Oh the $$$$....

Stubbers said:

Funny, because I have seen the actual cost basis of fx products and their mark ups.

Add to that, mechanics mark up their parts over cost by a good margin.

Add to that, the 80k pick up could have an 80k sticker price with an MSRP of 60k...because of dealer markups.

-Matt

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There is a dividing line once you get over a certain total dollar amount. If something retails for $20 then margins are higher due to lower volume dollars-if something retails for $20k then margins can be lower due to higher volume dollars. Do your homework here and look up markups vs margins. While you are being told about markups by the folks in the front-the bean counters in the back are computing margins. In the end it's about profit-not total dollars. Mark-ups don't always equate to profit. You won't stay in business if you aren't profitable. Not trying to start an argument here just been in retail sales and manufacturing for over 30 years for many different companies including my own and have had the good fortune of them letting me see behind the curtain.

About 525,000 results

1. Markup and margin are different concepts in business finance12345:
   • Markup is the percentage increase on a product’s cost price to determine the selling price.
   • Margin is what’s left over after sales are deducted from the cost of goods sold, representing the profit.

Stubbers said:

My case in point, the story I attached is proof you don't always get what you pay for..and the lawyer I got for $1,500 retained was not some inexperienced novice, he was closer to retirement at that point of his career.

Cost ≠ Value

-Matt

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Guess he didn't have kids to put through college anymore. I've seen very talented guys at the ends of their careers do what they do best for snorts and giggles. Not sure guys like that represent the serious business world because they can't be found on every street corner and you never know when they will hang their tools up for good, so they won't be dependable in the long run. Great value to be had if you are "Johnny on the Spot" and they like you.

delooper said:

Judging from my grocery bill this could easily just be inflation from the COVID era. I don't know what cumulative inflation has been like in the States since COVID but here in Canada our grocery prices are nearly double. We've had about 20% inflation (averaged over all items) but some items have inflated more rapidly than others.

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This is the main culprit. We've printed a buttload of money, haven't had enough kids and have had our supply chains seriously disrupted. It all adds up to serious inflation and the official numbers are way off since they conveniently omit things like fuel prices. Just take a look at what it costs for a burger and fries today and compare it to what you paid 10 years ago.

wwo2015 said:

Agree with most of what you said-more expensive doesn't always mean better. If someone wants to charge a higher price for their goods or services, then that has to be warranted by reputation of success from prior business then they have that reputation of "getting the job done" and then that validates the money spent. Just saying that upfront without the history of proof is going to be a hard sell to anyone with common sense. Some folks are worth every penny that you pay them, so it is buyer beware.

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What I've always wondered is how some of the dirt cheap Chinese products manufacturers managed to stay profitable. Remember the $20 B3's and Fast Deers? There were thousands of similarly priced products out there 25 years ago and even with a low exchange rate and subsidized shipping there was no way they should have been profitable.

No printing money here during the great hysteria, actually things rarely been better here before and since that deal.
But if course we are small potatoes here and printing or not the great perspective would not care.

I take great comfort in knowing / seeing that my own expensive rifle do things better than my friends cheap rifles, but i dont like very much to shoot short range like 50 M or less, CUZ there my friend make groups that you could not tell apart from mine.

I do think it should be possible to make a damn nice air rifle at 1000 - 1200 USD or cheaper., and make good money selling those.

But 2000 USD or more, that really put a damper on my enthusiasm, and tied to the .177 caliber on top of that,,,,, well you have to be a little delusional when you go rifle shopping, CUZ then you sure as hell do not get your moneys worth.
I would feel A LOT better if i was able to buy .22 rifles.

Sawney Bean said:

What I've always wondered is how some of the dirt cheap Chinese products manufacturers managed to stay profitable. Remember the $20 B3's and Fast Deers? There were thousands of similarly priced products out there 25 years ago and even with a low exchange rate and subsidized shipping there was no way they should have been profitable.

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It's the ancillary costs of doing business in the US vs the rest of the world. Insurance, taxes, legal costs, maintenance, machinery, employee benefits, dealing with watch dog agencies like OSHA and the IRS. Other countries pay exorbitant duties on US products brought into their countries vs what we pay for products coming from them and the biggest difference of all-labor costs. All adds up when building and bringing a product to market. Sooner or later, this will all get top heavy, and the markets will have to reset themselves. Has happened before.

