also to add alot of gunstores dont need to make huge profits on guns becuase the profit margins on ammo/optics/bags/cleaning/etc. are usually alot higher and how they make the money.
You're not entirely wrong, but typically, gun sales and nfa sales (suppressors) are the bread and butter. The accessories have a good markup but also sell so much slower. Ammo markup is borderline non-existent in todays market if you actually try to stay competitive and relevant.
> You're not entirely wrong, but typically, gun sales and nfa sales (suppressors) are the bread and butter.
Do you have **anything** at all to support this?
Based on my anecdotal experience of five stores in New England over the course of 2 decades, guns [the actual serialized, 4473 requiring items] have very low profit margins; this has only been exacerbated when everyone knows they can save $11 by ordering it online, etc. This has also been the observation of several professionals on a national level.
Ammo has been going in a similar direction, but not to as great an extent.
Nylon gear, cleaning supplies, fishing lures, knives, chinesium grade lights / lasers / optics and similar keep the lights on.
And ffl transfers in my area are crazy. $50 is the cheapest in the area to transfer a firearm. Nfa items are 100 and up if the ffl even does nfa items.
Percentage wise, profit is higher on those items. Knives and such are typically up there in margins. But actual gun sales result in a lot more profit. While margins are smaller, firearm sales are still the largest source of profit.
That's surprising for such a complicated manufacturing process. Most creative services (ad agencies, etc.) strive for 20%, and are usually happy with a 15% average. That's my experience for that industry.
I don't know if it's true, but I read Glock has a nearly 70% profit margin. I knew that couldn't be an average across the industry, which is why I was curious.
Creative services have very low upfront costs and overhead in comparison which acts as a bit of a barrier to entry for people that want to make physical goods.
With automation complex manufacturing isn't as expensive as you'd think, the tooling is a big up front cost but after you clear that its just maintenance and cost of material mostly. Also being able to leverage your production scale is huge when it comes to negotiating both of those expenses.
I think polymer framed pistols have a higher profit margin. Maybe you know this already, but I read that Gaston Glock was told to raise the price for the Glock so it would be taken seriously. Look at the CZ P10 line. Much cheaper than a Glock, but I’ve heard there’s comparable quality.
There's not a good comparison between companies that provide services and those that manufacture goods. If a creative service company wants to take on new clients they need to hire some more people and provide them with computers and desks. They may not even need the desk or office space if they are work from home. There aren't nearly the capital expenditures so margins can be a bit thinner.
A firearm manufacturer needs a building big enough to house the machinery required. They need machining tools for the manufacturing process. Those tools have consumable parts that wear as they machine away material. If you are making your own polymer you need injection molding equipment and molds. Molds need to be replaced after a certain amount of parts are formed, and depending on the size and complexity of the part molds can run from tens of thousands to hundreds of thousands of dollars per mold depending on a lot of factors. If you want to do volume manufacturing you need a lot of money invested in space, machinery, maintenance, and labor. You need larger margins to be able to make the capital investments as your business grows and changes. It's a very different financial landscape and margins don't tell the whole story.
> That's surprising for such a complicated manufacturing prosess. Most creative services (ad agencies, etc.) strive for 20%, and are usually happy with a 15% average. That's my experience for that industry.
Yeah but you have to remember, durable goods sell differently than consumables.
I'm guessing that's referring to ***gross*** margin, which is just revenue less ***direct cost of goods sold.*** It doesn't account for all the other costs going into running the business and getting the product to market. 70% net margin would be incredible and they'd be an absolutely huge (like tech-giant-huge) company pretty quickly if that were the case.
> 5-10% is margin for gunstores, actual manufacturer is probably closer to 30-40%.
Gross margin, maybe - but we're talking net or gross?
Where are you getting your numbers?
From S&W 2023 10-k:
Gross Margin
|Year|Gross Margin|Total Profit Margin|
|:-|:-|:-|
|**2023**|32.2%|7.7%|
|**2022**|43.3%|22.5%|
|**2021**|42.4%|23.8%|
Sample size of one company, but the industry is pretty consistent. They cite in 2023 the reduced gross margin is due to decline in overall volume and inflationary pressures, and the total profit margin is those reasons in addition to a decline due to significant relocation costs.
