Re: Why are suppressors so expensive?
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: BachelorJack</div><div class="ubbcode-body">I've seen the inside of this industry. I've seen the books, and done the numbers. Here is how it works.
As a manufacturer you need to sell your suppressor for 100% profit. That markup is necessary to pay all the fees, taxes, overhead, R&D, marketing, etc. Who do you sell your suppressor to as a manuf? Dealers.
Dealers need to make a healthy profit. Those poor saps have to deal with customers. They have to answer the same 10 questions hour after hour. They have to be nice, and accomodating. They educate the customer, hold their hands, and eventually finalize the transaction. Think of all those hours of time they've sunk to get to that point. Sometimes they even do free demos, and have ammo costs to add in which gets expensive really quick. So lets give them 20% (which is actually 40% of what the costs of production are to begin with). This percentage needs to be higher than their projected profit on an easier to sell item like a scope. If it wasn't they would be much better off buying and selling scopes or whatnot instead of suppressors.
Price= (2X Cost of production)+(.4X cost of production)
Price= 2.4X cost of production
Use that equation and work backwards. Then decide how large of a batch you would need to run to make the CNC programming, and running of parts worthwhile. Then price out what that would cost just in raw materials to produce that run.
When dealing with higher end suppressors the margins are less. For what dealer price was two years ago on a Gemtech Sandstorm(haven't checked lately) Gemtech can't be making 50% and dealers were barely pulling 10% profit, if that.
And the customers bitch and bitch. There are 2 constant factors that help the consumer's purchasing power in this industry. No one on any of these boards ever mentions it. We talk about it constantly in my industry dealings.
#1--Guys become dealers because they like guns. They also happen to suck at business. And apparently you can't suck at business and stay in business. So at all times someone is selling off their new inventory at or below dealer cost because they are drowning or done. I see dealers order stuff, know how much they paid, know how much their shipping charges were, and in a few weeks watch them dump it for less than they have in because they need cash NOW. It just blows my mind. Some of them do it again and again and again.
#2--Some guys are always willing to work for free. There truly are some guys who will give you the shirt off their back while they teach, help, fix, design and build. They underbid, or overwork themselves. In the end they lose money or make less than $10/hr. And I see it all the time. And those very same guys will buy you lunch and apologize for taking a little longer than they originally thought. </div></div>
+1 Way too many guys on the internet cutting their own throats trying to undercut everyone else. They might be around for a couple of years, but not for long if they really can't grow the business. And I am not only talking about the gun industry. Believe it or not, people are willing to pay the extra for the same exact widget if they can get better customer service.