Needs v wants = the more you want it the less you need it… the less you need it the more you’ll pay for it

wwo2015 said:

It's the ancillary costs of doing business in the US vs the rest of the world. Insurance, taxes, legal costs, maintenance, machinery, employee benefits, dealing with watch dog agencies like OSHA and the IRS. Other countries pay exorbitant duties on US products brought into their countries vs what we pay for products coming from them and the biggest difference of all-labor costs. All adds up when building and bringing a product to market. Sooner or later, this will all get top heavy, and the markets will have to reset themselves. Has happened before.

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I still don't think it adds up. Just think of the price of making and finishing a hardwood stock, even with the cheapest wood available and extremely cheap labor, and then realize that that's only one component and you still have to factor in packaging, shipping and profit for the retailer. I'm sure there was some way they made the numbers work, but I suspect there was a production quota, subsidy or something else that made it artificially profitable and somebody, somewhere was making up the difference.

Sawney Bean said:

I still don't think it adds up. Just think of the price of making and finishing a hardwood stock, even with the cheapest wood available and extremely cheap labor, and then realize that that's only one component and you still have to factor in packaging, shipping and profit for the retailer. I'm sure there was some way they made the numbers work, but I suspect there was a production quota, subsidy or something else that made it artificially profitable and somebody, somewhere was making up the difference.

Click to expand...

Well without being there it's really going to be hard to know all of those things for sure. You do have to know that expectations for quality of life are much different here in the US than that of a country like China. May all have to do with what you are willing to accept vs. what you want when it comes to ownership and employees. I'm sure living in a communist country may make those choices for you. Thanks for the reply.

wwo2015 said:

There is a dividing line once you get over a certain total dollar amount. If something retails for $20 then margins are higher due to lower volume dollars-if something retails for $20k then margins can be lower due to higher volume dollars. Do your homework here and look up markups vs margins. While you are being told about markups by the folks in the front-the bean counters in the back are computing margins. In the end it's about profit-not total dollars. Mark-ups don't always equate to profit. You won't stay in business if you aren't profitable. Not trying to start an argument here just been in retail sales and manufacturing for over 30 years for many different companies including my own and have had the good fortune of them letting me see behind the curtain.

About 525,000 results

1. Markup and margin are different concepts in business finance12345:
   • Markup is the percentage increase on a product’s cost price to determine the selling price.
   • Margin is what’s left over after sales are deducted from the cost of goods sold, representing the profit.

Click to expand...

If I am understanding this concept that the margins are higher on a $20 item, is that due to the volume of sales are lower? And vice versa for the $20k item? Your badge indicates you are associated with a manufacturer. Is that correct? If it is, why does it seem to be quite difficult to present new ideas to companies? Thanks for the good info on previous posts.

The $240 Umarex Notos, and the $440 Zelos gained instant popularity for a number of reasons ..... including the price tag.
Hopefully top-tier manufactures are paying attention, and follow suit.
A $599 Daystate or FX pcp would likely be a instant best seller!

Airgun Al said:

The $240 Umarex Notos, and the $440 Zelos gained instant popularity for a number of reasons ..... including the price tag.
Hopefully top-tier manufactures are paying attention, and follow suit.
A $599 Daystate or FX pcp would likely be a instant best seller!

Click to expand...

The profit margins on the high end guns is so wide, they aren't concerned with volume, high volume sales requires high volume production which is not in every manufacturers wheelhouse.

-Matt

MRaccurate said:

If I am understanding this concept that the margins are higher on a $20 item, is that due to the volume of sales are lower? And vice versa for the $20k item? Your badge indicates you are associated with a manufacturer. Is that correct? If it is, why does it seem to be quite difficult to present new ideas to companies? Thanks for the good info on previous posts.

Click to expand...