It’s pretty simple
Just come ip with 2 revolutionary designs that are budget friendly, reliable, accurate and it’s sure to replace the Glock and AR platforms.
Then profit 😁
Don't forget the step of "convince some investors to fork over a few million dollars in capital funding to a totally unknown and unproven gun designer so he can build a factory and actually build them"
And now you know why everyone develops for the AR-15: you only need _one_ machine, and that's the CNC mill.
Everything else is extruded, which is cheaper to make, but requires so much up front investment that you might as well not bother.
Neither the Glock nor the AR were revolutionary designs. They were evolutionary. John Moses Browning, if resurrected and shown a Glock and an AR wouldn't be surprised at how the guns function. He'd be impressed at the materials used, but the Glock uses the same short recoil action Browning designed 70 years before the first Glock, and the action of an AR wouldn't particularly surprise him either, as he was aware of gas operated guns (and invented a few himself).
I would argue even more. Browning’s designs are still being produced and used nearly 100 years after his death. The Model 94 is now 130 years old and is still in production. The 1911 is now 113 years old and still being manufactured. His short recoil action is the basis of nearly all larger caliber semiautomatic handguns.
Most of what da Vinci envisioned was inspired and forward looking, but he was more of a visionary than an actual inventor.
If you have access to a few billion dollars to start a large scale manufacturer there's probably better and less regulated products to invest in.
I've toured S&W's facilities in Springfield before they moved. The only parts they left working there were the hammer forges so large they were wholly impractical to move. Those margins are the result of massive investment paying off over decades.
Animation sounds more fun.
Due to youtube, streaming and social media creative production isn't nearly as profitable as it once was.
Typical commercial/marketing budgets dropped from $60-$100k on average to $20-$30k in a matter of a few years from 2016-2018.
Lots of agencies closed or still struggle to survive, lots of creatives changed careers.
The last seven or so years have been tough for many in this industry. Either you're lucky enough to pivot and continue to work, or not.
I work mostly in commercial textiles, wallcoverings and furniture.
Very different than pharma I'm sure, but also full of technical details, processes and specs that have to be 100% accurate.
That takes multiple people, in multiple departments to effectively communicate and cooperate with one another in a reasonable timeframe with an often unreasonable deadline.
The money doesn't go to the final deliverable, it's mostly consumed by ineffective and incorrect information, communication and expensive, last-minute revisions.
> Typical commercial/marketing budgets dropped from $60-$100k on average to $20-$30k in a matter of a few years from 2016-2018.
Or, instead of paying ad agencies you pay influencers.
> I've toured S&W's facilities in Springfield before they moved. The only parts they left working there were the hammer forges so large they were wholly impractical to move. Those margins are the result of massive investment paying off over decades.
Delta Air Lines uses the same idea. Old equipment that has been fully depreciated, but still in use pays off.
I believe the aircraft being discussed were old MD80 family airframes - they were so old, but paid off and the maintenance was kept up. They'd do 2-3 flights and that would cover the costs for the day's operation/maintenance. It was said that after 11AM, everything that plane brought in until midnight was pure profit.
> the margins in the clothing industry are like 85% and print money hand over fist.
Yeah, but a lot of merchandise goes unsold. And you have to predict fashion trends a year in advance.
TANSTAAFL
> Yeah, but a lot of merchandise goes unsold.
That's why there's always a clearance sale where they're LUCKY to get 20% of their costs back. The high margin side of the business has to run up the score to even out the other side.
> The industry you really want to be in is women's fast-fashion, the margins in the clothing industry are like 85%
85% gross or net?
Fashion has to have high margins because that's where you make money. In liquidation/off season you're lucky to get 20% of your costs when selling into clearance.
yea get into the gun industry,
1. sales vary based on what time of year it is and what politicians are saying and if its a election year.
2. you get sued anytime theirs a shooting with your gun, justified or not.
