Gunsmithing A question on supply and demand

[garrett4]

Throughout the Hide u see people waiting for equipment to be manufactured. Take rifle actions for example, most builders are half a year or longer behind on orders, why is that. It would seem to me from a business model that if I sold say 25 a month with a large backorder that I would ramp production up to 35 a month and maybe higher, you want to sell all u can to make money but it doesn't seem to work that way in the gun business, why? You see that with barrels, stocks and scopes Thanks

 

[arocholl]

Your thinking about this from the consumer side understandably; from a business owners perspective you have to think about all the costs involved with doing what you are asking. Increasing production levels means increasing the bodies doing the machining, potentially purchasing additional tooling (which their current building may not have space for), raw materials, utilities; the list is almost endless. All of this requires capital that the barrel maker, action maker or scope maker may not have or have the ability to get at this time. In addition, you also have to look at the break even point; how much do I have to sell to recoup my investment plus interest and how long will that take?

On the consumers side, you also have to recognize that there is unprecedented demand for these products due to a multitude of factors.

 

[buffybuster]

My WAG:

Whether it's actions, bottom metal or barrels, we're talking about increasing machining capacity. That takes considerable capital and also leadtime. Even though the backlog is considerable at the moment, will the demand be strong and consistent enough to warrant an immediate capital investment in machinery which would take a year to bring online?

Defiance Machine makes the majority of the private label actions on the market. I'm certain they are run in batches. Companies don't want money tied up in inventory and if the customer is willing to wait, then it's better to build to order.

 

[damoncali]

I've always wondered this. Because it seems like certain items have been backlogged for decades. High end stocks and barrels, mostly. I can understand if there is a large capital outlay on equipment required to increase production - businesses get crushed if they have underutilized capacity. But surely its safe to say the barrel market as a whole is under capitalized pretty consistently? Maybe it's a people problem (hard to find good workers), but I have a hard time believing that too. It's hard to find good people, but it can be done if that's the only problem.

So I don't get why one of two things doesn't happen- either prices go up until the backlogs go away, or more production capacity is added. But it doesn't seem to work that way.

I'm sure it's not that simple somehow, but from the outside looking in, it's a head scratcher.

 

[NXS338]

The shooting industry as a whole has always been like this it seems. Even with the advent of CNC machining centers and the incredible advancements to the manufacturing industry it seems the industry is still stuck in the past as far as overall production. The excuses are always the same also, don't want to expand our production because we don't know how long this will last...lol. This is the only Industry that has this attitude, If there wasn't a ford on any car lot and they had people waiting to buy them you can guarantee they would expand there capacity without a second thought. I don't believe the high end barrel makers have ever gotten ahead since day one, and after all this time they still havn't caught up....always a wait unless you catch one in stock at a place like midway or brownells. Imagine how bad it would be if there wasn't those type companies who will invest in the inventory to have it for us on hand. Then there's the reloading component industry, they seem to completely rely on everyone else to keep there stuff in inventory. I agree it seems crazy to me, but I don't see them changing the way they do things.