kinds of wild theories
     

    Shotgun Jeremy

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    What do you pay for a Colt AR15?
    What does uncle sam pay for an m4?

    Sometimes it makes no sense.
    I was looking into this on fedlog about a year and a half ago, and the price uncle sam pays is ridiculously low. If I recall correctly, I found a 1911 on there for $80 and a shotgun for around $60. I wish I still had that printout.
     

    Shotgun Jeremy

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    My personal thought has always been that they'll charge what they think someone is willing to pay for it. Most likely they take the manufacturing cost, add at least 200%, treat that as a minimum and increase the price by a few 100 untill it looks like a price tag no one will pay for. subtract about $1.01 and call it the price. But then again, I have all kinds of wild theories

    You ever watch Shark Tank? This seems to be about how they do pricing.
     

    Shotgun Jeremy

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    The show is about a group of investors who have independent people come up and run ideas by them, looking for investments to help their product make it big. Part of the show is the people breaking down the numbers-how much it costs to make the product, how much the store will be buying it for, and how much the store will be selling it for. I've seen numbers on there like $2 to make the product, the store buys it for $10 each, and sells it for $25. Then another person will come along with a product that costs $50 to make, the store picks it up for $75 each, and sells it for $90. The numbers don't seem to have any consistent logic to them.
     

    Whisky

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    look at the Merc Benz S class vs the Porsche Turbo S - both nice - both well built - Turbo is twice the price of the S, half the size

    Beluga Caviar vs 1 dozen farm fresh hen's breakfast eggs - both of 'em are eggs - $300 an ounce vs a couple of bucks

    and on, and on, and.....

    (in most cases, ya gets what ya pays for.....)
     

    ShootingTheBull

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    Pricing is fairly simple -- you charge what the market will bear. If people will pay $10 for your product, but they won't pay $11, then you know that your maximum price is $10. Then you have to figure out if you can stay in business, or even make a profit, at $10. If you can make your product and distribute it for $7, then -- you're in business. If it costs you $9.50 to make it, you're screwed, forget the business and try something else. If you can make it for $1, then you're rich. (well, assuming you can sell enough of the product! If the total potential customer base is only a few hundred people, then even with a $9 profit per unit, it still may not be worth going into business).

    Trying to determine end-market pricing by figuring out what it costs you to make the product, is a path towards bankruptcy. That's not how manufacturing works. That's how DISTRIBUTING works, maybe, but not manufacturing.

    The smaller the potential market, the higher the price needs to be of the product, to make it worth bothering to even go through the R&D, prototyping, development, focus groups, patent expense, legal expense, securing rights, establishing the company, reviews, revisions, alpha-testing, beta-testing, marketing, securing distribution, and dealing with dealers and holdbacks and returns. Coming up with, making, and marketing a product is a LOT of work. Pricing has zero to do with how many parts are in the product or how physically large the product is. It has everything to do with a simple formula like this:

    How many can we sell? What price can we sell them at? Okay, there's a potential market of 10,000 of these, and they will sell at $49.95, so that's $499,500 out there that we can capture. Now, how much will it cost to develop this? Hmmm, looks like it'll cost about $100,000 in legal fees, patents, and rights, and probably $100,000 in R&D costs, and a $100,000 advertising campaign. Fine. Now, what does it cost to manufacture? Looks like we can get a factory in China to turn out 10,000 of them for $8 apiece. That's $80,000. So our total sunk costs are $100k+$100k+$100k+$80k, that's $380,000 out of pocket, and we stand to make $120,000 out of it. Okay, that looks good, we'd be making about 30% on our money. How long will it take us to pull this all off? How long will it take us to sell those 10,000 units? If the answer comes back "1 year", then maybe we should do it. If the answer comes back "3 years", then ... heck, screw that... you could just put your money in the stock market and make 10% per year and not have to do all that work.

    So -- again, in the end, the "cost of manufacturing" has very little to do with it. It may turn out that we can build the thing for $8 and sell it for $50, but -- will enough people buy it? Now, plug those numbers in a spreadsheet and start changing things -- change it so we can sell 100,000 of them, and it's a WHOLE DIFFERENT EQUATION.
     

    STXdevilsquid

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    I think it's just people are used to buying guns around $400, so they just put a bunch of different guns around it. I'm sure manufacturing is a very minimal difference between type on a mass scale.
     
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