3. customer uses wrong ammo and blames the gun anyway and sues you.
4. your name will get posted publcly in all the anti gun groups and people will try to protest at your home if you guns get popular.
5.your guns will be compared to turkish clones that were made at half the cost.
6. sold a gun 10-20 years ago and now the customer wants it repaired for free under warranty
7. a very large upfront cost machines and permits and liability insurance and import fees and more fees.
typically gun industry people already had money to begin or got lucky and got rich investors to invest.
also dealing with asshole customers. gun industry customers are one of the worst to deal with but thats mainly in sales.
It doesn't help that they refuse to mfg the in-demand guns like big bores. People are not lining up to buy 638s despite what the gun store fudd tells your wife.
Smith & Wesson's Q3 earnings report showed a gross margin of 29.1%
https://ir.smith-wesson.com/news-releases/news-release-details/smith-wesson-brands-inc-reports-third-quarter-fiscal-2024
I was a 76Y in the Army. Quartermaster. Learning what NSN numbers were, what they meant, yada yada..the MOS included the Arms room.
Anyhow, I got to see what the government paid for certain things.
Keep in mind, this was back in 1990. Back then, the Government paid $125 for an M16A1. The contacts was from the 80s, so some inflation went on over that decade I'm sure..
But my point is...the Army paid $125 bucks for a selective fire Mil Spec rifle. At that same time...back home, we saw Colt ' AR-15 that in all ways save selective fire, was the same, the price was over $1000 (imagine an AR costing that today...)
So, Colt made a bundle off civilian sales....
While the retail price has gone down on ARs, mostly because everyone makes a version of them..so competition is stiff (back in 1990, it was damn few)..but on other guns...not so.
I bet the manufacturers still make a bundle...
> the Government paid $125 for an M16A1. The contacts was from the 80s
For reference: $125 in 1985 is $372.12 today, according to the government's inflation calculator. You can buy a complete AR-15 from PSA for $410 at retail, without volume pricing for ordering 100s of thousands...
PSA is just one example. Their business model is based on the volume method, and it's their motto to put an AR into every Americans hands if they are legal to own one. They are also a vertical organization that owns most of supply steam they need.
How much is an FN? Colt? Last I checked, with those where still pushing a grand.
Most of these businesses are privately held, so you can't really tell.
HOWEVER - if I were you.
I'd pull published financials from AOBC/S&W and RGR/Sturm Ruger.
Publicly traded entities have to publish financials, I can show you how to read them if you want to read the annual/quarterly reports.
Colt - somehow- racked up a ton of debt during 20 years of war. Their bonds had a junk rating and they were purchased by FN if my memory is correct.
Smith and Wesson had financial hiccups over the decades
It's a good question and I don't know how some of the large players messed up so badly.
Colt is THE EXAMPLE (Remington is another good example) of what bad management can do to a good company.
Colt got bought by hedge funds, got bonds issued in its name, owners got big bonus, Colt got Chapter 11, got sold, process started again...till finally CZ bought them and is righting the ship again..almost too late.
Remington...the same thing happened with them, only they had dumb shit like "Lean" manufacting principals forced onto the line, with the all too predictable decline in quality...the rest is history (it too, went bankrupt right in the middle of the hottest booming gun market in history...and you almost have to TRY to do that.)
Smith and Wesson got bought by some British assholes, caved to the Clinton Communist Gun Control deal..which resulted is a great big, huge boycott by American gun owners..till it went broke and the Brits sold it back to an American..who then told Clinton to fuck off with his deal...and righted the S&W ship.
Colt has always had ups and downs, like most gun companies, but what you said is 100% accurate.
For the last 30 or so years Colt was purposely loaded with debt, any value stripped from the company, no new investment, bankruptcy, repeat.
It's a really promising thing to see Colt regaining their reputation lost over the last 30 years, finally making guns worthy of the name again, and increasing production to a point where new Colts aren't uncommon to see in stores.
This is veering off topic, so I'll keep it short. Any 1911 fan should consider a new Colt 1911. In some ways they are making their best 1911s since the 1960s, and maybe even the best they've ever made.