Sales volume on lower priced items is always higher than higher priced items. For instance, the packages of gum or candy you see at the checkout isles trying to get impulse buys. It's only $1.00 so they sell tons of that stuff. Their profit margins on that package of gum are probably 80% or better. Even though it's almost all profit it's going to take a lot of sales to make a pile of money. If you are a store like Walmart that will have thousands of folks through every day, then you will get it. That is the highest profit area of the store. That's why you don' see TV's at the checkout isle. In the end it's items like that where the profit is. Big items in those kinds of retail environments just get people there. They at best pay for themselves plus some volume dollars to produce cash flow. When I was a manager at Home Depot, we were taught that the target average sale was $20 over the course of a business day. That tells me they were more interested in the high-volume/high margin sales of the $5.00 items than were over a lawnmower. Airgun retailers have the guns to get you as a customer. The high margin stuff you will buy after the sale are the scopes, rings, pellets etc... Things like pellets are repeat sales they want. They want to make money on the guns for sure but that just opens the door for all the rest. Yes, I am in manufacturing but have been in retail in many other business lines.

Thanks for the reply.

Airgun Al said:

The $240 Umarex Notos, and the $440 Zelos gained instant popularity for a number of reasons ..... including the price tag.
Hopefully top-tier manufactures are paying attention, and follow suit.
A $599 Daystate or FX pcp would likely be an instant best seller!

Click to expand...

I remember when BAM started making clones of various airguns like the TX200 and selling them for about 1/3 the price of the real thing. They seemed to sell pretty well at the time. Not sure what ended up happening to them.

With all of the above in mind, that is why I hate the saying "you get what you pay for".
Especially in the hobby world.

i bet you dont shop for groceries

I am not an economist nor am I in a position to speculate on the business practices of airgun manufacturers. What I can say is that when I am ready to put down my cash for an airgun, I go with the best I can afford. I do not have a vast collection and I don't need one, but I value what I have more than what I do not have.
Sure, I'd love me a really expensive, top shelf airgun. Just like I'd love to have a sweet a$$ Lamborghini Countach. But that's a dream for a day far in the future and it certainly does not fall in the "need to have" category. For now, I stick with what I have, take care of them and enjoy what I've managed to accumulate. Putting these things first goes a long way toward not being drawn in by marketing hype that wants me to believe that the things I already own are inferior in any way to the latest newest shiniest thing that comes to market. If I can't afford it, I don't need it. No matter what the marketing department wants me to believe.

Yup! Functional? Or Fancy?

1) I enjoy shooting a airgun for the maximum possible accuracy. For all of the hours and lead I go through I don’t mind spending 2-3k for a really good one.
2) Some brands have increased in both cost and complexity. Hard to say exactly what’s driving that but certainly parts cost/inflation is a factor and also airgunners happily diving into the next neat shiny thing.
3) I own seven airguns. It’s all I can keep up with in terms of ammo, tuning, and shooter skill.
4) I have become a RAW fan. I also have a Thomas I shoot extensively. Maybe I’ve spoiled myself or maybe I’ve found airguns I'm actually happy to own and keep. I had a fancy gun with knobs and adjusters and it just wasn’t accurate enough / reliable enough / enjoyable enough to stay in the rotation. I sold it to a fellow shooter who tuned it for one use and I think he’ll be very happy with it that way.

The cost of everything is sky high because most of us have the ability to pay those higher prices. Wages have risen more than inflation on average. A guy griping about the price of a loaf of bread and then lamenting how much a high end PCP costs has his priorities all tangled up.

I shoot a rifle I can afford given the funding I have. I can't justify a PCP at any price. I'm simply not in that tax bracket. I shoot to develop my shooting skills and have fun in the great outdoors. It's something I really enjoy that is well within my means. Pushing it to the edge of my financial capabilities does not give me more satisfaction nor does it knock over more targets.

I appreciate accuracy and quality as much as the guy that can afford it. I also like to outshoot those guys with my budget rifles. It's perfect parity. I can gaze upon the goodies someone else paid for and still afford to eat healthy food. Then stand there with a cheap rifle and watch the look on their face when they realize all that expensive hardware dosent make two squirts difference in a game of skill.

Some spend thousands of dollars for a rifle that shoots better than the table they rest it on. Some spend thousands of hours developing the skills to shoot better than the cheap rifle they can afford. After a decade passes they can look back and take stock of their gains and losses and decide for themselves the true value of their investment.

Guys spend big money on toys because it satisfies them to have nice toys and they can afford it. Guys without the funding buy cheap $h!t and have fun anyway. When it comes to air rifles there are plenty in all price ranges to meet the needs of everyone. And everyone loves their air rifles no matter how much they paid for them.