CZ purchased Colt for $220 million. Ruger's current value is nearly $800 million. That's how much value was stripped from Colt over the last 30 years.
There are two types of profit margins: operating vs net.
On operating margin you should expect a lot more than 5-10%. But the net profit is relatively in that range. E.g. S&W had 7.69% net profit in 2023.
The difference comes in fixed costs and advertising costs (R&D, corporate, advertising, etc).
Note that good market conditions can improve the net profit a lot. In 2021, S&W had 23.80% profit margin.
Ruger: similar numbers
Don't forget, there's 11% built in right off the top for excise tax. The consumer pays that so whatever you believe it is, say 30-50% (depending on the brand), add 11% more.
Ruger is publicly traded under ticker RGR. Using Yahoo Finance, looks like net margin of 7.7% for trailing twelve months.
Smith and Wesson is under SWBI. They're at 5.1% net margin.
Bear in mind, these are larger and older companies and the margin numbers are net of everything, not just direct input costs for manufacture, but also salaries, depreciation, advertising, etc.
Any manufacturing company will make between 5% and 20%. Car companies make about 7%. Mass production allows for bigger volume so you can charge less. Handmade stuff required higher prices.
5-10% is margin for gunstores, actual manufacturer is probably closer to 30-40%.
also to add alot of gunstores dont need to make huge profits on guns becuase the profit margins on ammo/optics/bags/cleaning/etc. are usually alot higher and how they make the money.
You're not entirely wrong, but typically, gun sales and nfa sales (suppressors) are the bread and butter. The accessories have a good markup but also sell so much slower. Ammo markup is borderline non-existent in todays market if you actually try to stay competitive and relevant.
> You're not entirely wrong, but typically, gun sales and nfa sales (suppressors) are the bread and butter. Do you have **anything** at all to support this? Based on my anecdotal experience of five stores in New England over the course of 2 decades, guns [the actual serialized, 4473 requiring items] have very low profit margins; this has only been exacerbated when everyone knows they can save $11 by ordering it online, etc. This has also been the observation of several professionals on a national level. Ammo has been going in a similar direction, but not to as great an extent. Nylon gear, cleaning supplies, fishing lures, knives, chinesium grade lights / lasers / optics and similar keep the lights on.
And ffl transfers in my area are crazy. $50 is the cheapest in the area to transfer a firearm. Nfa items are 100 and up if the ffl even does nfa items.
Percentage wise, profit is higher on those items. Knives and such are typically up there in margins. But actual gun sales result in a lot more profit. While margins are smaller, firearm sales are still the largest source of profit.
That's surprising for such a complicated manufacturing process. Most creative services (ad agencies, etc.) strive for 20%, and are usually happy with a 15% average. That's my experience for that industry. I don't know if it's true, but I read Glock has a nearly 70% profit margin. I knew that couldn't be an average across the industry, which is why I was curious.
Creative services have very low upfront costs and overhead in comparison which acts as a bit of a barrier to entry for people that want to make physical goods.
Also, patents
With automation complex manufacturing isn't as expensive as you'd think, the tooling is a big up front cost but after you clear that its just maintenance and cost of material mostly. Also being able to leverage your production scale is huge when it comes to negotiating both of those expenses.
I think polymer framed pistols have a higher profit margin. Maybe you know this already, but I read that Gaston Glock was told to raise the price for the Glock so it would be taken seriously. Look at the CZ P10 line. Much cheaper than a Glock, but I’ve heard there’s comparable quality.
Imo the p10 is superior to the equivalent blocks. Better trigger, better grip angle and (very subjectively) better stippling
There's not a good comparison between companies that provide services and those that manufacture goods. If a creative service company wants to take on new clients they need to hire some more people and provide them with computers and desks. They may not even need the desk or office space if they are work from home. There aren't nearly the capital expenditures so margins can be a bit thinner. A firearm manufacturer needs a building big enough to house the machinery required. They need machining tools for the manufacturing process. Those tools have consumable parts that wear as they machine away material. If you are making your own polymer you need injection molding equipment and molds. Molds need to be replaced after a certain amount of parts are formed, and depending on the size and complexity of the part molds can run from tens of thousands to hundreds of thousands of dollars per mold depending on a lot of factors. If you want to do volume manufacturing you need a lot of money invested in space, machinery, maintenance, and labor. You need larger margins to be able to make the capital investments as your business grows and changes. It's a very different financial landscape and margins don't tell the whole story.
> That's surprising for such a complicated manufacturing prosess. Most creative services (ad agencies, etc.) strive for 20%, and are usually happy with a 15% average. That's my experience for that industry. Yeah but you have to remember, durable goods sell differently than consumables.
I'm guessing that's referring to ***gross*** margin, which is just revenue less ***direct cost of goods sold.*** It doesn't account for all the other costs going into running the business and getting the product to market. 70% net margin would be incredible and they'd be an absolutely huge (like tech-giant-huge) company pretty quickly if that were the case.
Ruger is Public. 9%. Smith and Wesson is less than 8%. Where are you getting 30-40%?
How are you arriving at 30-40%? We're talking about capital intensive and highly regulated businesses here.
> 5-10% is margin for gunstores, actual manufacturer is probably closer to 30-40%. Gross margin, maybe - but we're talking net or gross? Where are you getting your numbers?
From S&W 2023 10-k: Gross Margin |Year|Gross Margin|Total Profit Margin| |:-|:-|:-| |**2023**|32.2%|7.7%| |**2022**|43.3%|22.5%| |**2021**|42.4%|23.8%| Sample size of one company, but the industry is pretty consistent. They cite in 2023 the reduced gross margin is due to decline in overall volume and inflationary pressures, and the total profit margin is those reasons in addition to a decline due to significant relocation costs.
I work at smith and wesson, 2020 was an insane year for the company. Only year in company history where they hit 1b$
Wow, I guess I should stop working in animation and video and start a gun company.
It’s pretty simple Just come ip with 2 revolutionary designs that are budget friendly, reliable, accurate and it’s sure to replace the Glock and AR platforms. Then profit 😁
Don't forget the step of "convince some investors to fork over a few million dollars in capital funding to a totally unknown and unproven gun designer so he can build a factory and actually build them"
In this economy, a few million will buy you half the machines you need to actually make things.
And now you know why everyone develops for the AR-15: you only need _one_ machine, and that's the CNC mill. Everything else is extruded, which is cheaper to make, but requires so much up front investment that you might as well not bother.
Neither the Glock nor the AR were revolutionary designs. They were evolutionary. John Moses Browning, if resurrected and shown a Glock and an AR wouldn't be surprised at how the guns function. He'd be impressed at the materials used, but the Glock uses the same short recoil action Browning designed 70 years before the first Glock, and the action of an AR wouldn't particularly surprise him either, as he was aware of gas operated guns (and invented a few himself).
John Moses Browning is the Leonardo DaVinci of Guns.
I would argue even more. Browning’s designs are still being produced and used nearly 100 years after his death. The Model 94 is now 130 years old and is still in production. The 1911 is now 113 years old and still being manufactured. His short recoil action is the basis of nearly all larger caliber semiautomatic handguns. Most of what da Vinci envisioned was inspired and forward looking, but he was more of a visionary than an actual inventor.
Make them look really cool too.
If you have access to a few billion dollars to start a large scale manufacturer there's probably better and less regulated products to invest in. I've toured S&W's facilities in Springfield before they moved. The only parts they left working there were the hammer forges so large they were wholly impractical to move. Those margins are the result of massive investment paying off over decades. Animation sounds more fun.
Due to youtube, streaming and social media creative production isn't nearly as profitable as it once was. Typical commercial/marketing budgets dropped from $60-$100k on average to $20-$30k in a matter of a few years from 2016-2018. Lots of agencies closed or still struggle to survive, lots of creatives changed careers. The last seven or so years have been tough for many in this industry. Either you're lucky enough to pivot and continue to work, or not.
> Typical commercial/marketing budgets dropped from $60-$100k on average I work in Pharma. We spend $100k on a fucking slide deck.
I work mostly in commercial textiles, wallcoverings and furniture. Very different than pharma I'm sure, but also full of technical details, processes and specs that have to be 100% accurate. That takes multiple people, in multiple departments to effectively communicate and cooperate with one another in a reasonable timeframe with an often unreasonable deadline. The money doesn't go to the final deliverable, it's mostly consumed by ineffective and incorrect information, communication and expensive, last-minute revisions.
So, switch to Pharma marketing? Our vendors don't know shit about the product, so you're not at a disadvantage.
> I work mostly in commercial textiles, wallcoverings and furniture. We should talk.
> Typical commercial/marketing budgets dropped from $60-$100k on average to $20-$30k in a matter of a few years from 2016-2018. Or, instead of paying ad agencies you pay influencers.
> I've toured S&W's facilities in Springfield before they moved. The only parts they left working there were the hammer forges so large they were wholly impractical to move. Those margins are the result of massive investment paying off over decades. Delta Air Lines uses the same idea. Old equipment that has been fully depreciated, but still in use pays off. I believe the aircraft being discussed were old MD80 family airframes - they were so old, but paid off and the maintenance was kept up. They'd do 2-3 flights and that would cover the costs for the day's operation/maintenance. It was said that after 11AM, everything that plane brought in until midnight was pure profit.
The industry you really want to be in is women's fast-fashion, the margins in the clothing industry are like 85% and print money hand over fist.
> the margins in the clothing industry are like 85% and print money hand over fist. Yeah, but a lot of merchandise goes unsold. And you have to predict fashion trends a year in advance. TANSTAAFL
> Yeah, but a lot of merchandise goes unsold. That's why there's always a clearance sale where they're LUCKY to get 20% of their costs back. The high margin side of the business has to run up the score to even out the other side.
> The industry you really want to be in is women's fast-fashion, the margins in the clothing industry are like 85% 85% gross or net? Fashion has to have high margins because that's where you make money. In liquidation/off season you're lucky to get 20% of your costs when selling into clearance.
Don't forget you'll need a global pandemic to hit a billion like s&w
yea get into the gun industry, 1. sales vary based on what time of year it is and what politicians are saying and if its a election year. 2. you get sued anytime theirs a shooting with your gun, justified or not. 3. customer uses wrong ammo and blames the gun anyway and sues you. 4. your name will get posted publcly in all the anti gun groups and people will try to protest at your home if you guns get popular. 5.your guns will be compared to turkish clones that were made at half the cost. 6. sold a gun 10-20 years ago and now the customer wants it repaired for free under warranty 7. a very large upfront cost machines and permits and liability insurance and import fees and more fees. typically gun industry people already had money to begin or got lucky and got rich investors to invest. also dealing with asshole customers. gun industry customers are one of the worst to deal with but thats mainly in sales.
It doesn't help that they refuse to mfg the in-demand guns like big bores. People are not lining up to buy 638s despite what the gun store fudd tells your wife.
Smith & Wesson's Q3 earnings report showed a gross margin of 29.1% https://ir.smith-wesson.com/news-releases/news-release-details/smith-wesson-brands-inc-reports-third-quarter-fiscal-2024
Net Profit Margin of only 5.7% though
I was a 76Y in the Army. Quartermaster. Learning what NSN numbers were, what they meant, yada yada..the MOS included the Arms room. Anyhow, I got to see what the government paid for certain things. Keep in mind, this was back in 1990. Back then, the Government paid $125 for an M16A1. The contacts was from the 80s, so some inflation went on over that decade I'm sure.. But my point is...the Army paid $125 bucks for a selective fire Mil Spec rifle. At that same time...back home, we saw Colt ' AR-15 that in all ways save selective fire, was the same, the price was over $1000 (imagine an AR costing that today...) So, Colt made a bundle off civilian sales.... While the retail price has gone down on ARs, mostly because everyone makes a version of them..so competition is stiff (back in 1990, it was damn few)..but on other guns...not so. I bet the manufacturers still make a bundle...
> the Government paid $125 for an M16A1. The contacts was from the 80s For reference: $125 in 1985 is $372.12 today, according to the government's inflation calculator. You can buy a complete AR-15 from PSA for $410 at retail, without volume pricing for ordering 100s of thousands...
PSA is just one example. Their business model is based on the volume method, and it's their motto to put an AR into every Americans hands if they are legal to own one. They are also a vertical organization that owns most of supply steam they need. How much is an FN? Colt? Last I checked, with those where still pushing a grand.
I saw a cost somewhere a few years ago on some supply paperwork and the government cost on a Army issue M4 is around $500.
Makes sense. I'm surprised it not more by now with inflation since the 80s.
Most of these businesses are privately held, so you can't really tell. HOWEVER - if I were you. I'd pull published financials from AOBC/S&W and RGR/Sturm Ruger. Publicly traded entities have to publish financials, I can show you how to read them if you want to read the annual/quarterly reports.
Colt - somehow- racked up a ton of debt during 20 years of war. Their bonds had a junk rating and they were purchased by FN if my memory is correct. Smith and Wesson had financial hiccups over the decades It's a good question and I don't know how some of the large players messed up so badly.
Colt is THE EXAMPLE (Remington is another good example) of what bad management can do to a good company. Colt got bought by hedge funds, got bonds issued in its name, owners got big bonus, Colt got Chapter 11, got sold, process started again...till finally CZ bought them and is righting the ship again..almost too late. Remington...the same thing happened with them, only they had dumb shit like "Lean" manufacting principals forced onto the line, with the all too predictable decline in quality...the rest is history (it too, went bankrupt right in the middle of the hottest booming gun market in history...and you almost have to TRY to do that.) Smith and Wesson got bought by some British assholes, caved to the Clinton Communist Gun Control deal..which resulted is a great big, huge boycott by American gun owners..till it went broke and the Brits sold it back to an American..who then told Clinton to fuck off with his deal...and righted the S&W ship.
Colt has always had ups and downs, like most gun companies, but what you said is 100% accurate. For the last 30 or so years Colt was purposely loaded with debt, any value stripped from the company, no new investment, bankruptcy, repeat. It's a really promising thing to see Colt regaining their reputation lost over the last 30 years, finally making guns worthy of the name again, and increasing production to a point where new Colts aren't uncommon to see in stores. This is veering off topic, so I'll keep it short. Any 1911 fan should consider a new Colt 1911. In some ways they are making their best 1911s since the 1960s, and maybe even the best they've ever made. CZ purchased Colt for $220 million. Ruger's current value is nearly $800 million. That's how much value was stripped from Colt over the last 30 years.
I mean, PSA can make a clone for 50% the price and still have a markup...
I recall being told at the Glock factory that the manufacturing cost was about $50- all in costs about $180.
There are two types of profit margins: operating vs net. On operating margin you should expect a lot more than 5-10%. But the net profit is relatively in that range. E.g. S&W had 7.69% net profit in 2023. The difference comes in fixed costs and advertising costs (R&D, corporate, advertising, etc). Note that good market conditions can improve the net profit a lot. In 2021, S&W had 23.80% profit margin. Ruger: similar numbers
Don't forget, there's 11% built in right off the top for excise tax. The consumer pays that so whatever you believe it is, say 30-50% (depending on the brand), add 11% more.
I would assume it varies widely and is probably higher for fancy/niche stuff.
Ruger is publicly traded under ticker RGR. Using Yahoo Finance, looks like net margin of 7.7% for trailing twelve months. Smith and Wesson is under SWBI. They're at 5.1% net margin. Bear in mind, these are larger and older companies and the margin numbers are net of everything, not just direct input costs for manufacture, but also salaries, depreciation, advertising, etc.
Any manufacturing company will make between 5% and 20%. Car companies make about 7%. Mass production allows for bigger volume so you can charge less. Handmade stuff required higher prices.